Lindsay v Gibbs
| Jurisdiction | England & Wales |
| Judgment Date | 01 March 1859 |
| Date | 01 March 1859 |
| Court | High Court of Chancery |
English Reports Citation: 44 E.R. 1435
BEFORE THE LORDS JUSTICES.
S. C. 22 Beav. 522; 26 Beav. 61; 28 L. J. Ch. 692; see Brown v. Tanner, 1866, L. R. 2 Eq. 809; Wilson v. Wilson, 1872, L. R. 14 Eq. 32; Keith v. Burrows, 1876, 1 C. P. D. 734.
[690] lindsay v. gibbs. Before the Lords Justices. Feb. 16, 17, March I, 1859. [S. C. 22 Beav. 522; 26 Beav. 61; 28 L. J. Ch. 692; see Brown v. Tanner, 1866, L. R. 2 Eq. 809 ; Wilson v. Wilson, 1872, L. R. 14 Eq. 32; Keith v. Burrows, 1876, 1 C. P. D. 734.] H., the owner of a ship which was on a voyage under a charter-party, transferred to B., in November 1854, three-eighths of the ship, and the transfer was registered in the same month. In December, he gave a charge to L. on the freight. Before this he had transferred his other shares in the ship to other persons, but their transfers were not registered till January 1855. L. gave notice of his charge to the charterers, but did not search the register nor ascertain any of the charges in the ownership of the ship, and none of the transferees from H. had any notice of L.'s charge until after the end of the voyage. In February 1855, the ship's brokers, by the authority of the owners, insured the ship and freight, and on the termination of the voyage paid the wages of the captain and seamen. It having been decided that B. was entitled to three-eighths of the freight and L. to the remaining five-eighths, Held, that as against L. the wages of the captain and seamen, and the expenses of insurance, must be allowed as deductions from the gross freight. This was an appeal from an order of the Master of the Rolls, made upon the hearing of the cause for further consideration, and upon a motion to vary the chief clerk's certificate. The material facts of the case were as follows :-In the month of April 1854, W. P. Hammond, the then sole owner of the ship " Genghis Khan," chartered the ship to Messrs. Gibbs & Co., for a voyage to Australia, thence to the coast of Peru, and 1436 LINDSAY V. GIBBS 3 D^ 0. fc J. 891. thence home to this country, with a cargo of guano from the latter place. In or previous to the month of November 1854, W. P. Hammond transferred three-eighths of tha ship to the Defendants Briggs and others, and these transfers were registered in that month. In the month of December 1854, W. P. Hammond created a charge upon the homeward freight, from the coast of Peru to this country, in favour of the Plaintiffs, for the sum of j4000. The Plaintiffs gave immediate notice of their charge to Messrs. Gibbs & Co., but did not search the register, and it appeared that they had not any notice of the transfer of the three-eighths of the ship to the Defendants Briggs and others. Other transfers were made by W. P. Hammond of the remaining five-eighths of the ship to the other Defendants, and these latter transfers were regis-[691]-tered in the months of January and February 1855. In the month of January 1855, Messrs. Thompson & Co. were appointed by the then owners to be the ship's brokers. In January and February 1855, they, as the ship brokers, effected insurances on the ship and freight, for the homeward voyage, and they had not then, nor, as it appeared, had any of the owners at that time, any notice of the Plaintiffs' charge. In the month of June 1855, the ship arrived in this country, and Messrs. Thompson & Co., as brokers, then paid the wages of the captain and seamen. The bill in this suit having been filed by the Plaintiffs for the purpose of enforcing their charge against Messrs. Gibbs & Co. and the owners of the ship, the freight was paid into Court by Messrs. Gibbs & Co., and by the decree, it was declared (22 Beav. M2) that Messrs. Briggs were entitled to twenty-four sixty-fourths of the freight, and the Plaintiffs. to the remaining forty sixty-fourths, and the following accounts were directed :- 1. An account of the freight earned by the ship under the charter-party, from the 27th day of April 1854, the date of the charter-party. 2. An account of all charges and expenses properly incurred by and on behalf of the ship and of her voyage, in earning the freight under the charter-party; and in taking the accounts, all just allowances were to be made, and all parties were to have credit for sums paid by them, and to be charged with sums received by them respec tively. And it was declared, that the earnings of the ship were liable, in the first place, to make good and repay what should be found due in taking such accounts, and that the surplus was divisible as follows, viz., twenty-[692]-four sixty-fourths to the Defendants Briggs & Co., and forty sixty-fourths to the Plaintiffs. The chief clerk in taking the accounts directed by the decree allowed against the freight the premiums on the policies effected by Messrs. Thompson & Co., and the wages paid by them. The Plaintiffs sought by their motion to vary the certificate, by disallowing these payments, but the Master of the Rolls, by the order under appeal, reluaed the motion with costs, and ordered distribution, in conformity with the declarations in the original decree, of the surplus, after deducting the charges and expenses allowed by the chief clerk (26 Beav. 61). Upon the hearing of the appeal some doubts were suggested, whether the terms in which the account was directed by the original decree might not, as to some of the sums, preclude the Court from deciding the question in dispute according to the real merits of the case, and in order to save the necessity of a petition to rehear the original decree, it was agreed that the decree should in this respect be considered open. Mr. Selwya and Mr. Hetherington, for the Appellants. As regards the insurance on freight, we contend that Hammond having assigned the freight, could not give to any third person a better title than he himself had, and therefore could not encumber the freight as against us. He, therefore, could not bind us by directing an insurance. He retained an insurable interest, and must be taken to have insured for his own purposes, not on our behalf, we having given no authority for that purpose, and not wishing for an insurance, since, as is well known, large shipowners do not generally insure Then as to [693] the insurance on the ship, a part owner of a ship cannot, without authority, insure the ship and charge the expenses against the other partners ; Sett v. Humphries (2 Stark, 345); French v. Backhmtse (5 Burr. 2727); Abbott on Shipping (page 73); d, fortiori, an owner cannot charge insurance of the ship against us who have no interest at all in the ship, and are not benefited by its being insured. As to the wages, there is a lien on the ship for them, and why are they to be thrown on our fund? The freight is payable as soon as the cargo is discharged; wages are not payable, nor capable of calculation, till the ship has been swept 3DEO. &J.6M. LINDSAY V. GIBBS 1437 and cleaned; they, therefore, cannot properly be treated as a deduction from freight. Mr. R. Palmer and Mr. Cole, for Briggs & Co. That wages are a proper subject of deduction from the freight is almost too clear for argument, they being an expense immediately connected with it, and incurred for the sake and in the course of earning it. Then as to the insurances: the authorities referred to by the Plaintiffs do not touch the real question. Our case is this :-That the Plaintiffs took no pains to ascertain the ownership of the ship, which they easily might have learnt, and then have given us notice of their claim, as they ought to have done. Instead of this, they allowed us to go on dealing with Hammond and the other transferees of shares in the ship, as being the only persons interested in ship and freight. As against these parties, the deductions clearly must be allowed, and the Plaintiffs not having given notice of their title, cannot be in any better position than the persons with whom they allowed us to deal as apparent owners. [694] They referred to Green v. Briggs (6 Hare, 395); Cuto v. Irving (5 De G. & Sim. 210); Alexander v. Simtns (18 Beav. 80); Holilernesse v. Shocked (8 B. & C. 612); Robinson v. Gleadaw (2 Bing. N. C. 150). Mr. Druce, for the owners of the remaining shares in the ship. Although our names did not appear on the register at the time when the charge to the Plaintiffs was made, the slightest inquiry would have informed the Plaintiffs of the true state of the title. They made no inquiry, and allowed us to go on incurring expenses on the faith of their being paid out of freight, in which we were not aware that they had an interest. They must, therefore, allow these expenses out of the freight, and not throw any share of them upon the ship or on us personally. Mr. Selwyii, in reply. Judgment reserved. March 1. the lord justice knight bruce. This case is reported as to the original hearing (when the decree was made) in the 22d Volume of Mr. Beavan's Reports; and as to the motion for varying the certificate with the hearing on further consideration, in the Jurist of 28th August 1858 (now reported 26 Beav. 51). The order made on that motion and the hearing on further consideration is a subject of the present appeal-was originally the only subject of appeal; but while the matter was in argument before us the counsel on each side agreed that in addition the original decree, so far as the terms in which it [695] described the accounts directed by it and the declaration or direction contained in it concerning the application of the clear balance on those accounts, are concerned, should also be considered as under rehearing, and we so deal with the matter. The only dispute remaining in the cause (besides the question of costs) is whether the wages of the captain and crew of the vessel of which the freight for the voyage under discussion is in controversy-their wages, I mean, in respect of that voyage out and home, and the payments made for insuring the ship and freight in respect of the same voyage, ought to be...
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