Abram Steamship Company v Westville Shipping Company

JurisdictionEngland & Wales
JudgeEarl of Birkenhead,Viscount Finlay,Lord Dunedin,Lord Atkinson,Lord Shaw of Dunfermline,.
Judgment Date06 July 1923
Judgment citation (vLex)[1923] UKHL J0706-1
CourtHouse of Lords
Docket NumberNo. 9.
Date06 July 1923
Abram Steamship Company, Limited (in Liquidation) and Another
Westville Shipping Company, Limited (in Liquidation) and Another

[1923] UKHL J0706-1

Earl of Birkenhead.

Viscount Finlay.

Lord Dunedin.

Lord Atkinson.

Lord Shaw.

House of Lords

After hearing Counsel, as well on Monday the 30th day of April last, as on Tuesday the 1st day of May last, upon the Petition and Appeal of the Abram Steamship Company, Limited, whose Registered Office is at 93, Hope Street, Glasgow, now in Liquidation, and A. Murray Gourlay, Chartered Accountant, 24, George Square, Glasgow, as Liquidator of the and said Company, praying, That the matter of the Interlocutors set forth in the Schedule thereto, namely, an Interlocutor of the Lord Ordinary in Scotland (Lord Hunter), of the 15th of June 1921, and also an Interlocutor of the Lords of Session there, of the First Division, of the 17th of June 1922, so far as therein stated to be appealed against, might be reviewed before His Majesty the King in His Court of Parliament, and that the said Interlocutors, so far as aforesaid, might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King in His Court of Parliament might seem meet; as also upon the printed Case of the Westville Shipping Company, Limited, now in Liquidation, and Clifford Henry Longdon-Griffiths, Chartered Accountant, as Liquidator of the said Company, (who was, in pursuance of an Order of this House, of the 11th day of December last, added as a Respondent in the Appeal), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal, in the Court of Parliament of His Majesty the King assembled, That the said Interlocutors, in part complained of in the said Appeal, be, and the same are hereby, Affirmed, and that the said Petition and Appeal be, and the same are hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the parties entitled to the same within One Calendar Month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Lord Ordinary officiating on the Bills during the Vacation, to issue such summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.

Earl of Birkenhead .

My Lords,


I have had the advantage of reading the judgments herein of my noble and learned friends Lord Dunedin and Lord Atkinson I agree with them; have nothing to add; and move that the Appeal be dismissed with costs.

Viscount Finlay .

My Lords,


I have had the advantage of reading the judgment prepared by Lord Dunedin and find that it exactly expresses my views on this case. I concur with it and have nothing to add.

Lord Dunedin .

My Lords,


The facts on which the question is raised in this case are as follows. The Appellants by a contract of date 24th September 1919, contracted with a firm of shipbuilders for the building and finishing of a steel screw steamer of certain dimensions. The Appellants in February 1920 assigned that contract to the Respondents. In the negotiations for assignment there were representations as to the stage of construction which the steamer had by that time reached, which representations were admittedly untrue. By the time of the agreement of assignation the sum of 26,000 l. was payable within 20 days of the execution of the agreement and that sum was duly paid. On 13th March 1920, the Respondents assigned to the British Hispano Company for a certain consideration all the rights under the agreement. In doing so they passed on the information which they had received from the Appellants as to the state of progress of the vessel.


In June 1920, the British Hispano Company discovered that the representations made as to the state of progress were untrue. They at once repudiated the contract. The Respondents gave intimation of this to the Appellants and in turn repudiated their contract. The British Hispano Company raised action in the English Courts to set aside this contract and recover the money paid under it. While that action was in dependence the Respondents raised the present action against the Appellants to set aside the contract and recover the money paid under it. The summons was signeted on 5th November 1920. On 11th December judgment was given in favour of the Plaintiffs in the English action, the Respondents in this case Defendants in that being advised that they had no defence.


The only other matter that need be mentioned is that before action raised a suggestion was made by the builders for a small alteration in the deckhouse. This was passed on to the Respondents to the sub-purchasers and approved of by them.


On these facts it is admitted that there was misrepresentation for which the Appellants are responsible which induced the Respondents to enter into the contract for the purchase of the ship with them. The materiality of such misrepresentation was not actually admitted, but it was found by both Courts below on what I consider very clear grounds. There is, therefore, so far good ground for setting aside the contract.


The defence depends on two points: first, it is said that the Respondents elected to affirm the contract after they were aware of the grounds for rescission by consenting to certain alterations as shown by certain letters. My Lords, election to affirm must, if to be gathered from action, be gathered from unequivocal acts. It would not matter that the act in itself was trivial, but the triviality of the act may easily affect the inferences to be drawn from it. Now, here the alteration of a certain part of the deckhouse was an alteration suggested by the builders and passed on by the respondents to the sub-purchaser. It was assented to, but I cannot for myself think that the assent to such an alteration in the circumstances can possibly be taken as a considered affirmation of the contract. The plea thus becomes equally useless to the Appellants in the present action, as it would have been if it had been taken in the action brought by the sub-purchaser against the Respondents. This takes away the whole sting of pointing out that the decree in that action was a consent decree. Persons cannot be held liable for not having put forward pleas which are unsound in themselves.


The second point is that the action is barred by the fact of the sub-sale. So long as the sub-sale stood, this would of course be so. As has well been pointed out by the Lord President, no one can be allowed to maintain a contract between him and another and at the same time to reduce another contract on which alone his title to make that contract depended. That was the position of Dunn in Molleson's case, 21 R., H.L. 10. Dunn proposed to stick to his contract with the United Breweries Company and at the same time to reduce the original contract. But here the sub-contract no longer exists. It has been put out of the way by the decision in the English Courts. I am of opinion that the dicta in Molleson's case provide the answer to the contention. It is true that Lord Watson puts the matter hypothetically, but Lord Herschell was more explicit. He says:

"No doubt if there had been any fraud, if there had been misrepresentation, it would have been open to Dunn notwithstanding the execution of the conveyance to set aside the conveyance and put an end to the transaction altogether."


On principle I can see no answer to this point. The sub-contract, which was ex hypothesi the only obstacle, has been completely swept away. The Respondents have been put back into their original position, i.e., as purchasers under the contract with the Appellants. Why then should they not reduce that contract if they have relevant grounds to do so?


The only point remaining is founded on date. It is said on the authority of Symington v. Campbell, 21 R., 434, that at the date of the raising of the present action the pursuers had no title to sue and that the action is not saved by a title subsequently emerging. It is as well to set out what Campbell's case actually decided.


A. purchased a vessel from B. Prior to his purchase injury had been done to the ship by the alleged fault of C.; A. raised an action against C. for damages for such injuries. Subsequently to the service of the summons A. obtained from B. an assignation of all claims competent to him against C. It was held that at the date of the summons A. had no title to sue and that a subsequent assignation did not cure that defect. But it is to be observed that there the title conferred by the assignation was a perfectly independent title. The sale of the ship by B. to A. did not convey any right to damages which were a personal right in B.; consequently the subsequent assignation could never cure the original defect in title. Here the matter is quite different: the original title to set aside a contract induced by misrepresentation was quite good. It is true that for the moment there seemed a good answer, namely:

"You have parted with the subject of the contract and therefore you have lost your interest,"


but the moment that the instrument by which they had so parted was swept away the original title was then in all its force.


I therefore concur in the judgment proposed.

Lord Atkinson .

My Lords,


Beyond concurring with the judgments which have been delivered by my two noble friends who have preceded me, and expressing my high appreciation and approval of the...

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