Buttery & Company v Inglis
| Jurisdiction | Scotland |
| Judgment Date | 03 November 1877 |
| Date | 03 November 1877 |
| Docket Number | No. 19. |
| Court | Court of Session |
Lord Adam. R., Lord Justice-Clerk, Lord Ormidale, Lord Gifford.
Proof, competency of, to control Written ContractEffect of Deletion in Written ContractContract to Overhaul and Repair Ship.
A tender was given by a shipbuilder, and accepted by the owner of a steam-vessel, for lengthening the vessel, and fitting her with new engines and machinery. The owners stated that they proposed to class the vessel A1 100 at Lloyds. A minute of agreement and relative specification were afterwards adjusted between the owner's inspector and the shipbuilders. In the specification there was the following clause (the fourteen words in italics having been deleted before signing, but remaining legible):Iron work.The plating of the hull to be carefully overhauled and repaired [but if any new plating is required the same to be paid for extra.] Deck beams, ties, diagonal ties, main and spar deck stringers, and all iron work, to be in accordance with Lloyds rules for classification. Neither party was in a position to inspect the hull of the vessel when the contract was signed, as she was then afloat. When she was laid up in dock and the ceiling, &c., stripped, the plating of the hull was found to be very defective, and Lloyds surveyor required a large amount of the plating to be renewed if the vessel was to be classed. The parties differed on the question whether substantial renewal of the plating of the hull was included within the contract.
After a proof, before answer, held (diss. Lord Gifford, rev. judgment of Lord Adam)(1) that in the true construction of the contract the shipbuilders were bound to renew the plating so far as necessary to class the vessel at Lloyds; (2) that if there was any ambiguity in the written contract it was competent for the Court to look at the surrounding facts and circumstances so as to place themselves as far as possible in the position of the parties when they signed it, and that the correspondence and parole proof led established the same conclusion.
Opinion (per Lord Justice-Clerk)(1) That the Court were entitled to look at the deleted words occurring in the specification and to consider the circumstances under which the deletion was made; and (2) that the facts proved established that a collateral contract had been entered into between the parties, and given effect to by the deletion, whereby if any new plating was required, there was to be no extra charge made for it.
Opinion contra (per Lord Gifford).
The question in this action of multiplepoinding arose on the construction of a contract, whereby Messrs A. & J. Inglis, engineers and shipbuilders, Glasgow, agreed to supply with new machinery, lengthen, and repair the screw steamer United Service, belonging to foreign owners, for whom Messrs J. Buttery & Company, London, were agents.
The contract was embodied in a memorandum of agreement, dated 24th and 27th March 1875, and relative specification, which, so far as material to the case, were as follows;.. 2. The said A. & J. Inglis agree to take out the present engines and boilers, cut and lengthen the vessel 40 feet amidships, of the same scantling of materials as at present, with the additional strengthening required by Lloyds, to enable the vessel to be classed A1 100; also to fit new spar deck of teak between poop and forecastle, with iron sides, beams, &c.;. to supply and fit on board a new pair of direct-acting compound engines of v. 140 h.-p. nominal. all to Board of Trade requirements, including new engine and boiler seats, coal bunkers, beams, &c., all complete, and as more fully detailed in the annexed specifications, for the sum of seventeen thousand two hundred and fifty pounds (17,250 sterling), besides the old materials.
Specification referred to,
Iron workThe plating of the hull to be carefully overhauled and repaired [but if any new plating is required the same to be paid for extra.*] Deck beams, ties, diagonal ties, main and spar deck stringers, and all iron work, to be in accordance with Lloyds rules for classification.
Ceiling.As much ceiling in holds to be lifted as required by Lloyds, and ship's limbers thoroughly cleaned, examined, and overhauled, cemented and painted. Any ceiling renewed to be paid for extra.
When the hull of the ship came to be inspected by Lloyds surveyor in the course of the execution of the work contracted for it was ascertained that the shell plating of the hull was greatly wasted, and that a large amount of new plating would be required if the vessel was to be classed. A. & J. Inglis accordingly wrote to Buttery & Company on 29th June 1875 stating that Lloyds surveyor recommended that the new plating should be done, and that his recommendations would have to be carried out, if it was still desired to class the vessel, but intimating that, as it did not fall within the contract, they would wait further instructions before proceeding with it. Buttery & Company replied on 30th June that classification was a necessity, but that in their view the work necessary fell within the contract, and requiring A. & J. Inglis to proceed with it at once.
After certain correspondence and meetings between the parties it was agreed that A. & J. Inglis should complete the necessary work in terms of the following minute, dated 30th July 1875:The parties being at variance regarding the meaning of the third clause of the annexed specification, headed iron work, it is agreed that Messrs Inglis shall proceed with the work according to the view contended for by Messrs Buttery, under reservation, however (first), of Messrs Inglis plea that the work contended for by Messrs Buttery is not within the contract, and (secondly), of Messrs Buttery's answer to that plea.
The cost of the extra work when completed was 1260, 0s. 10d. In order to allow the ship to proceed to sea Buttery & Company lodged this sum with the Union Bank, and raised a multiplepoinding in their hands. Both Buttery & Company and A, & J. Inglis claimed the whole fund in media.
The Lord Ordinary, on 21st December 1876, ranked and preferred A. & J. Inglis to the whole fund in medio in terms of their claim, with expenses.
Buttery and Co. reclaimed.
The Court, after hearing argument, allowed both parties a proof before answer.*
Argued for Messrs Buttery & Co.;(1) On the terms of the written contract itself the work in dispute clearly came within overhaul and re-
pair. Repair could not be complete if defective plates were left in the hull. Moreover (2), it was part of the contract from the very beginning
that the vessel should be classed A1 100 at Lloyds. But (3) in the case of an informal mercantile contract, such as this, the Court were entitled to look outwith the contract at the surrounding facts and circumstances. They were entitled to look at the deleted words, but if any new plating is required the same to be paid for extra. They were entitled to consider that these words were deleted, and to know the circumstances under which they were deleted. Now, the letter of 25th March, and the evidence of what followed thereon, terminating in the deletion of the words objected to before the signing of the contract, proved conclusively that whatever may have been the original contract, completed by the tender and acceptance, a new and collateral contract was superinduced upon it, whereby A. & J. Inglis became bound to execute what additional plating might be required without any additional charge.1 (4) A. & J. Inglis might have acted under a misapprehension, but there was no case of misrepresentation or concealment such as would entitle them to rescind the contract.2
Argued for A. & J. Inglis;(1) Under a contract to repair, substantial reconstruction never could reasonably be included. (2) There was no contract on their part to do all that was necessary to class the vessel. Certain specific work was required, and they undertook to do that work in accordance with Lloyds' rules. (3) It was incompetent to look at the deleted words or to inquire into the cause of the deletion, or to seek to establish a collateral and independent contract, founded not on writing but on the deletion of writing. The deleted words must be taken pro non scripto, and so taking the contract it was clear from the context that the renewal of the hull plating was not in the contemplation of parties. But (4) even if the deleted words were to be looked at and the deletion explained, the evidence shewed that the agreement to delete was brought about by misrepresentation on the part of the master of the vessel, for whom the owners were responsible.3 (5) That in the circumstances they had a good equitable defence against the demand of Messrs Buttery & Co.4
Lord Justice-Clerk.In this case, which has raised some important questions and has given rise to a great deal of consideration on our part as well as discussion at the bar we are now to give judgment.
We have the facts clearly ascertained, and these are substantially as follows:(His Lordship narrated the facts as given in note, supra, p. 60, et seq.)
On that statement of the facts it does not seem to me that there is much room for reasonable doubt. It is perfectly true that the Messrs Inglis could not tell, when they agreed to strike out that clause, what amount of new plating would be required, because the machinery was still in the vessel. They had thought it necessary to insert, as they did insert in the specification, a clause protecting them in that matter, but Messrs Buttery refused to agree to the clause, and Messrs Inglis acquiesced in adopting and giving effect to that repudiation. And therefore, upon the good faith of the contract and the substance of the agreement, it does not appear to me that there remains the slightest doubt.
The only doubt which has been suggested depends upon some propositions in point of law. The first, I understand, to be that the Court are not entitled to look into the transaction out of which this...
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