Smith v The Bank of New South Wales; The Staffordshire
| Jurisdiction | UK Non-devolved |
| Judgment Date | 13 February 1872 |
| Date | 13 February 1872 |
| Court | Privy Council |
English Reports Citation: 17 E.R. 378
ON APPEAL FROM THE HIGH COURT OF ADMIRALTY, IRELAND.
Mews' Dig. tit. Shipping, A. X. Bottomry, 1. Instruments amounting to, 2. Validity, a. Matters affecting, 9. Practice; XXVI. Admiralty Law and Practice, 5. Vice-Admiralty, etc., Courts. S.C. L.R. 4 P.C. 194; 41 L.J. Adm. 49; 27 L.T. 46; 20 W.R. 557; 1 Asp. 365; and below 25 L.T. 137. See The Onward, 1873, L.R. 4 Ad. and E. 50. 30 and 31 Vict. c. 114, s, 90 and that part of s. 91 which gave an appeal to the Privy Council were repealed by the Statute Law Revision Act (No. 2), 1893.
[443] ON APPEAL FROM THE HIGH COURT OF ADMIRALTY, IRELAND. WILLIAM HENRY SMITH.,-Appellant; THE BANK OF NEW SOUTH WALES,-Respondents * [Feb. 9, 10, 13, 1872]. the " staffordshire." A Bottomry Bond on a Ship and freight was given by the Master for repairs of the Ship (already subject to a mortgage), with an agreement by the Bondholder, the Ship's Agent, that if a Bill of Exchange, drawn by the Master upon the Mortgagee, should be duly honoured, the Bond should not be enforced. The Drawee died before the Bill was presented, and neither administration nor probate of his Will had been taken out, when the holder of the Bill, in ignorance of the death of the Drawee, presented the Bill for acceptance. Held, that it was not necessary, in order to entitle the Bondholder to enforce the Bottomry Bond, that there should have been such a dishonour of the Bill as might have been necessary to give a right of action against a Drawee or Indorsee of the Bill, and it was sufficient that what was the reasonable course, for the purpose of getting the Bill accepted and paid, should have been taken, which, having regard to the circumstances of the case, appeared to the Judicial Committee to be established; and the Bond held good. The Bond on the Ship and freight was made absolute on the arrival of the Ship at Callao, but the Bond also hypothecated the freight to be earned by the Ship from that place to any other port or ports:-Held, that the Bond was good pro tanto as to the Ship, but void with respect to the subsequent freight earned in the voyage from Callao to England [8 Moo. P.C. (N.S.), 464-465]. The case of The Jacob (4 Rob. 245) commented on [8 Moo. P.C. (N.S.), 465]. * Present: Sir James William Colvile, The Lord Justice Mellish, Sir Montague Edward Smith, and Sir Robert Porrett Collier. 378 SMITH V. BANK OF NEW SOUTH WALES [1.872] VIII MOORE N.S., 444 This was an appeal from the decree of the High Court of Admiralty of Ireland (a), in a suit insti-[444]-tuted by the Respondents, to enforce payment of a Bottomry Bond for £3265, executed at Melbourne by Barrett, the Captain of the Ship Staffordshire, on the Ship and freight. The suit was defended by the Appellant, a Merchant in London, the Owner of 42/64ths. of the Vessel. Captain Barrett was the Owner of the remaining 22/64ths. The Bond was executed in favour of Messrs. Dickson and Williams, Ship Agents at Melbourne, who afterwards assigned the Bond to the Respondents. The Defendant by his answer, set up as a defence that the Bond was given as a collateral security only, for the payment of certain Bills of Exchange drawn on C. Gumm, of the City of London, the Mortgagee of the Ship; that before the Bills were presented Gumm died; and the answer alleged that, shortly after the Bills had arrived at maturity the Executors of Gumm had tendered the amount, but that the offer of payment had been refused. The Defendant also alleged, that the amount for which the Bond had been given had been raised without pressing necessity, and without communication with the Defendant in England.. The facts were as follows: - The Staffordshire sailed from London for Melbourne, with a general Cargo, and arrived in Melbourne on the 4th of June, 1869. The Ship was [445] under charter to proceed from Melbourne to Callao, and there to load a cargo of Guano for the United Kingdom; but the charterparty was conditional on her arriving at Callao before the 30th of September, 1869. The Ship before she sailed from London had been mortgaged by her Owners, the Appellant and Captain Barrett, to Gumm; and as further security for the advances which Gumm had made, the Owners, by a Letter, assigned to Gumm the freight and earnings of the Ship, appointing him their Attorney to receive the freight and insurance moneys, and constituted him Ship's husband and sole Agent for the Ship at home and abroad. The Ship was consigned by Gumm to Messrs. Dickson and Williams, of Melbourne, as Ship's Agents or Brokers at that Port, and this arrangement was con-tirmed by the Appellant. After a long voyage, in which the Vessel encountered very heavy weather, she arrived in Melbourne in June, 1869, leaking badly; and it was considered necessary that she should go into dock and be put on a patent slip, to ascertain where she was leaking and for repairs. The Captain did not know, and could not have ascertained, what repairs would be required until she had been put on the slip; but he believed that they would not be of an extensive character, and that the freight in his hands, which amounted to over £2000, would be more than sufficient to pay for all necessary disbursements. The Ship was unable to get on the slip until some days after the 16th of July, which was the English mail day; it was then found that she required extensive repairs, and to be caulked, metalled, and [446] refastened. The repairs were done under the supervision- of the Surveyors of the Chamber of Commerce, and the Vessel left the slip about the 12th of August. By the next mail, on the 13th of August, the Captain wrote to the Appellant, and also to Gumm, informing them of the nature of the repairs which had been found to be necessary, and of the probable cost, being about £3000, and stating to the Appellant that he did not know how the money which would be necessary to pay for the repairs and other disbursements of the Vessel was to be raised. No reply to these Letters could have been received for upwards of four months. The exact cost of the repairs was not known until the 24th of August, when the (a) The appeal came before the Judicial Committee in pursuance of the Admiralty Court Act (Ireland), 1867 (30th and 31st Viet. c. 114), which, by sect, 90, abolishes appeals from the Court of Admiralty to the High Court of Delegates in Ireland; and by sect. 91 gives a right of appeal to the Court of appeal in Chancery in Ireland, and thence to Her Majesty in Council; or in the first instance, direct to Her Majesty in Council. Sect. 105 enacts, that the provisions in the several Acts in force relating to the appellate jurisdiction of Her Majesty's Privy Council in England, are to extend and apply to appeals under that Act. 379 VIII MOORE N.S., 447 SMITH V. BANK OF NEW SOUTH WALES [1872] Shipwrights' Bill was sent in. The amount of the repairs alone was £3007 13s. Id., and there were other disbursements necessary before the Vessel could be sent to Sea. At that time a reply to a communication from Melbourne to England could not have been received much before December, even if such communication and such reply had been forwarded between Point de Galle and England by Telegram. There was no telegraphic communication between Australia and Point de Galle, and the mail between those places ran once a month only. The Captain then applied to the Ship Agents, Messrs. Dickson and Williams, to advance the amount required, over and above the freight he had in hand. That Firm refused at first, but upon the Shipwright threatening to arrest the Ship and sell her, they agreed to advance the money upon a Bottomry Bond of the Ship and freight. [447] Gumm had transacted business with Messrs. Dickson and Williams for many years, and it appeared that in order to serve him Mr. Dickson suggested to the Captain (after it had been agreed that a Bottomry Bond should be given) that he would take the Captain's draft on Gumm for the amount of the Bond without premium, charging simply the usual commission, and that if the draft was duly honoured instructions should be given that the Bond should not be enforced. To this the Captain agreed, and upon those terms a Bottomry Bond was executed on the 7th of September, 1870, for the sum of £3265. The Bond was 011 the Ship and freight, to be earned on her intended voyage from Melbourne to Callao, and from thence to any other port or ports; and it was stipulated that the Bond was to be absolute seven days after her arrival at Callao. Before the Vessel sailed the Ship's accounts were made out, and the Captain drew a Bill, at ten days' sight, on Gumm, in favour of Messrs. Dickson and Williams, for the amount due to them, viz. £3586 10s. Id. Afterwards the Captain drew another Bill for £19 7s. 5d., the amount of some small accounts which he required to pay. These Bills were negotiated by...
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