ADM.]

BURKE v. ROGERSON.

[CHAN.

the thirty-three barrels, which had been sound at the hold-facts which would tend to show that the Christiansand, were sound still. The plts. would cause of the amalgamation was heat, and not the account for the presence of this alleged heat in one tempestuous weather which the ship had encounor two ways. One explanation is, that the heat of tered. There is, undoubtedly, a serious conflict of the engine melted the butter. The fore hold was evidence, and that too amongst witnesses appacompletely separated from the engine-room by, rently entitled to the confidence of the court. All first, a wooden partition one and a half inches the court can do under such circumstances is imthick; secondly, a vacant space of four inches; partially to weigh that evidence, and say which thirdly, an iron bulkhead quarter of an inch under all the circumstances ought to preponderate. thick; fourthly, a vacant space of six inches, The plts. are bound to establish their own case ventilated by an artificial draught of air. Then affirmatively to the extent of proving that their own came the boiler; the fire itself was another foot proportion of the cargo or goods on arrival at the further off, and one circumstance alone proves port of discharge were in a damaged condition. that the heat (if any) in the hold could not have This proved, the onus then falls on the defts. of come from the engine, for heat from the engine- proving that the original stowage was good, and room, if it had penetrated into the hold, would that the perils of the seas subsequently occurring of course have most affected the butter nearest to created the damage. I think that the evidence the engine; but it appeared at Christiansand, shows that the original stowage was done in the whilst the contents of kegs in the fore part of ordinary form, and with the usual precautions; that the hold had been all wasted and mixed with bran, the butter became mixed with the bran, not from the row of kegs which stood next the aft bulkhead h at, but by the displacement and shaking up of placed on their sides had not suffered, with one ex- the cargo; and that this displacement may fairly ception, that a cask had one of its ends knocked be attributed to the storm to which the ship was out-the end farthest from the engine and even undoubtedly exposed on her voyage to Christianfrom that cask the butter had not come out; sand; in short, that the damage arose from perils as the master described it, it only "looked of the sea, as excepted in bills of landing. I must out." Mr. Brett also relied upon the same pronounce therefore in favour of the ship and fact as a proof that the damage to the butter against the claim of the plts. had arisen from shaking, since the butter next to the after-bulkheads of the hold would, as being placed in the part of the hold nearest to the middle of the vessel, be the least shaken. The other explanation offered of the alleged heat is the fermentation of the bran, The plts. produced witnesses, provision merchants and grain importers, Jun. 26, 27, 29, 30, Feb. 20 and 21, and May 29, 1866.

to show that bran is liable to ferment, whether dry or wet, and that it should never be stowed along with butter. But Professor Way is decisive that bran will not ferment unless either it be in an improper condition when shipped, or be wetted after shipment. Now, neither of these circumstances existed here. It was admitted that the bran was good bran, and no water seems to have forced its way into the fore hold during any part of the voyage, although some did into the aft hold. It is also proved to be a common practice to stow butter and bran together in the same hold, and that on one occasion butter and bran were conveyed safely in the very same hold of the Alexandra. The plts., however, suggested two possible causes for fermentation: first, that the butter melted, and, penetrating the bran, set up fermentation; secondly, that the heat of the engine dried the bran in the after end of the hold, and in that process expelled the natural moisture of the bran in the form of vapour, being unable to escape on account of tarpaulins, and would be condensed into moisture at the colder part, that is, the fore part of the hold, and then this moisture falling upon the undried bran there, would constitute such an addition of moisture as to set up fermentation. I mention these two theories, but only to reject them. It is clear that they rest upon the supposition that the engine heated the hold. That supposition I have already pronounced untenable. The result of the evidence seems to me clear that the butter was never melted at all. I

think that the appearance of the butter mixed with the bran, and of the bran bags made greasy by the butter, misled the plts. into thinking that the butter had been melted. I also think that, if fermentation ever took place in the bran, it was not set up until after the bran had been discharged on shore, possibly from some of the bran bags which had been wetted in the after hold; for in the fore hold there never was any wet. I do not mean to say that I can reconcile this evidence, and especially that which describes the bran at Hull in a heated state, as also

COURT OF APPEAL IN CHANCERY.
Reported by THOMAS BROOKSBANK and E. STEWART
ROCHE, EsqS., Barristers-at-Law.

(Before the LORDS JUSTICES.)

BURKE v. ROGERSON.

Suretyship-Vessel-Cargo-Munitions of war- -Belligerent risk-Concealment of—Discharge of surety— Evidence-Pleadings —Correspondence not in issue.

The deft. R. agreed to sell two steamships to the A. D. Steam Navigation Company, of which the plts. were two of the directors, and it was agreed that the purchase-money should be paid partly in shares and partly in bills of exchange accepted by the company, aud that the vessels should b mortgaged to R. to secure the remainder of the purchase-money. The plts. then agreed to indorse certain of the bills, and in consideration of that guarantee, R agreed that they should be owners of two-thirds of the property mortgaged. The vessels were never formally transferred to the company, and no mortgage was ever executed, but soon after the agreement R., acting as agent of his own firm, and assuming to act as agent of the company, dispatched the vessels to Constantinople, and thence dispatched one of them to Trebizond, laden with munitions of war for the Circassians, who were then at war with Russia: Held, that, as the dangerous nature of the cargo, which exposed the vessel to extraordinary risk, was concealed from the company by R., he could not have enforced the agreement against the company, and (on this ground affirming the decree of the M. R.) that the plts. were entitled to be relieved from their liability. Correspondence between R. and the company's manager at Constantinople, which tended to show that R. had dealt with the vessels when at that port as his own absolute property, and had contemplated a sale there of one or both of them, was admitted as part of the evidence, although neither the correspondence itself nor R.'s alleged intention to sell was put in issue by the pleadings.

This was an appeal by the deft. Rogerson from a decree of the M. R., the hearing before whom is reported 13 L. T. Rep. N. S. 115.

BURKE v. ROGERSON.

Southgate, Q. C. and Locock Webb, for the plts., sup- sequently, and on the 1st June 1863, Rogerson ported the decree.

CHAN.}

BURKE V. ROGERSON.

[CHAN.

from the dates of the bills 18337. 10s., eighteen months from the dates of the bills 18331. 10s., you agreeing to indorse new bills to take up those first drawn until they will come to the dates named, that is, twelve and eighteen months respectively, at which date you become owners of twothirds of the property mortgaged to Jno. Rogerson and Co. It is further understood that you will accept bills to raise the funds to work the boats and colliery, you being liable, in event of the company not paying, to the extent of two-thirds of the amount, which is not to exceed 1000l." The other letter of guarantee of the same date was signed by Rogerson and Co., Burke and Kearns, and it is in these terms; it is addressed to Mr. Rogerson : "Sir,-We agree to the contents of your letter dated 5th June 1863; that is, we guarantee payment of the acceptances of the Anglo-Danubian Steam Navigation Company to the extent of 3667, in event of the company not paying them, in twelve months, say for 18331. 10s., at eighteen months for

but subject to legal approval." Then they read the | letter of the gentleman who inspected the ships, who reported in favour of the vessels, and then it was further resolved, that simultaneously with the above arrangements being carried out to the satisfaction of the legal advisers of the company, and of Mr. Rogerson, the latter should be empowered, subject to the limit of expense after mentioned, to get ready and insure and dispatch to the Danube, for and on behalf of the company, the two boats called the Louise Crawshay and the Chesapeake, and also to provide and send out by these boats proper materials for working the colliery, and that he also beempowered to send out for the company and maintain seven men for working the collieries, he also, for the company, to pay their wages. It was further resolved" that the court will reimburse Mr. Rogerson for any necessary expenses that he may incur to the satisfaction of the directors for the above purposes to the extent of 1000l., Mr. Rogerson on his part undertaking to provide the necessary funds to that extent as and when required, it being under-18331. 10s., and we also agree to keep our indorsestood that such reimbursements may be made, if the directors shall so desire, by acceptances of the company to be given from time to time according to the outlay actually made and approved, and to be payable respectively at four months after date." It was further resolved, "that Mr. C. Lankasky be appointed manager of the boats and collieries, and of the traffic and business of the company, at the weekly salary of 34., in addition to his reasonable and necessary travelling expenses. Mr. Lankasky to act in accordance with written instructions to be furnished to him through the secretary of the company."

In pursuance of these arrangements, 200 shares in the company were, on the 6th June 1863, allotted to John Rogerson, and he paid 2000l. for the shares and received it back again in part payment of the purchase-money for the ships. În further pursuance of these arrangements, seven bills of exchange drawn by John Rogerson upon the company for sums amounting in the whole to 75001. were accepted by the company, three of these bills being at four months for the sums of 1000%, 1000%, and 750%., and the other four bills being at six months for the sums of 1000, 1000, 416%, and 3347.; and on the 11th June 1863, all these bills thus accepted were handed over to John Rogerson. On the same day the secretary of the company, at the request of John Rogerson, addressed to him a letter which was in these terms: "I am instructed by the board of directors to authorise you to dispatch the two steamers, the Chesapeake and the Louise Crawshay, to the Danube immediately, together with such materials as you may deem requisite to work the boats and conduct the traffic of the company on the river, and the Theiss and Save. I am further directed to authorise you to send out such a number of miners, and such quantities of tools and materials, as you may deem requisite to work the mines of the company at Dobra." In the meantime an arrangement had been come to between the plts. and John Rogerson for the plts.' indorsing the bills upon terms agreed upon between them. These terms were contained in two letters of guarantee bearing date respectively the 5th June 1863, and were as follows: Gentlemen,-In consideration of your agreeing to guarantee the payment of the acceptances of the Anglo-Danubian Steam Navigation Company drawn for the purpose of paying for the boats to the extent of two-thirds of the 55007."-that is the difference between the 7500l. and the 2000l. which Rogerson paid to Kearns and received back in respect of the ships-"to the extent of two-thirds of the 5500%, that is 36677., I engage that you shall not be called upon to pay under that guarantee except upon the following date, viz., twelve months MARI. CAS.-VOL. II.

|

ment on bills to keep them negotiable until they mature. We also agree to accept bills to raise the funds to work the boats and colliery, and to be liable for two-thirds in event of the company not paying the same to the extent of 1000%, John Rogerson and Co. being responsible for the remaining one-third to the bank." The company also afterwards accepted two other bills drawn upon them by Rogerson for the sums of 500l. and 3001. in part of the 1000l. agreed to be advanced by him.

The two steamships, the Chesapeake and the Louise Crawshay, were dispatched by John Rogerson and Co. from Newcastle and proceeded to Constantinople. They reached that place at the following: times, the Chesapeake on the 20th Aug., and the Louise Crawshay on the 23rd Sept. 1863. They were not sent on to the Danube. The Chesapeake, when she left this country, and indeed when she was agreed to be sold to the company, had on board a considerable quantity of munitions of war for the use of the Circassians in the war in which they were then engaged with Russia, and after her arrival at Constantinople she proceeded with this cargo to the neighbourhood of Trebizond, where she delivered the cargo, and then returned to Constantinople, arriving there on the 18th Sept. Her crew was soon afterwards discharged by Rogerson, and she was berthed at Constantinople. The crew of the Louise Crawshay was also discharged soon after her arrival at Constantinople, and she was also berthed there. The three bills for 1000l., 1000%, and 7501., which were drawn payable at four months, became due on the 8th Oct. 1863. They were not paid by the company, and on the 9th and 12th Oct. 1863 John Rogerson commenced an action at law against the plts. upon these bills. The plts. thereupon, on the 22nd Dec. 1863, filed the bill in this cause against John Rogerson, William Scott, who was his partner in the firm of J. Rogerson and Co., and John William Couchman, another of the directors of the company who had taken part in the resolutions of June 1863, and in the indorsement of the bills by the company, and also against the Anglo-Danubian Company, setting forth in detail a great variety of circumstances connected with the purchase of the ships by the company, the indorsement of the bills by the plts., the guarantee given to them by Rogerson and Co., the dispatch of the vessels from this country, their being berthed at Constantinople, and their having been, as alleged, subsequently employed by Rogerson, and therefore praying "that it might be declared that, under the circumstances, the plts. were altogether discharged from liability on the bills so indorsed as aforesaid, and that the defts. John Rogerson and William Scott are severally bound and ought to indemnify

2 C

CHAN.]

BURKE v. ROGERSON.

[CHAN.

the plts. against the actions of Messrs. Lambton | that the sale of the steamships proceeded throughand Co."-there was an action brought by Messrs. out upon the footing of the plts. being personally Lambton and Co. upon one of the bills which had responsible for the purchase-money. been indorsed, and which the plts. had been compelled to pay-" or that the defts. J. Rogerson and W. Scott may be decreed specifically to perform the agreements of the 2nd and 5th June 1863, the plts. being ready and willing, and thereby offering specifically to perform such agreements on their part. That an account may be taken under the directions of the court of all moneys received by J. Rogerson and W. Scott, or either of them, or by any other person for their or his use, and of all moneys, if any, agreed to be paid to John Rogerson and William Scott, or either of them, and not yet received for or in respect of the conveyance of passengers or freight conveyed by or otherwise for or in respect of the use or employment of the steamers the Chesapeake and Louise Crawshay respectively, since the 2nd June 1863, and of the profits realised by J. Rogerson and W. Scott, or either of them, for the adventure or speculation. That it may be declared that what upon taking such account may be found to be due from J. Rogerson and W. Scott respectively, ought to be applied, so far as may be necessary, in satisfaction of the sums due on the seven several bills of exchange;" and then the bill prays for an injunction to restrain the actions commenced on the indorsement of the bills.

The bill, which is most loosely and inaptly drawn, rests, as I understand it, on the right of the plts. to be relieved from their liability upon the bills on several grounds. First, that the agreement by the company for the purchase of the ships was made upon the faith of representations on the part of Rogerson which were not well founded, and of promises on his part which were not performed, and amongst other such representations and promises, it alleges that he promised that the ships, if the company would purchase them, should be forthwith vested in the company, and he would procure the company to be duly registered as the owners of them, and the ships should be immediately dispatched to the Danube, which the bill alleges was of great importance to the company, with a view to their securing the benefit of the autumn trade on the river in that year; but that in fact Rogerson had not at the time any title to the ships, and that the ships were never in fact sent to the Danube; secondly, that the mortgages stipulated for by the agreement of the company to be made to Rogerson, were not in fact procured by him to be made; and, thirdly, that the deft. Rogerson was not entitled under the agreement for the purchase by the company to take any freight to any port on the Black Sea, and that he took on board the Chesapeake the munitions of war above mentioned with full knowledge of the purpose for which they were intended, and thereby exposed that vessel to the risk of being seized and confiscated by the Russians, and that he wholly concealed from the plts. the fact of the vessel being laden with such munitions of war.

The deft. Rogerson, by his answer, insists in effect that he had a good title to the ships, and that the ships were not sent to the Danube in consequence only of the necessary funds for that purpose not having been supplied by the company or the plts., he having expended the 1000l. agreed to be advanced by him; that the mortgages were not taken by him only in consequence of the agreement on the part of the company to furnish the list of the calls and of the shareholders not having been fulfilled by them; and that under the agreement with the company he was entitled to carry cargo, although consisting of the above-mentioned munitions of war; and by the answer he wholly denies having made any such false or fraudulent representations as are alleged by the bill, and he alleges

There is an enormous mass of evidence in the cause, consisting in part of letters and other documents, and in part of affidavits and depositions. Amongst the letters in evidence there is a long correspondence between the deft. Rogerson and Mr. Lankasky, the managing agent of the company at Constantinople, from which it clearly appears that, very soon after the steamships had been purchased by the company, the deft. Rogerson contemplated selling the ships when they arrived at Constantinople, and that he was continually intending to do so, and gave express directions that this intention on his part should not be made known to the AngloDanubian Company. The parol evidence, consisting of the affidavits and depositions, is painfully conflicting and contradictory, and if it were necessary to decide the case upon that evidence, I should fed great difficulty in arriving at a conclusion upon it although, upon the whole, I think that the evidere on the part of the plts. is more trustworthy the that on the part of the defts. In the progress of te cause the plts. paid into court to the credit of cause the sum of 33331 13s. 4d. as the pris of an interim injunction to restrain the proceeding in the actions brought against them, and at the time of the hearing of the cause there was in court the sum of 38237. 14s. 2d. Bank Three per Ceat. Annuities, which had arisen from the money so paid in. The steamships were also sold in the progress of the cause, and at the time of the hearing there was also in court the sum of 17067. 9s. 5d. Bank Three per Cent. Annuities, which had arisen from the proceeds of the sale of the steamships. There was likewise in court at the time of the hearing of the cause the sum of 550l. 15s. Bank Three per Cent Annuities, which stood in trust in the cause, and in another cause of the Anglo-Danubian Stea Navigation and Colliery Company (Limited) v. Rogerst, and had arisen from moneys paid in by the company. Upon the hearing of the cause the M. R. made the following decree:-It was declared that the pits were not liable upon the bills of exchange indorsed by them as in the pleadings mentioned, or any of such bills; and generally an injunction was granted to restrain the defts. from suing upon those bills, and the plts. having, pursuant to the order we mak and the M. R. before us, paid the sum of 33334. 135.4 into court, and that being invested, and there being in court in the whole this sum of 55301, it was ordered that 38231. Bank Three per Cent. Annuities, part of the 55301. Bank Annuities, and any interest accrued due upon them, be transferred and pa to the plts., but such transfer and payments were not to take place until after a certain time; that is giving back to the plts. the sum which they had paid in as the price of the injunction, the cours being of opinion that the injunction was proper, and the injunction was made perpetual. Then it was declared that Rogerson and Scott were bound to recoup to the plts. the sum of 10031. 14s. paid by them on the 4th Jan. 1864 to Messrs. Lambton and Co.; that is, Burke and Kearns having been made liable upon one of the bills which they had indorsed, which had been handed over to Lambton and Co., and having been compelled to pay that amount, they were entitled to recover that amount from Rogerson and Co. Then there is a direction to tax the costs. And it was ordered that the plts. Burke and Kearns do pay to the Anglo-Danubian Steam Navigation and Colliery Company and John William Couchman, their costs and add those costs to their own, and then it was ordered that Rogerson and Scott should pay to the plts. the balance of the sum of 10031. 14s. and inte rest, and of the taxed costs of the plts. in this suit,