Ex.]

Monday, June 4, 1866.

THE EUROPEAN AND AUSTRALIAN ROYAL MAIL COMPANY (LIMITED) v. THE PENINSULAR AND ORIENTAL STEAM NAVIGATION COMPANY.

"Ship

within the meaning of the Merchant Shipping Act (17 & 18 Vict. c. 104), ss. 53, 55-Ship converted into coal-hulk-Transfer of without bill of sale. A ship registered under the Merchant Shipping Act may be so treated and dealt with as, at any rate between the parties to a transfer thereof, to be no longer a ship for the purposes of the 53rd section of that Act, and so to be transferable without a bill of sale like any other chattel, even, it would seem, although not becoming the subject of any of the contingencies specified in the 53rd section of the Act.

A vessel which had been registered was by the owners used for the space of four years as a mere coaling-hulk and workshop, moored at one of their coaling-stations; she was then transferred by them under an agreement in writing to a company to which the owners transferred their business. She was described in the agreement, and also in an invoice delivered, as a coalhulk:

Held, as a matter of fact, that under the circumstances of the case she was not a ship, at any rate as between the parties, so as to be by the 55th section of the Merchant Shipping Act transferable only by bill of sale, and therefore that the property in her passed to the

company.

This was an action of trover brought by the plts. against the defts. under the circumstances set forth below. By consent of the parties and in pursuance of the order of Bramwell, B. a special case was stated without pleadings.

The following facts appeared from the case :— The defts. were engaged in the year 1853 in carrying mails, passengers, and goods by steamvessels between England and ports in the Indian Ocean on the one hand, and Australia on the other. For the purposes of this line of vessels they had established a coaling station at King George's Sound, in Western Australia. The coal was sent out in sailing colliers, and, until the defts. in the year 1853 made use of the Larkins, as after mentioned, was discharged direct from the colliers into the defts.' steam-vessels or warehouses on shore. In the year 1853 the defts. purchased in England and sent out a vessel called the Larkins, to be used for coaling their vessels. This vessel was an old threemasted wooden vessel, which had been up to the time of its being so purchased always used as a sailing vessel, and was then duly registered and capable of being used as such. The defts. at that time caused her to be newly registered. They then loaded her with a cargo of coals and stores for the use of their vessels, and sent her direct to King George's Sound. Upon her arrival there all her masts, spars, and rigging, except the lower masts and standing rigging, were taken down and sent on shore, and she was moored fore and aft with two anchors. The officers and crew were then all discharged with the exception of two persons. The masts and rigging sent on shore were warehoused and taken care of there. From that time forward the Larkins remained at King George's Sound, and was used for the purpose of receiving on board the coal from the sailing colliers, storing it until wanted, and then delivering it out to the defts.' steam-vessels in the same manner as an ordinary coaling hulk, and she was also used as a workshop, and was never used for any other purposes. The plts. were incorporated in the year 1856 as a joint-stock company for the purposes of steam navigation, and in the latter part of that year they undertook the service of carrying mails, passengers,

[Ex.

and goods between England and ports in the Indian Ocean on the one hand, and Australia on the other, in the place of the defts., who retired from such service. A written agreement was entered into at this time between the plts. and the defts. with respect to various matters, and among other things it was provided by article 2 of such agreement as follows:

The European and Australian Company agree to purchase, and the Peninsular and Oriental Company to sell, the coalhulk Larkins, belonging to the latter company, now lying at King George's Sound, together with their stock of coals in Australia. The price of hulk, to be delivered in fair and sound condition, with all her appurtenances, is agreed at 60007., to be

paid on receipt of notice of delivery, and of the coals 358. per ton in store, to be paid for upon production of certificates of quantity supplied to each steamer.

In pursuance of this agreement, the Larkins was handed over by the defts. to the plts., one of the persons left on board as aforesaid delivering her over, on the 9th Feb. 1857, to their agent appointed for the purpose. On the 7th May an invoice was delivered to plts., in which she was termed the hulk Larkins.

In the month of Oct. 1857 the plts. accepted a bill of exchange drawn by the defts. for a sum including the price of the Larkins. In consequence of the pecuniary difficulties of the plts., the bill was Got met at maturity and never was paid.

No bill of sale of the Larkins was ever executed

by the defts. to the plts. From the 9th Feb. 1857 till the 18th May 1859 the plts. in the first instance, and afterwards the Royal Mail Company under an agreement with the plts., carried on the service with the vessels of the plts. as the defts. had previously carried it on, and employed the Larkins solely as a coaling hulk. In the early part of 1859 the plts. became greatly embarrassed, and were compelled to discontinue the service, and the bill before mentioned still continuing unpaid, the defts. thereupon applied to the sid Royal Mail Company, who were then in possession of the Larkins under the agreement lastly before mentioned, to deliver her up to them, which the Royal Mail Company, without instructions from the pits., accordingly did on the 18th May 1859. Since then the defts. have resumed the service and employed the Larkins as before described. The plts. company is now in the course of being wound-up. It was to be taken as admitted for the purposes of the case that there had been a demand by the plts. and a refusal by the defts. to deliver up the Larkins before action brought, and the court was to be at liberty to draw inferences of fact.

The plts. contended that the property in the Larkins had passed to them, and that defts. were not entitled to resume possession, and the defts. contended the contrary. The question for the court was whether under the circumstances the

plts. were entitled to recover. The Merchant Shipping Act (17 & 18 Vict. c. 104), s. 55, enacts that a registered ship, or any share therein, when disposed of to persons qualified to be owners of British ships, shall be transferred by bill of sale.

The

Horace Lloyd (with him Maude) for the plts.-The vessel in question is not a ship within the Act; it is a mere floating coal magazine, a chattel. parties have treated it as such in their dealings with it. It cannot be contended that a ship may not lose its character as such and become a mere chattel. One often sees at seaports instances of old ships used as mere storehouses. The definition of a ship given in the Act is, every description of vessel used in navigation not propelled by oars. vessel does not come within that definition.

This

Mellish Q. C. (with him Borill, Q. C. and Watkin Williams) for the defts.-I apprehend the true test is

this: had this vessel lost its right to sail about upon the seas as a British ship? This place where she was moored is a mere coaling station; there is no trade there; there would be no means. if the use of her as a coal-hulk ceased, of getting her away or utilising her in any way except by putting up again her rigging and spars which were preserved on shore, and sailing away. It is the commonest thing on the coast of Africa, in the palm-oil trade, for a ship to be used as a storehouse for some time and then to come home with a cargo herself. Would she, if she had done so, have been entitled to the privileges of a British ship? She never ceased to be upon the register. There are certain clauses that specify the events in which a ship ceases to be a British registered ship. The 53rd section enacts that where a registered ship is either actually or constructively lost, taken by the enemy, burnt or broken up, or if by reason of a transfer to any persons not qualified to be owners of British ships, or of any other matter or thing, any such ship as aforesaid ceases to be a British ship, the certificate of registry shall be given up under a penalty. The intention of the Act is, that the register shall be a complete list of all ships entitled to the privileges of British ships. So long as a ship is de facto a British ship on the register she cannot be transferred except by a bill of sale. [MARTIN, B.-The form of declaration mentioned in sect. 56 seems to be against your contention, for that must show how the vessel is propelled. POLLOCK, C. B.-Suppose the owner of a ship, after some calamity had occurred with reference to her, from some superstitious notion had made up his mind that she should not sail the seas again and sold her to be broken up?] She must be actually broken up, I contend, to pass otherwise than by bill of sale. Intention is not sufficient. The 53rd section is intended to provide for all cases in which what was once a British registered ship ceases to be so. If this is not so, there is a case where no provision is made for delivering up the certificate although the vessel ceases to be a British ship. There is nothing to prevent the transferees here using her as a British ship. [CHANNELL, B. referred to sects. 84 and 87, which provide, in cases where a ship is altered, for re-registration or forfeiture of the privileges of a British ship.]

Horace Lloyd in reply.--I submit that this is not really a question of law, but of fact. The question is, whether the Larkins was appropriated permanently to the purposes of a coal-hulk. [MARTIN, B. -They profess to sell her as a coal-hulk.] The argument of my friend proves too much. According to that it would have been impossible to convert her into a coal-hulk so as to pass as a chattel. This vessel, no doubt, continued to have a hull and a keel and other attributes of a ship, but all intention of using her as such had been abandoned.

POLLOCK, C. B.-I am of opinion that our judg ment should be for the plts. I agree with Mr. Lloyd that this is substantially a question of fact, and I think that under the circumstances the vessel in question had ceased to be a ship.

MARTIN, B.-I think that this vessel had really become a mere chattel, a coal-hulk as she was described, and that, therefore, she was not a ship within the meaning of the Act. For four years before she was purchased she had been used as a coalhulk, and occasionally as a workshop; after that the defts. sold her by the description of the “coalhulk Larkins." In pursuance of the agreement of sale she was delivered to the plts., and an invoice was given in which she is mentioned by a similar description. I think, as against the defts., she must

[Ex. CH.

be taken to be what they describe her themselves. She had been for a long time used as a coal-hulk, and it was never contended that it was really intended that she should ever be used again as a ship. Therefore I think she is not within the Act requiring the transfer to be by bill of sale. The 55th section enacts that a registered ship shall be transferred by bill of sale, and by the 56th section no individual shall be entitled to be registered as transferee of a ship until he has made a declaration in the form marked F. in the schedule. That form and the form of the bill of sale are to state various particulars, the name of the ship, and how she is propelled. I am clearly of opinion that what the Legislature were there dealing with was a ship to be propelled by steam or otherwise, not a thing which had been a ship four years before, but was then used as a warehouse. I should say, too, that however that may be, as against the defts. who had themselves sold her as a hulk, she must be taken to be such. After that sale I think she must clearly be taken as intended to be used only for coals and other stores.

CHANNELL, B.-If we are bound to consider this a ship, I think Mr. Mellish's argument is unanswerable. But the question is whether we are not st liberty to deal with this as a question of fat, and I think under the circumstances we are entitled so to do. I think that this was not a ship, and the 53rd section is therefore not decisive. The forms given in the schedule seem to me to go far to support the construction we have put on this case in dealing with the question as a matter of fact.

Judgment for pits. Attorneys, Upton, Johnson, and Upton; McCleod, Stenning, and Watney.

EXCHEQUER CHAMBER. Reported by W. MAYD, Esq., Barrister-at-Law.

ERROR FROM THE COMMON PLEAS.

Friday, June 15, 1866.

(Before POLLOCK, C. B., BRAmwell, CHANNELL, and PIGOTT, BB., MELLOR and SHEE, JJ.)

NIELL v. WHITWORTH.

The defts. contracted to sell to the plts. cotton to arrive at L. per ship from C. to be of a certain quality, with this stipulation: "the cotton to be taken from the quay." The defts. on its arrival warehoused the cot ton, and sent the plts. a delivery order. They refused to accept.

Held, that this was a stipulation introduced in favour of the seller, and not a condition precedent, upon the performance of which the vendee could insist; and that the contract amounted to a contract to deliver at a reason able time and circumstances, the article to be at the buyer's charge from the time of its landing on the quay.

This was an action for an alleged breach of a contract for the delivery of certain cotton (reported from the court below, 11 L. T. Rep. N. S. 677).

The declaration stated:

That the defts. bargained and sold to the plts., and the pits bought of the defts. certain cotton, that is to say, 500 bales of cotton guaranteed to be October shipment, at 151d per lb, to arrive from Calcutta in Liverpool per ship or ships, and to be fair Bengal cotton, the said cotton to be taken from the quay customary allowances of tare and draft, and the invoice to be dated from the date of the delivery of the last bale. The said cotton to be in merchantable condition, the damaged, if say, to be rejected, provided it could not be made merchantabie Should the said cotton be transhipped into other vessel arriving, the contract to hold good; but if any of the vessels

ships only. Payment for the said cotton to be made in cash within ten days, made equal to ten days and three months, and cash on account to be paid before delivery if required. Averment, that all conditions were fulfilled and all things happened and all times elapsed necessary to entitle the plts. to the delivery of the said cotton as agreed.

Breach:

That the defts. made default in delivering the said cotton as agreed, whereby the plts. had lost and been deprived of the profits which would have accrued to them from the delivery of the said cotton, and were prevented from fulfilling a contract entered into by them for the resale of the said cotton, and thereby lost great gains and profits, &c., and by reason of the premises the plts. incurred expenses in and about endeavouring to procure the delivery of the said cotton by the defts. as agreed.

The defts. pleaded, first, that the defts. did not bargain and sell to the pits. and the plts. did not buy from the defts. the cotton in the declaration mentioned upon the terms therein alleged; secondly, that the defts. did not make default in delivering the cotton in the declaration mentioned as therein alleged; thirdly, that the plts. were not ready to accept the cotton.

Issue thereon.

The cause was tried before Pigott, B., at the last Summer Assizes at Liverpool, when the following facts were taken by consent on the learned judge's note:--The plts. were merchants in London, the defts. were merchants at Manchester, and both dealt largely in cotton. On the 2nd Oct. 1863, the defts., through their brokers Truman and Rouse, sold to the plts. 500 bales of cotton at 15gd. per pound. The bought note was as follows:

Bought for account of Messrs. Neill Brothers, of B. Whitworth and Brothers, Manchester, 500 bales of cotton at 151d. per pound, guaranteed October shipment, to arrive in Liverpool

per ship or ships from Calcutta. The cotton guaranteed fair Bengal, any slight variation in mark not to vitiate this contract. In case of dispute arising out of this contract, the matter to be referred to two respectable brokers, who shall decide as to quality, and the allowance, if any to be made.

The cotton to be taken from the quay customary allowance of tare and draft, and the invoice to be dated from date o delivery of last bale.

To be in merchantable condition; the damaged, if any, to be rejected, provided it cannot be made merchantable. Should the cotton be transhipped into other vessels, the contract to hold good; but if any of the vessels be lost the contract to be void so far as regards such ships only.

Payment, cash within ten days, made equal to ten days and three months. Cash on account before delivery if required. TRUEMAN and ROUSE.

On the 28th Oct. 1863 the plts. re-sold the cotton to one Clarke, through the same brokers, at 183d. per lb. On the 8th Jan. 1864 the defts. declared the Talavera and the Fort George as the ships by which the cotton was to arrive, 250 bales by each. The Talavera arrived at Liverpool on the 3rd Feb. with a cargo of cotton, which was landed on the quay there and subsequently warehoused. Application was made on the part of the plts. for delivery orders, but none were given or tendered until after the cotton had been carried to the warehouse. By the dock regulations at Liverpool the authorities have power to warehouse all goods after they had been twenty-four hours on the quay.

The Fort George was stranded in Carnarvon-bay, and her cargo was landed there and forwarded by railway to Liverpool. Arrived there it was put into the "wreck transit-sheds" on the quay, which is considered as part of the quay. The 250 bales ex Fort George were afterwards removed from the wreck transit-sheds to the warehouse.

On a subsequent occasion the vendors (the defts.) offered to deliver the whole 500 bales from the warehouse, but at quay weights, and without any charge for warehousing, or to cart them back to the quay and deliver thein there. The plts. however refused to take them, insisting that the defts. had broken their contract by allowing the cotton to be warehoused instead of delivering it on arrival from the quay.

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A verdict was taken for the plts. with 21091. 7s. 6d. damages, leave being reserved to the defts. to move to enter a verdict for them, or to reduce the damages, the court to be at liberty to draw such inferences of fact as a jury might have drawn, and to make all such amendments as the judge at Nisi Prius might have done.

Brett, Q. C., in Michaelmas Term last, obtained a rule msi to enter the verdict for the defts., or to reduce the damages, on the grounds that the stipulation in the contract, that the cotton should be taken from the quay, was in favour of the vendors, or, if not, that it was a stipulation only, and not a condition in the contract; and secondly, that the damages should be either nominal, or at most the difference between the contract price and the market price on the day of the breach. That rule was made absolute on the 26th Jan. last. The plts. now appealed.

Mellish, Q. C. for the apps.-The stipulation in the contract, that the cotton was to be delivered to the plts. from the quay, was not a stipulation introduced in favour of the sellers merely, but was introduced delivery; and by it the sellers were bound to for the purpose of appointing a time and place of deliver, and the buyers to take, the cotton from the The term "delivery" includes acceptance by the buyers. As to the other question of damages, there is a direct decision against me in the Q. B.

quay.

Holker (Cohen with him), for the resps., was not called upon.

POLLOCK, C. B.-We are all of opinion that the judgment of the court below should be affirmed, for the reasons assigned in the court below.

Judgment affirmed.

HOUSE OF LORDS.

Reported by JAMES PATERSON, Esq., Barrister-at-Law.

Tuesday, June 5, 1866.

MERSEY BOARD v. GIBBS.

MERSEY BOARD v. PENHALLOW.

Negligence - Public statutory trustees- Liability for servants-Review of authorities.

G., the owner of a cargo which was damaged by reason of the ship's stranding on a mud-bank negligently left at the entrance of a harbour vested in the Mersey Board by statute, sned the board for damage. The defence was that the board acted under a statute; that they derived no personal benefit from the management of the docks; that they took no part personally in the management, but merely appointed servants and officers in discharge of their public duty, and that the negligence was not theirs, but was solely that of one of their servants:

Held (affirming the judgment of the Ex. Ch.), that the case of public statutory trustees, if not servants of the Crown, did not differ from that of absolute owners levying tolls for their own benefit, and that the board were liable in damages to G.

Dictum of Lord Cottenham, L. C., in Duncan v. Findlater, 6 Cl. & F. 894, overruled.

This was a proceeding in error from a judgment of the Court of Ex. Ch. sitting in error from the Court of Ex., reversing the judgment given in that court in favour of the defts. below, who are the plts. in error, upon a demurrer to the declaration.

The action was commenced on the 15th Oct. 1855. It was originally brought against the trustees of the

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MERSEY BOARD v GIBBS.

Liverpool Docks, but upon the passing of the Mersey Docks and Harbour Act 1857, by which the Liverpool Docks were vested in the Mersey Docks and Harbour Board, a suggestion was, pursuant to the said Act, entered upon the record, and the action was continued against the said board, the plts. in error.

The declaration contained two counts. The first count alleged that the plts. below were the owners of a cargo of guano on board the ship called the Sierra Nevada, and that the said ship in endeavouring to enter a certain dock of the defts.' below, called the Wellington Half-tide dock, struck against a bank of mud remaining by the negligence of the defts. in the entrance of the dock. The second count alleged that the defts. below, knowing that the said dock was by reason of an accumulation of mud therein in an unfit state to be navigated, did not take reasonable care to put the same into a fit state for that purpose, whereupon the Sierra Nevada in endeavouring to enter into the dock struck against the mud, and the cargo thereby became damaged.

The defts. below pleaded four pleas. The first plea was not guilty, and the last a demurrer to the whole declaration. The plts. took issue on the first three pleas and joined in demurrer.

The demurrer was argued before the Court of Ex. in Easter and Michaelmas Terms 1856, and that court gave judgment in favour of the defts. below, on the ground that the case was governed by the decision in Metcalfe v. Hetherington, 11 Ex. Rep. 257: (see 1 Hurlstone & Norman's Reps. p. 439; 2 L. T. Rep. N. S. 806.)

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time and manner of every ship coming into the docks. By sect. 86 a penalty is imposed on any master bringing a vessel into the docks contrary to the directions of the harbour master or dock masters. And by the 6 Geo. 4, c. clxxxvii. s. 134, the trustees were empowered to pay as they should see occasion for damage caused by the insufficiency of their works or the negligence of their servants.

The point of law to be determined in the present case was, whether a public board, the members of which receive no emolument whatever direct or indirect, appointed under the provisions of an Act of Parliame t to carry out certain duties imposed upon them by the Legislature for the general benefit of the community, are liable for damage sustained by reason of the default of one of their officers. where no improper conduct on the part of the board was the cause of the injury.

In the judgment given by the Court of Ex. Ch., in favour of the plts. below on the demurrer, reversing the judgment of the Court of Ex., there were some expressions which at the time led to the belief that that judgment was to some extent based upon the allegation of knowledge in the second count. This belief induced the defts, below to delay the bringing error on that judgment until the facts were ascertained. On the trial of the issues in fact, no evidence was given or suggestion made of any actual knowledge on the part either of the plts. in error or of their servants of the existence of the supposed mud-bank, and the learned Baron who tried the cause refused to leave the question of knowledge to the jury.

The issues in fact came on for trial before Martin, B. and a special jury, at the assizes held at Liverpool in the autumn of 1858, when a verdict was found and given for the plts. below.

In Michaelmas Term 1858 the Court of Ex. was moved on behalf of the defts. below for a rule to show cause why a rule for a new trial should not be had, on the ground, among others, that the learned judge did not leave the question whether the defts. below had any knowledge of the existence of the mud-bank to the jury. The rule was refused as to this ground. A rule was granted on the ground of surprise, which was subsequently discharged.

The owners of the ship also brought an action against the plts. in error, in respect of the damage sustained by the vessel on the same occasion. That action (Penhallow and others v. The Mersey Docks and Harbour Board) came on for trial before the Lord Chief Baron and a special jury at the Middlesex sittings after Michaelmas Term, in the year 1859, when the learned Lord Chief Baron directed the jury, that if, in their opinion, the cause of the misfortune was a bank of mud in the dock, and the defts. by their servants had the means of knowing the state of the dock and were negligently ignorant of it, then in the opinion of him the Lord Chief Baron, the defts. below were liable. A bill of exceptions was tendered to this ruling, and the jury thereupon found a verdict for the plts. below, and judgment was signed thereon in the Court of Ex.

The defts. below in that action brought error, and the Court of Ex. Ch. overruled the bill of exceptions, and confirmed the judgment given by the Court of Ex.: (sce 5 L. T. Rep. N. S. 42.)

The Acts of Parliament relating to the Liverpool Docks contain the following among other enactments: By sect. 81 of the 51 Geo. 3, c. cxliii., the harbour master and dock masters were empowered to direct the removal of vessels from one part of a dock to another. By sect. 82, the harbour master and dock masters were empowered to direct the

The defts. brought error to the H. of L. in both

cases.

The following learned Judges attended the Hous upon the argument, viz., Channell, B., Blackbura Keating, and Shee, JJ., and Pigott, B.

Sir F. Kelly, Q. C., Mellish, Q. C., and Quain, for the plts. in error, contended that the judgment ought to be reversed, because the declaration contained no averment that the trustees of the Liverpocl Docks exceeded their statutory powers, or that they acted maliciously or oppressively, or in bad faith, contrary to their own judgment. And b cause no action is by law sustainable against a body of trustees acting without remuneration in the dis charge of public duties imposed upon them by the Legislature for damage occasioned solely by the negligence of officers, the appointment of whom is a branch of the duty of such trustees.

The Solicitor-General (Collier), Sir H. Cairns, Q.CCleasby, Q. C., Honyman, and V. Lushington for the defts. in error.

The cases referred to in the arguments have all been fully reviewed and discussed in the judgments. and are therefore here omitted.

At the conclusion of the arguments the House put the following questions to the learned judges: Mersey Board v. Gibbs-Does the declaration in this case state a good cause of action? Mersey Board v. Penhallow-Is the judgment of the Court of Ex. Ch. right?

The learned Judges took time to consider. and afterwards returned their unanimous opinion, de livered as follows by