19. Lien for Freight and Charter Hire.—
It is fundamental that the goods carried are liable for the carrying charges, but the questions arise: In whose favor does the liability exist, and during what period does it exist? The lien for freight exists in favor of the person with whom the shipper contracts to carry the goods. Where the shipowner is operating the vessel on his own account as a carrier, the lien for freight exists in his favor. Where the vessel is chartered the contract of carriage is between the shipper and the charterer, and the lien for freight exists in favor of the charterer. The owner of a chartered ship has no lien for freight (unless conferred by the cesser clause, mentioned below), but he may have a lien on the goods to the extent of the unpaid freight for the purpose of securing his charter hire. This lien does not exist in favor of an owner who has demised or let the ship to the charterer, unless there is an express stipulation to that effect.
The so-called "cesser clause" is to the effect that "owner to have lien on cargo for freight, dead-freight, and demurrage, charterer's liability to cease when cargo shipped." The purpose of this clause is to bring the charterer's liability to an end at the loading port. In return for his exemption from liability to suit at the port of destination, he turns over to the shipowner his lien on the cargo for freight, dead-freight and demurrage.
Possession of the goods is, generally speaking, essential to the lien for freight or charter hire. It does not attach until the goods have been delivered for transportation. If, by contract, expressed in the bill of lading or otherwise, the freight is not payable until after the goods have been delivered, there is no lien, and the same is true if the freight is payable at a time and place other than those specified for the delivery of cargo. Ordinarily the lien is discharged when possession of the goods is parted with; or by express waiver; or by implied waiver, such as a direction to pay the freight to another person.
It is usual to insert in time charters a clause providing for a lien for charter hire. Such provisions are valid, but they are not effective against the cargo unless the terms of the charter have been brought home to the shipper by a reference to the charter in the bill of lading, which is commonly done. To incorporate the charter in the bill of lading the reference to the charter in the bill must be explicit.