On a previous occasion before the pleadings had been filed the defendant (the mortgagee) had applied to the court upon motion for the release of the ship and had in support of his motion, filed affidavits setting out all the facts afterwards appearing by his answer. The motion was refused, the court declining to release the ship at that stage of the proceedings, as the plaintiff's affidavits alleged collusion between the mortgagor and the mortgagee.

Butt, Q.C. and R. E. Webster, for the plaintiffs. -The defendant here claims not only the release of the ship, but also damages for her detention and costs. Even if he is entitled to her release, he can only recover damages if he can show that the plaintiff has been guilty of mala fides or crassa negligentia in arresting the ship: (The Evangelismos, 12 Moore P. C. C. 352; Swab. 378.) But the defendant cannot show this, as even now there is an important question of law pending, viz., whether the defendant, as mortgagee, is entitled as against the plaintiff to possession. Can a mortgagee claim in a suit by a co-owner to take a ship out of the possession of the court without leaving something in the place of the res to satisfy the claim of the plaintiff against his co-owner? Suppose the plaintiff's shares had been sold to him after the mortgage to the defendant; there was nothing to prevent the mortgagor from making the plaintiff his co-owner. A mortgagee must know that shares may be transferred after mortgage, and that the position of co-ownership may be so created, and that questions relating thereto may arise. Consequently, we submit that, although a ship may be mortgaged as a whole, co-owners may arrest for the purpose of utilizing what may remain after the mortgage is paid off and may insist on a sale for their contingent benefit after the mortgagees' claim is settled. In such case it cannot be said that the mortgagee is in any way injured by the plaintiff's shares not having been registered sooner, because the plaintiff cannot be in a different position than if he had bought the shares after the mortgage. The mortgage in the present case was registered in 1873, and that would give a year and a half in which to deal with the shares, and the mortgagee ought to presume that they would be dealt with. The Admiralty Court Act 1861 (24 Vict. c. 10), sects. 7 and 11, clearly contemplates a sale by co-owners, even though the ship be mortgaged, so that they may secure the benefit of the surplus. Till the hearing of the case the plaintiff had no opportunity of judging how far there was or was not a surplus and consequently was clearly entitled to arrest, and in arresting was acting bonâ fide. Even in case of the defendant being entitled to damages, the defendant has suffered nothing substantial as the charter-party the loss of which he fears need not be completed till the end of the present year. The plaintiff had good reason to believe that there was collusion between the mortgagor and mortgagee.

Cohen, Q.C. and E. C. Clarkson, for the defen. dant. We admit that the original arrest was not unlawful and that if the plaintiff, after ascertaining the facts from our answer and affidavits, had good reason to believe that there would be a surplus upon the sale of the ship he might ask for a sale, that the mortgage might be paid off and accounts taken. But where a co-owner having no title as against a mortgagee asks for an account and sale merely in the hope that something may turn up

[ADM.

he is not entitled to it either in this court or in the

Court of Chancery. If the plaintiff and the mortgagor had both united in the mortgage they might have undoubtedly had a suit for an account so long as the mortgagee did not intervene; but if the mortgagee does intervene the co-owner proceeding against the ship must either redeem or release the ship, because the mortgagee has a right to possession, and has a statutory power of sale, which gives him an absolute right to the ship. The court cannot order a sale of the ship against the wish of the mortgagee, as such an order would have the effect of depriving the mortgagee of property to which he is not entitled, and to the use of the ship by which he may earn freight, and recoup himself for the money advanced. To order a sale where the amount produced thereby would be less than the money secured would be contrary to the doctrines of equity and the practice of the Court of Chancery. The plaintiff should redeem if he wants a sale. [Sir R. PHILLIMORE. It may be out of the power of a small co-owner to redeem, and yet it seems hard to deprive him of rights against his co-owner, which he would possess if there were no mortgagee.] The plaintiff can have his accounts taken before the registrar, but he cannot have the sale, as that would injure the mortgagee. The mortgagee took his mortgage without notice of the plaintiff's ownership and his right can no more be interfered with than if he had purchased the whole ship from Baines without notice of the plaintiff's claim. By the Merchant Shipping Act 1854 (17 & 18 Vict. c. 104), sect. 71, a mortgagee acquires an absolute power to dispose of the ship, and the court is now asked to take away that power. If then the plaintiff has no right against the mortgagee, the keeping the ship under arrest, after the plaintiff became acquainted with the facts of the case as stated in the defendant's affidavits, was a wrongful detention. The Evangelismos (ubi sup.) was no doubt a strong decision, but we submit that it has been modified by subsequent cases, and if a ship is kept under arrest without any semblance of a right the person keeping her must pay the damages. It is not enough that a plaintiff should think he has good ground in law; there must be good ground. The court was induced to continue the arrest by a now abandoned statement as to the existence of fraud. If the court is induced by false representations to keep a ship under arrest this is enough to give a title to damages. The charge of collusion was not withdrawn till the hearing, and without that collusion the plaintiffs had no case at all. They had before them all the knowledge they now have when our affidavits on the motion were filed, and yet they kept the ship under arrest.

H. OF L.]

HOUSE OF LORDS.

Reported by C. E. MALDEN, Esq., Barrister-at-Law.

Friday, June 25, 1875.

STANTON v. RICHARDSON.

ON APPEAL FROM THE COURT OF EXCHEQUER CHAMBER IN ENGLAND.

Ship and shipping-Charter-party-Warranty of seaworthiness-Ship unfit for particular cargoObligation of owner.

A charter-party containing the words, "the ship to load the following cargo of lawful merchandise

and

..; a full and complete cargo of sugar in bags, hemp in compressed bales measurement goods not exceeding what the vessel can reasonably stow and carry over and above her tackles," gives the charterer the option in what form he will tender the cargo, provided he tenders some or all of the goods named and no other, and does not present a cargo of any kind or of all kinds together, which is unreasonable, as regards the nature of the goods he presents.

A shipowner, entering into a charter-party to carry such a cargo, is bound to provide a ship which is reasonably suited to carry that particular cargo, and is staunch and seaworthy for the purposes of that cargo, and should be kept so.

and

or

A charter-party provided that the ship should load "a full and complete cargo of sugar in bags, hemp in bales, measurement goods; specifying different rates of freight for "dry" and "wet" sugar. A cargo of" wet" sugar was provided by the charterer at the port of loading. A great deal of moisture drains from wet sugar, and, owing to the nature of the material, the ships pumps were unable to clear the ship of the drainage. The ship was perfectly seaworthy except for this particular cargo, and the pumps were sufficient for ordinary purposes, but she would not have been seaworthy for the voyage in her then condition.

The sugar had to be unloaded, and the charterer refused to reload it, or to provide another cargo. Cross actions were brought by the owner against the charterer for not providing a cargo, and by the charterer against the owner to recover damages by reason of the ship not being fit to carry the cargo provided.

The jury found that the cargo offered was a reasonable cargo, and that the ship was not reasonably fit to carry a reasonable cargo of wet sugar. Held (affirming the judgment of the court below) that the shipowner undertook by the charter-party that the ship should be reasonably fit for the carriage of a reasonable cargo of any of the goods specified in the charter-party, including wet sugar, and that the charterer was entitled to a verdict.

and

or

THE appellant, Stanton, was the owner of a vessel called the Isle of Wight, and agreed to charter her for a voyage from Manilla to Yloilo to England. The ship was to load a "full and complete cargo of sugar in bags, hemp in compressed bales, measurement goods, not exceeding what she can reasonably stow and carry over and above her tackles." The rate of freight was specified to be 41. 2s. 6d. per ton for " dry sugar, 41. 58. for "wet sugar, and 4l. 158. for hemp and measurement goods. The owner engaged that the ship "before and when receiving

[H. OF L.

cargo shall be a good risk for insurance," and he engaged to take all proper means to keep her tight, staunch, and strong during the voyage. The ship proceeded to Yloilo, and on survey was reported to be a first class risk, fit to carry a dry and perishable cargo to any part of the world.

A cargo of "wet" sugar in bags was provided by the charterer, Richardson. Much moisture drains from this sort of sugar, and when the greater part of the cargo had been loaded it was found that there was such an accumulation of molasses in the hold, that the ship would not be seaworthy if she proceeded in her then condition. The pumps were quite sufficient for ordinary purposes, but, owing to the depth of the hold and the nature of the material, they were unable to get rid of the drainage from the sugar, and no pumps adapted for such a cargo could be procured at Yloilo. The cargo had to be unloaded and warehoused at Yloilo, and was afterwards sent to England in another vessel, the Milton; and the charterer refused to furnish another cargo for the Isle of Wight.

Stanton therefore brought an action against him for not supplying a cargo; and Richardson brought a cross action for the damages he had sustained from the Isle of Wight not being fit for the cargo provided.

The cases were tried before Brett, J. at the sittings in London after Hilary Term, 1872, and he directed the jury that there was an implied warranty that the ship was fit to carry a reasonable cargo of Yloilo wet sugar, and the verdict was taken in favour of the charterer in both actions.

A rule was obtained for a new trial on the ground of misdirection, but was discharged by the Court of Common Pleas (Bovill, C.J., Byles and Brett, JJ.), as reported (ante, vol. 1, p. 449; L. Rep. 7 C. P. 421; 27 L. T. Rep. N. S 513); and their decision was affirmed by the Exchequer Chamber (Cockburn, C.J, Mellor, J., Bramwell, Cleasby, Pollock, and Amphlett, BB.), as reported (ante, vol. 2, p. 228; L. Rep. 9 C. P. 390; 30 L. T. Rep. N. S. 643).

From this judgment the present appeal was brought.

Manisty, Q.C. and A. L. Smith, who appeared for the appellant, urged the same arguments, and relied on the authorites cited in the courts below. Buit, Q.C. and J. C. Mathew were not called upon to argue for the respondent.

The LORD CHANCELLOR (Cairns). — My Lords, there cannot, I think, be the slightest doubt that in this case it would not have been correct to have left to the jury at the trial any question upon the construction of the charter-party, and indeed I do not understand that the contrary of that proposition was argued by the learned counsel for the appellant. There are no terms in the charterparty which require explanation by evidence, and by the opinion of a jury. The question of construction, therefore, being for the Court, the counsel for the appellant naturally felt themselves constrained to contend that the misdirection to be complained of on the part of Brett, J. was that he did not place upon the charter-party the construction for which the appellant contends, and then leave to the jury the question whether a reasonable cargo had been tendered, having regard to that construction of the charter-party on which the appellant insists.

I will ask your Lordships to turn to the charter-party, for the purpose of ascertaining, in the first place, what is the true construction to be put upon it. It provides that the ship, after arriving at Hongkong and discharging there, shall "sail for Manilla for orders to load either there or at Yloilo or at Zebu, the following cargo of lawful merchandise to be put within reach of the vessel's tackles by the freighters, or their agents." The freighters are bound to provide that "following cargo," whatever it may be, and they are to be allowed fifty working days for loading the cargo, and customary dispatch at the port of discharge, and if they detain the vessel longer they are to be liable to pay demurrage in the usual way.

and

or

measure

Now the cargo which, on the one hand, the charterers had the right to have carried, and which, on the other hand, they were bound to provide, is thus described: "A full and complete cargo of sugar in bags, hemp in compressed bales, ment goods." These words "and" and "or" are not without some significance, because they appear rather to show that this specification of different kinds of cargo was to be read either disjunctively or conjunctively, it might be all of one kind or it might be a mixture of the two kinds mentioned, "not exceeding what the vessel can reasonably stow and carry over and above her tackles." And then it provides for the passage which is to be performed; and then, in consideration of that, the freighters agree that freight on said cargo shall be paid "at the following rates if loaded at Manilla for the United Kingdom, 41. 2s. 6d. sterling for dry sugar; 41. 58. for wet sugar; 41. 15s. for hemp and measurement goods." Having regard to the specification of two prices for the two kinds of sugar mentioned, we are entitled in construing the contract to go back to the sentence where sugar was first mentioned. and to read the word there as if it were "wet or dry' sugar; then the contract becomes a contract to carry a full and complete cargo of wet or dry sugar in bags, hemp in compressed bales, and measurement goods, not exceeding what the vessel can reasonably stow."

66

Now as regards the cargo which might be tendered, and which the shipowner was bound to carry; I feel no difficulty in advising your Lordships as a matter of ordinary construction, about which, unless there is something to be found in other parts of the document qualifying the ordinary meaning of the words, there can be no doubt, that the meaning of this stipulation is that it gives to the charterer the option in what form he will tender the cargo; he may tender it all of wet sugar, or of dry sugar, or of hemp, or of measurement goods, or he may admix the different items of cargo as he thinks fit, always provided that he does not present a cargo of any kind, or of all kinds together, which is unreasonable as regards the nature of the goods which he presents. The only limit as regards quantity is that which is laid down, namely, what the vessel can reasonably stow. Provided he keeps within that limit, and presents goods which are of the ordinary kind at the place which is mentioned, he may take his choice in what form he will present the goods; that is to say, which of the various items mentioned he will choose as the cargo to be carried.

[H. OF L.

The consequence of any other construction would be, as regards the freighter or charterer, of the most serious kind. The ship is to come to Manilla in a limited number of days, the cargo must be put on board there: he must, according to the ordinary usage of merchants, if he is a prudent man, have his cargo prepared beforehand; he must have entered into his contracts, or have the goods in his store ready to be put on board. But, according to the view of the learned counsel for the appellant, his right to select the cargo to be put on board will have to be subject to considerations as to which he can form no proper opinion himself beforehand. He must consider what the pumps of the vessel, if they be the ordinary pumps, will be able to effect in the way of discharging the moisture arising from the wet sugar; he would have to consider whether the evaporation consequent upon the state of the weather will be greater or less at the actual time when the goods are put on board; and he will, therefore, not be in a position to provide a complete cargo of one of the specified articles, wet sugar, unless he will take the risk of the pumps being adequate to discharge the moisture, and of the state of the weather being such as not to throw auy unusually severe strain upon those pumps. It appears to me that these are conditions which it never could have been intended that the freighter or charterer would undertake. And, on the other hand, when your Lordships turn to the position of the shipowner, any inconvenience which may arise is one from which he can guard and protect himself in the simplest way possible. He it is who knows exactly what the pumps of his ship will do; he must be taken to know the nature of the cargo he engages to carry; he must be taken to know what wet sugar requires in the way of pumping power: and it is for him if he wishes to guard against any inconvenience upon the subject, to stipulate that as regards one item, which is onerous and irksome, namely, wet sugar, he will not, under any circumstances, carry beyond a certain amount. Therefore, when you compare the inconvenience of the burden as against the charterer, and the ease with which it may be borne by the shipowner, every consideration would lead to the conclusion that it is the shipowner who must protect himself by an express stipulation. But I am content to rest upon the ordinary meaning of the words, which appear to me to give to the charterer the option of how he will load the ship.

Now if that be so, the charter-party must be read in the events which have happened, as if it were a charter for a full and complete cargo of wet sugar, not exceeding what the vessel can reasonably carry over and above the tackles. If that be so, what is the obligation, as regards the ship, upon the shipowner? Clearly to provide a ship which is reasonably suited to carry that particular cargo; a ship which is staunch and seaworthy.

It was, indeed, attempted to be contended that that general obligation which would be implied by law, was in some way qualified by two actual provisions of the charter-party, especially the express provision as to insurance. That provision appears to me to be entirely consistent with, and not in any way antagonistic to, the implied undertaking that the ship shall be staunch and seaworthy. It is a separate and a higher engagement that the "vessel before and when receiving cargo shall be good risk for insurance," that is to say,

that she may be insured at the most favourable rate at which an insurance can be effected for the particular cargo. It was admitted, and could not be denied, that she might be staunch and seaworthy, and yet that it might not be possible to predicate of her that she was a good risk for insurance. Then the other express provision is that "in and during the voyage the master shall take all proper means to keep the vessel tight, staunch, and strong, well manned and found, and in every way fitted and provided for the voyage." That appears to me to take up the case at the commencement of the voyage, and in place of being inconsistent with an implied warranty that this ship should be staunch and seaworthy up to that time, to assume that the meaning of the contract was that up to that time she should be provided as a staunch and seaworthy ship, and that then there should commence this further obligation, that during the whole of the voyage the master should be bound to keep her in that state up to the time of her arrival.

Now if that is the construction, as I submit that it is,of the charter-party, was there any misdirection on the part of the learned judge? As I understand his charge he adopted this construction of the charter-party; he directed the jury, as he ought to have directed them, as a matter of law: This is the construction of the charter-partythose are the rights of the charterer-that is the obligation of the shipowner. And then he told the jury, taking that direction from him, to find whether the cargo of wet sugar presented to the shipowner at Yloilo was a reasonable cargo within the meaning of a charter-party having that construction. And the jury found with that direction, that the sugar offered to the captain was a reasonable cargo, that the ship was not reasonably fitted to carry a reasonable cargo of wet sugar, that the damage suffered by the sugar was not "the result of its own defective condition, without any defect in the ship, or any fault of the captain," and they found that the damage caused to the sugar was "caused by the unfitness of the ship to carry the cargo offered to her, or by the ship being unreasonably unfit to carry a reasonable cargo of Yloilo wet sugar, or by want of reasonable care or skill of the captain in treating the cargo delivered to him." I think the direction of the learned judge was perfectly correct, and with these findings following upon that direction, of course the case was entirely exhausted.

I submit that there is no ground for differing from the unanimous opinion of the Courts of Common Pleas and Exchequer Chamber, and I move that the judgment of those courts be affirmed, and this appeal dismissed with costs.

Lord HATHERLEY.-My Lords, the unanimity of the judges before whom this case has been argued in its successive stages, is not at all surprising, regard being had to the circumstances of the

case.

In the first place with regard to the construction of the contract, it appears to me that the learned judge at nisi prius was perfectly right in taking upon himself to construe that contract as a matter of law, and to state the result of such construction to the jury, provided, of course, that his construction be found to be correct.

It appears to me that there can be no doubt that this engagement was that the ship in question should call at the specified ports, amongst

[H. OF L.

Then

others Yloilo, that she should there take a complete cargo of sugar in bags, nothing being said in that part of the contract as to whether the sugar was to be wet or dry. She was to take " full and complete cargo of sugar in bags, hemp in compressed bales, and measurement goods." Therefore the cargo might either be a cargo of sugar in bags, or of hemp in compressed bales, or of measurement goods. Wet sugar might, we understand, be packed in bags; and to show that it was in contemplation, we have not only the fact stated in evidence that it is an article constantly shipped from Yloilo, but we have also an express provision in the charter-party as to what the price shall be, and the price is put at 41. 2s. 6d. per ton for dry sugar and at 47. 58. a ton for the wet sugar. Therefore it appears to me as plain as anything can well be, that the shipper had the choice of the cargo. whether it was to be of sugar at all in bags, or whether he should prefer to have it composed partly of sugar, and partly of other articles; and he had the choice as to the sugar itself whether it was to be wet or dry. The only misdirection complained of is with reference to this point as to the construction of the contract. The rest of the case seems to have been placed before the jury very clearly and distinctly. The judge asks, "Was the ship reasonably fit to carry a reasonable cargo of Yloilo wet sugar?" again he says, "If you think the sugar was the ordinary Yloilo cargo, then the damage is suffered by some defect in the ship, or some treatment of the captain." As regards the question of the pumps, what he says is, "The pumps were certified it is true, but they were not brought up and examined, it was assumed that they were sufficient. You have it in evidence that in ordinary sugar ships ordinary pumps are used. The only way you have to consider the matter here is this, whether though in an ordinary sugar ship ordinary pumps will do, whether this was an ordinary sugar ship, whether she was not too large for what she had undertaken to do unless she had extra appliances." Nothing could be more clear than that way of putting the case before the jury. The learned judge tells the jury that the shipper was entitled if he pleased to put on board a cargo wholly of wet sugar, in which I think he is quite correct; but he says that that wet sugar must be a reasonable cargo to be carried, and he leaves it entirely to the jury to say whether a reasonable cargo of Yloilo wet sugar was sup plied; they have found that it was. And with regard to the pumps, he puts the case in the exact way in which the difficulty has been encountered by the parties to the contract. The shipowner does not appear to have bethought himself what he was about to do when he stipulated that he would take this commodity, having this particular aud special character, with the common pumps that he had used hitherto in his ship with ordinary cargoes of a different description. It is not because he has not thought fit to protect himself, or to furnish himself, as he would have done if he had thought of it in sufficient time, with sufficient pumps for the cargo that he has undertaken to carry, that he is entitled to be relieved from his contract.

I apprehend the learned judge was quite right in telling the jury, as a matter of law, that he had contracted to carry a reasonable cargo of Yloilo wet sugar. As regards all the other parts