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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Veitch v. Kalning and Others [1877] ScotLR 15_96 (16 November 1877)
URL: http://www.bailii.org/scot/cases/ScotCS/1877/15SLR0096.html
Cite as: [1877] SLR 15_96, [1877] ScotLR 15_96
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SCOTTISH_SLR_Court_of_Session
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Court of Session Inner House First Division.
[
v.
Process — Multiplepoinding — Claim.
Facts:
Circumstances held sufficient to take a case out of the general rule of law that where a master of a vessel in a foreign port is unable to communicate with the owners of the vessel or the owners of cargo, and finds it necessary to raise funds by means of a bond of bottomry, and to include the cargo therein, he is entitled to do so.
A party whose claim in one character in a multiplepoinding had been rejected, allowed to lodge a claim in a different character upon payment of expenses found due in the former branch of the action.
The “Anna Alida” was chartered to proceed with a cargo from Newcastle to Libau. In leaving the former port she came into collision with another vessel, for which her owners became liable in damages. Notwithstanding of this occurrence she continued on her voyage, but in consequence of bad weather she was disabled, and was forced to take refuge in the port of Leith. While she was at Leith an action of damages was raised against the master in respect of the collision, on the dependence of which she was arrested on 22d January 187G. The arrestments were not withdrawn till 10th March.
On her arrival at Leith it was found that she needed considerable repairs. The cargo was discharged. Mr Becker was employed by the master as shipbroker, and he took charge of the cargo, and also saw to the repairing of the ship. Including the damages for the collision, amounting as paid to £106 or thereby, an account was incurred to him of £580, of which by much the larger part fell on the ship and freight exclusively. But even this account did not include the whole cost of the repairs which were executed on the ship.
The charterer William Scott, and the owners of cargo Thiedemann & Company and Schulte & Schemmann, raised an action against Kalning, who was captain and part-owner of the ship, for repetition of the freight and damages, on the ground that the ship was unseaworthy when she started, and that the repairs executed on her at Leith were insufficient. The defender was assoilzied, but the same parties made application to the Sheriff of Midlothian, on the ground that their adventure had been defeated by these delays, to grant warrant for the unshipment and sale of the cargo and consignation in the hands of the Clerk of Court. This warrant was granted, and the proceeds, £888, 11s. 10d., were lodged with the Clerk of Court, the nominal raiser of this action, which was a multiplepoinding for division of that fund, and by him placed in the Royal Bank.
While the ship lay at Leith, Kalning, who with his mate was owner of the whole ship, had repairs
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executed on her, and to pay for these he borrowed £500 from William Philip Dymond, Falmouth, granting a bond of bottomry therefor, in which, besides binding himself and the vessel, he bound her cargo and freight. Before executing this bond, his agent Mr Becker, the ship-broker, had gone to Newcastle to see the charterer and owners of cargo. The result of the evidence (in the proof ultimately led in the case) as to what passed between them was, that although Mr Becker intimated to them that there was an intention of granting such a bond over the cargo as well as the ship, he received no encouragement from them. Mr Dymond accordingly, in virtue of his bond of bottomry, claimed on the fund for its amount; Kalning claimed to be ranked in respect of freight for £124, 15s. 4d; and Scott and the owners of cargo claimed the fund in medio and expenses.
Scott and others pleaded—“(1) The claimants being owners of the cargo are entitled to the price obtained therefor when it was sold under judicial warrant. (2) The freight to which the master was in the circumstances entitled having been already paid, and the voyage not having been further prosecuted, the said cargo is not subject to any lien in favour of the ship. (3) Nor has it been well hypothecated under the bottomry bond, and the competing claims ought to be repelled, with expenses.”
The Lord Ordinary after proof found that the owners of the ship were entitled to freight to the amount of £89, 1s. 7d., and that under the bond of bottomry this was payable to Mr Dymond: Quoad ultra repelled Dymond's claim, and found the claimants Scott and others entitled to the whole fund. He further found Dymond liable to the claimants Scott and others in the expenses incurred by them. He added the following note, in which, and in the opinions of the Court, the facts as proved are sufficiently brought out:—
…The master and mate were the owners of the ship. Beyond £80 which they obtained from Riga they had no money and no credit. They could not provide the money necessary for the repairs, and the ship, which was one of a very inferior class, was ultimately sold for £130-a less sum than the cost of the repairs.
In January 1876 Mr Becker went to Newcastle and saw two of the owners of cargo, and the agent for the underwriters of part of the cargo. Nothing was arranged. The Lord Ordinary cannot rely on the accuracy of the account given by Mr Becker; but he takes it as clear that no proposal was made to pledge the cargo for the expenses which had been incurred at Leith.
In these circumstances the master, at the instance of Mr Becker, granted, on 6th March 1876, a bond of bottomry for £500 over ship, freight, and cargo. This was done without any notice to the owners of cargo. If they had notice of it, it is plain that they would not have consented to it. As prudent men they could not have been expected to give their consent; for the Lord Ordinary does not see how they could have expected to derive any advantage from it.
The owners of the ship were bound to complete their voyage, and to pay for the repairs which the ship needed in order to enable this to be done. But they could not do so. It seems to the Lord Ordinary that the only reasonable course was to put the cargo in another ship, which according to the evidence could have been easily procured. If this had been done, the owners of cargo would have been bound to pay a new freight. But it would not have been larger than that of which they would have been relieved by the failure of the ‘Anna Alida’ to complete her voyage. To charge the cargo with the repairs and other costs which were necessary to enable the ship to proceed on her voyage, was, in the opinion of the Lord Ordinary, to throw the costs of the ship on the owners of the cargo without any benefit to them. The owners of cargo may have been remiss in not declaring what they proposed to do. But this did not, it is thought, justify the master in granting the bottomry bond. If it could be justified at all, the Lord Ordinary conceives that they must have had special notice.
For these reasons the Lord Ordinary is of opinion that the bond of bottomry does not constitute a valid obligation against the owner of the cargo.
“The Lord Ordinary has found that the master is entitled to freight. This right has not been disputed by the owners of cargo. But the reason is, that they arrested the ship after the repairs had been executed, and by that arrestment prevented her from completing her voyage. It is not questioned that the bottomry bond is good against ship and freight.”
Dymond reclaimed, and argued-This doctrine had been established, that where information had been given to owners of goods of the disablement of a vessel and they did nothing, the captain was entitled to raise money to enable him to proceed. Silence implied consent on their part that the captain should use his discretion-Lord Stowell's opinion in the case of the “Gratitudina, ” 3 Rob. 240; followed by Dr Lushington in the case of the “Lord Cochrane, ” 2 W. Robinson 333; the “Buonaparte, ” 8 Moore P. C. Reps. 459; the “Onward, ” Jan. 28, 1873, 4 Law Rep., Adm. and Ecc. 38 (Sir Robert Phillimore's opinion); case of the “Kamak, ” Droege & Co. v. Stuart & Simson, June 14, 1869, 2 Law Rep., P. C. App. 505; the “Lizzie, ” 2 Law Rep., Adm. and Ecc. 254; “Sultan, ” 2 Swabey's Adm. Reps. 504; Glasscott v. Lang, 2 Phillip's Chanc. Cases, 321 (opinion of the Lord Chancellor). Now here, even although there was not any notice given of the execution of this bond by advertisement, yet there was an equivalent. The specialty of this case, viz., that the master was also owner of the ship, whereas in all the cases quoted the owners of the ships were absent, made no difference, for there was the same reason here to justify the hypothecation of the cargo, viz., necessity.
The claimants Scott and others argued-There was no such notice given here as was required in the cases quoted, nor was there any benefit likely to arise from the course adopted. This was an attempt to convert a personal liability into a bottomry debt, which was incompetent. This was not a case where the shipmaster had bonded the cargo to enable him to complete the voyage for its benefit, but rather an attempt to make the cargo pay for the ship's debts— Jacobsen and Others v. Hausen and Others, Feb. 22, 1850, 12 D. 762; Kleinwort, Cohen, & Co. v. Cassa Maritima of Genoa, Jan. 18, 1877, 2 Law Rep., App. Ca., 156.
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At advising—
In these circumstances, the master granted a bottomry bond, and in doing so he included the cargo as well as the ship and freight. The question is—Was he justified in that? Now, there is no doubt that the master of a vessel in a foreign port, where there is no possibility of communicating with the owners of the vessel, the owners of the cargo, or the various persons interested, is the representative of these various parties, and it is his duty to do his best for all of them. If he has no funds, and cannot proceed on his voyage without raising money by way of bottomry, and if it be necessary to include the cargo in the bond, he is entitled to do so. The reason why that is allowable is obvious. If he could not do so he would be unable to prosecute his voyage, and he would have the very unpleasant alternative that he must either abandon his voyage or bring his ship to sale with the cargo in what might be the most disastrous circumstances. That is the kind of case where a master is justified in granting a bond of bottomry over the ship, and including in it a hypothecation of cargo.
Now, the question is—Was the master here in such circumstances? The owners were not absent. They were in Leith. The captain himself was the principal owner, and the only other owner was the mate, who was also present. There are other circumstances too, tending in the same direction. The owners had no money and no credit. There was a sum of £80 due to the master at Riga, which he got remitted to him, but it went a very short way in the discharge of his liabilities. But beyond that, as the Lord Ordinary says, they had no money and no credit. They had nothing but a damaged ship.
This is not therefore the case where the master finds himself with the owner of the ship absent and without the means of falling back on the resources of the owners; nor is it the case where a master is not able to communicate with the owners of cargo. The owners of the cargo here were at Newcastle, and between Leith and Newcastle the facilities of communication are very great. In point of fact, communication was had with them. Mr Becker went to Newcastle. I think the owners got notice from him that there was some intention of executing this bottomry bond, but that is immaterial, for as the owners of the ship had the means of communicating with the owners of the cargo, they were not entitled to hypothecate the cargo without communicating with them. Now, they may have communicated this intention, as I said, but they got no encouragement. The owners of cargo distinctly intimated that such a proceeding would not be submitted to. Just consider what a speculative proceeding this was. The owners, unless they succeeded in bringing this ship safely to the end of her voyage, must have been hopelessly insolvent. The vessel required extensive repairs, and these repairs, when executed, were not very satisfactory. Were the owners of the cargo bound to submit to the execution of a bottomry bond to enable this very speculative voyage to be made? That, I think, would be carrying the rule of law to a very absurd length. This case is a very special one. It is to be determined by reference to its own circumstances, and not by reference to any rule of law. Taking it in that way, I can see no reason for holding that the owners of the cargo were bound to submit to the execution of this bond.
The Court adhered.
A week after judgment had been pronounced as above, a note was presented for the claimant Scott and others, for warrant on the Royal Bank to pay the balance of the consigned fund to him. Mr Dymond resisted this application, and asked leave to put in a claim for £112, 8s. 6d. on behalf of the captain, as representing the amount of general average due from the cargo. The captain had not in his claim made any mention of this item, but in his condescendence he had stated that there were certain claims of that kind due to him.
It was argued for Mr Dymond—This claim could be made by him as an arresting creditor of the captain holding a decree of date 23d October 1876 for £500, and so long as the fund was in Court any claimant could come forward on such conditions as the circumstances of the case required— Morgan v. Morris, March 11, 1858, 18 D. 797,
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Argued for Scott and others—A party who had not been called would no doubt be allowed to come forward with his claim at any time, but when he had been in Court in one character, and his claim as in that character had been rejected, he could not come forward with a new claim in a different character. The captain although in full ‘knowledge of this claim failed to make it, and neither he nor his assignee could now do so— Molleson v. Duncan, June 3, 1874, 1 R. 964 (Lord President's opinion). This claim was in the same position, and should be rejected on the same principle, as a defence which was “competent and omitted”— Stoddart v. Bell, May 23, 1860, 22 D. 1092; Downie v. Rae, Nov. 20, 1832, 11 S. 51.
The Court allowed the claim to be received upon payment by Mr Dymond of the previous expenses found due by him in the cause, which included inter alia the expenses incurred by the claimants Scott and others.
Counsel for Claimant Dymond (Reclaimer)— Fraser—Thorburn. Agents— Boyd, Macdonald, & Lowson, S.S.C.
Counsel for Claimants Scott and Others (Respondents)— Gr. Smith—Young. Agent— Thomas Dowie, S.S.C.