Ladbroke v Lee
| Jurisdiction | England & Wales |
| Judgment Date | 24 March 1850 |
| Date | 24 March 1850 |
| Court | High Court of Chancery |
English Reports Citation: 64 E.R. 755
HIGH COURT OF CHANCERY
[106] ladbroke v. lee. Feb. 26, 27, March 24, 1850. The owner of six ships, by a deed to which he and two trustees alone were parties, and which was duly registered, assigned them to two trustees for securing sums of money expressed to be lent to him by them (but which had been in fact lent by the Plaintiffs), and covenanted to insure each vessel in the sum of £1500 at the least, and, on request, to assign the policies to the trustees. He did insure the ships in his own name, through the agency and in the name of a broker who had notice of the mortgage, but who had been informed by the owner that insurances had been effected by the trustees in respect of their interest, and who trusted him, in the belief that the insurances were on the owner's own account, in respect of his interest as mortgagor. One of the ships insured in £1000 was lost. The owner subsequently became bankrupt. The broker was a creditor of the owner for premiums on the insurance policies, and for £100 cash advanced after the policies had been effected; and he brought an action against the underwriters for the monies secured by the policies. In a suit by the Plaintiffs, who had really lent the money on the mortgage security against the broker, the underwriters and the trustees for the Plaintiffs, asking a declaration that the proceeds of the policies belonged to the Plaintiffs, and for an account and injunction : Held, first, that the provisions of the Ship Registry Acts afforded no defence to the suit; second, that the broker was not entitled to a general lien for the whole balance due to him from the bankrupt, but only on each policy for the sums paid in respect of that policy; third, that the assignees had no title under the order and disposition clause in the Bankruptcy Act. 756 LADBBOKE V. LEE 4DE G. & SM. 107. Mr. Eobert Ladbroke, since deceased, and other persons, were, in October 1844, engaged as partners. Thomas Browne was one of the partners; he afterwards became bankrupt. The business of the partnership was to work a colliery, called the Badcliffe Colliery, situated on the river Tyne. At a meeting of the partners in the colliery, held on the 31st of October 1844, it was considered desirable that ships should be procured, to be freighted with coals from the colliery; and it was resolved that £6000 should be borrowed, to be expended in the purchase or building of ships, in the name of Mr. Thomas Browne, as the owner, he mortgaging the ships to the owners of the colliery, and undertaking to pay the whole advance by instalments of .£1000 per annum, the owners of the colliery guaranteeing the £6000 to the lender, in certain proportions. It was also agreed that the ships to be built with the money to be so raised should be at the orders and disposal of the colliery partnership, at the same freights as were given on the Tyne, with the addition of the harbour dues; and that the captain of each ship should hold one-fourth share of his ship. In pursuance of this agreement, Mr. Thomas Browne caused five ships to be built, respectively called the "Francis Western," the "Christina Murray," the "Sir John Eennie," the " Felix Ladbroke" and the "Earl of Newburgh." [107] Mr. Eobert Ladbroke and the other owners of the colliery procured the required sum of £6000 to be lent by Messrs. Glyn & Co., upon the joint and several promissory notes of the said joint owners of the colliery; and that sum of £6000 was applied, as far as it would extend, in the purchase by Mr. Browne of 48/64th parts or shares of the above-named five ships. The residue of the purchase-monies of the 48/64th shares of these ships beyond the £6000 was provided out of the colliery partnership monies. By an indenture, dated the 25th of April 1845, and made between Mr. Thomas Browne of the one part, and Messrs. Charles Molloy and Edward Western of the other part, Mr. Browne assigned the several 48/64th shares of and in the above-named five ships unto Messrs. Charles Molloy and Edward Western, subject to a proviso for their redemption, on payment by Mr. Thomas Browne, upon the 25th of April then next, to Messrs. Charles Molloy and Edward Western, of the sum of £6000 and interest; and in the said indenture was contained a covenant on the part of Mr. Browne for payment by him to Messrs. Molloy and Western of the sum of £6000 and interest, according to the stipulation of the proviso; and also the following covenants that he, Mr. Browne, would at all times, during the continuance of the security thereby intended to be made, insure or cause to be insured from loss or damage by the perils of the seas, war, fire or otherwise, according to the usages and practice of owners of ships in that behalf, each of the five ships or vessels to the amount of £1500 at the least; and that he would pay all such premiums and duty and other sums of money as should become payable in order to keep the same insured, and from time to time, upon request of Messrs. Molloy and Western, to produce and deposit with and assign to them the policies of such insurance; and also that, in case Mr. Thomas Browne should neglect or refuse to make such insurances, or should neglect to make such payments or any of them, or to produce, deposit or assign the policies of insurance or any of [108] them, when thereunto required, it should be lawful for the Defendants, Charles Molloy and Henry Western, or the survivor of them, to insure and keep the ships or vessels insured, and to pay any premiums and duty or other sums of money necessary for that purpose; and that Mr. Browne would, on demand, pay to Messrs. Molloy and Western such sums of. money as they should pay or advance for any of those purposes, with interest; and that, in the meantime, and until the same should be so repaid, the several shares of ships thereby assigned should be charged with payment of these sums, as well as of the sum of £6000 and interest. The indenture also contained a proviso that, in case Mr. Browne should pay the £6000 and interest by yearly instalments of £1000 and the interest to accrue due, and should also observe the covenants in the indenture contained, Messrs. Molloy and Western would not commence any proceeding upon the above contracts, nor exercise the powers of sale thereinafter contained, or file any bill of foreclosure of the shares of the ships thereby assigned. In the same indenture was contained a power of sale in case of default in payment of the instalments, or in keeping the shares of the ships insured. The 4DEG;&SM.109. EADBKOKE -V. LEE 757 indenture also contained a declaration that...
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