Scottish Court of Session Decisions

By charter-party dated 9th October 1886 Messrs William Hunter & Company, shipowners, 12 Waterloo Street, Glasgow, chartered the steamship “Mula,” of which Mr William Hunter was the registered owner, to Messrs Alfred Laming & Company, steam shipping agents, 8 Leadenhall Street, London, for a voyage from the United Kingdom to the Mediterranean and back. The voyage under the charter-party was to commence on 25th October 1886, at which date the “Mula” was to be placed at the disposal of the charterers at Tyne, Tees, or London, in their option, the vessel being then in every way fitted for the service. The ship was not delivered to the charterers in terms of the charter-party, but by agreement dated 15th April 1887 the parties thereto agreed that the charter-party should remain in force, the hire being reduced to £240 per calendar month for the first

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voyage, and the charterers having the option of re-chartering the steamer for certain further periods upon giving certain notices at £250 per month.

Hunter & Company had in September 1886 mortgaged the ship to Messrs Thomas Barr, John Forrester, and David Inglis Urquhart, all merchants in Glasgow, in security for a loan of £1350. In the following month (the month when the first charter-party was entered into) the “Mula” was by her owners put into the hands of Messrs Ramage & Ferguson, shipbuilders and engineers, Leith, for the execution of extensive alterations and repairs. The owners being unable to pay the shipbuilders' account an agreement was entered into in February 1887 between Barr, Forrester, and Urquhart, of the first, second, and third part respectively, Ramage & Ferguson of the fourth part, and William Hunter of the fifth part. It was arranged that the first three parties should increase their total advances to £2650, and receive a first mortgage over the ship for that amount; that the fourth parties should receive £1300 in cash, and promissory-notes, and a second mortgage for the balance of their account; and that the fifth party should keep the ship insured at Lloyd's for the sum of the £4000 at least in name of the first, second, third, and fourth parties. The fourth parties (Ramage & Ferguson) further “renounce and discharge any claim for a lien present or future over the said vessel in connection with or arising out of said repairs, and undertake and bind and oblige themselves fully to execute and complete all repairs on said vessel which may be required to make her fit and ready for sea in every respect, and they further undertake and bind and oblige themselves that the said vessel shall, when said repairs are executed, pass the Board of Trade's Surveyor at Leith, and that all within the space of one month from the last date hereof (9th February).” …

The insurance promised was never effected.

Upon 22d April 1887 Barr and Forrester and Urquhart entered into possession of the ship as mortgagees. Upon 28th April they obtained an interim interdict forbidding its removal, and on the following day they raised an action of payment, declarator, and sale in the Court of Session against the said William Hunter, to which Messrs Laming & Company were not called, and upon 9th June the following advertisement appeared in the Glasgow Herald, The London Shipping Gazette, and other newspapers:—

To be Sold by Auction

( By Warrant of the Court of Session, Scotland)

“Within the Commercial Hotel, Commercial Street, Leith, on Monday the 20th June 1887, at Two o'clock afternoon (subject to such Conditions of Sale as will be there and then produced), Upset Price, £4500 Sterling,

The Iron Screw Steamer ‘Mula,’ of London, 671 tons gross, 513 net register, as she now lies in the Edinburgh Dock, Leith, together with her boats, stores, &c., as per inventory.

……..

The articles and conditions of sale, the inventory of the steamer and her stores, and a copy of the charter-party or contract betwixt the late managing owners and Alfred Laming & Co., can be seen.”. .

This advertisement only appeared once, and as subseqently inserted omitted all reference to the charter-party.

The interdict was declared perpetual upon 9th May. Upon 14th June an agreement was entered into between Barr, Forrester, and Urquhart of the first part, and Ramage & Ferguson of the second part, to have the ship bought in if no one bid more than the upset price of £4500. By said agreement Messrs Ramage & Ferguson also undertook “(first) that they shall bear the whole maintenance, risk, and expense as aforesaid of the vessel in implementing the said charters entered into by the owner until after the completion of the first voyage under the charter-party with Laming & Company as aforesaid; and (second), that they shall bear and pay the whole claims against the ship, including as aforesaid up to the date of raising the said action (29th April 1887), and the expense of disputing such claims if they elect to do so, all charges and expenses subsequent to said 29th April being borne by the parties hereto, according to their respective interests as aforesaid, until the vessel sails on her first voyage from Leith: It being the meaning and intention of the parties that until the ship is freed from all obligations entered into by, or incurred on behalf of, the owner, in so far as enforceable against the vessel as preferable to the mortgages under Laming & Company's charter up to the end of the first voyage and she is in a position to earn clear freight for the whole parties, any charges or expenses enforceable against the vessel preferably to the mortgagees shall be borne solely by the second party.”

Upon 20th June the ship was sold under decree of the Court to John White Seater, shipbroker, 56 Bernard Street, Leith, who proved to be the nominee or agent of Messrs Ramage & Ferguson.

Messrs Laming & Company, the charterers, after repeatedly pressing Messrs Hunter & Company for delivery of the “Mula,” and after writing to them and to the mortgagees that they would hold them liable for any loss they might sustain through the ship not having been delivered in terms of the charter-party, raised an action against J. W. Seater, Messrs Barr, Forrester, and Urquhart, and Messrs Ramage & Ferguson, and also against Messrs Hunter & Company and their sole partner William Hunter.

The summons was signeted upon 4th July 1887, and sought to have it found and declared “that the defender John White Seater is bound forthwith to deliver to the pursuers the iron screw-steamship or vessel called the ‘Mula,’ of which he is now the registered owner, in the state, for the purposes, and under the terms and conditions expressed in a charter-party entered into between the defenders William Hunter & Company and the pursuers, dated the 9th day of October 1886, and agreement endorsed thereon between the defenders William Hunter & Company and the pursuers, dated the 15th day of April 1887, together with the bunker coals, belonging to the pursuers, on board of the said steamship or vessel, amounting to 215 tons or thereby: And it being so found and declared. the defender John White Seater ought and should be decerned and ordained, by decree foresaid, forthwith to deliver to the pursuers the said steamship or vessel in the state, for the purposes,

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and under the terms and conditions expressed in the said charter-party and agreement endorsed thereon, together with the said bunker coals belonging to the pursuers as aforesaid: Or alternatively, in the event of the defender John White Seater failing so to deliver to the pursuers the said steamship or vessel, and coals therein, the whole defenders ought and should be decerned and ordained, by decree foresaid, conjunctly and severally, to make payment to the pursuers (1) of the sum of £1000 in name of damages; and (2) of the sum of £100 as the value of the said bunker coals, with interest on these two sums at the rate of five per centum per annum from the date of citation hereon until payment: Together with the sum of £100, or such other sum as our said Lords shall modify as the expenses of the process to follow hereon.”…

Delivery of the “Mula” was afterwards given to the pursuers in August 1887, and in consequence thereof the pursuers upon 15th November 1887 lodged the following minute of restriction:—

Guthrie, for the pursuers, stated that since the action was raised negotiations had been entered into and concluded between the defenders and them, whereby the steamship or vessel called the ‘Mula,’ and the coals on board thereof, both referred to on record, had now been delivered to the pursuers on the terms and conditions set forth in the correspondence between Messrs Beveridge, Sutherland, & Smith, S.S.C., Leith, and Mr David Turnbull, W.S., Edinburgh, agents for the defenders and pursuers respectively, a copy of which correspondence is herewith produced and referred to; and he accordingly restricted, as he hereby restricts, the conclusions of the summons to a conclusion against the whole defenders, conjunctly and severally, for the sum of £500, in name of damages sustained by the pursuers prior to the delivery of the said vessel, with interest thereon and expenses as concluded for.”

The pursuers averred in condescendence 7 that the said mortgagees at the date of their respective mortgages were fully aware of the existence of the said charter-party between the defenders William Hunter & Company and the pursuers, and when the terms of the said charter-party were altered by the said agreement endorsed thereon, they were also made fully aware of these alterations by the defender William Hunter and others.” They also averred that they did not know of the proposed sale of the ship until it was advertised, and that they believed any sale of the ship would be made under burden of their charter-party. They further averred in condescendence 14 that they “had, for part of the period included in their charter-party, re-chartered the said steamship for a cargo of pitch, but through the unwarrantable delay in delivering the said ship they were unable to fulfil their contract, and the pursuers are informed that the re-charterers were obliged to charter the ship ‘Greta’ to perform the said pitch voyage at an increase of freight amounting to £124, 5s., of which the defenders are aware. Not only have the pursuers been deprived of reaping the benefits which would have accrued to them had their charter-party with the defenders William Hunter & Company been duly implemented, but they have been subjected to claims for damages at the instance of the re-charterers, which with brokerage and commissions will amount to £150, and which presently form the subject of an action in the English Courts at the instance of the re-charcterers against the pursuers. The pursuers have been deprived of the services of the said vessel, and have made disbursements on the faith of the charter-party, and in connection therewith, which will amount in all to £500, which is the loss and damage which they have thus suffered through the breach of contract of the defenders.”

The defenders denied the statements in Cond. 7 and 14, referred to the proceedings in the action of sale, and “explained that the pursuers got delivery of the vessel as soon as she was fit for sea. Till the pursuers got delivery of her she was unfit for sea and unfit to fulfil her charter. The mortgagees after they took possession of her had to expend large sums in repairing her in order to make her fit for sea, and though they were not bound to do so, they repaired the vessel, and as soon as the Board of Trade certificate was got, handed her over to pursuers.” They also stated that “at the time when these mortgages were granted the defenders were not aware of the terms of the charter-party founded on by the pursuers. … In the month of April 1887 Messrs Barr and Forrester, who had never given up possession under their original mortgage, in conjunction with the defender Urquhart entered into possession of the ship in virtue of the said mortgage for £2650, and instituted an action of declarator and sale which is still depending in Court, and under which the vessel has been sold. … When formal possession was taken as aforesaid in 1887 on behalf of Barr, Forrester, and Urquhart, Messrs Ramage & Ferguson maintained that the ship was and had been in their possession and subject to their lien as shipwrights from December 1886, and that their claim was preferable to all others. The said ship from December 1886 till she was sold was uninterruptedly in the possession of the mortgagees or of Ramage & Ferguson, claiming under their lien.” They further stated—(Stat. 6) “The said charter-party is not a fair charter-party, and the owner had no right to enter into such a contract. Said charter-party if carried out would very largely reduce the value of the defenders' securities under their mortgages, and it was entered into at a time when the pursuers knew that the owner Hunter was not in possession of the ‘Mula’ or entitled to charter her, and when he knew of said mortgages and that the defenders were in possession of the vessel. The defenders, however, with the view of avoiding all questions, ultimately resolved to tender the vessel to the pursuers whenever she was ready for sea, and accordingly the pursuers got delivery of her for the purposes of said charter whenever the repairs on her were completed. The defenders were no parties to the charter in question, and were in no way responsible for the disrepair of the ship.”

The pursuers pleaded—“(1) The pursuers having suffered loss and damage to the extent sued for in consequence of the defenders' failure to deliver to them the said steamship ‘Mula,’ in terms of the charter-party and relative agreement founded on, decree should in the circumstances be pronounced against the whole defenders, in terms of the conclusions of the summons as amended, with expenses. (2) The defenders

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Barr, Forrester, and Urquhart having wrongfully taken possession of the vessel, and having unwarrautably refused to deliver her to the pursuers, and the pursuers having thereby suffered loss and damage to the extent concluded for, the said defenders are liable in damages therefor. (3) The defenders Seater and Ramage & Ferguson having purchased the said vessel subject to the pursuers' rights, and having refused to deliver her to the pursuers for fulfilment of the said charter-party, are liable in damages for the loss which the pursuers have thereby sustained.”

The defenders (other than Messrs William Hunter & Company and William Hunter, who did not appear in the action) pleaded—“(1) The pursuers' statements are irrelevant. (5) The pursuers having got delivery of the vessel from the defenders whenever she was ready for sea, the defenders are not liable for any loss or damage the pursuers may have suffered.”

A proof was led upon 22nd May 1888, from which, and from the correspondence produced thereat, it appeared that after the agreement of 15th April 1888 Messrs Laming & Company immediately chartered the “Mula” with a Mr Dasnieres for a cargo of pitch to Port de Bouc, near Marseilles. Mr Dasnieres could still have taken the vessel up to the end of June, but eventually he could wait no longer and chartered another steamer called the “Greta,” put his cargo of pitch into it, and recovered from Messrs Laming & Company £124, 5s. as damages, and £13, 11s. 3d, as costs because of increase of freight.

On 12th May 1887 pursuers wrote to Messrs Hunter & Company:—“The London merchant with whom we have fixed the ‘Mula’ outwards is now clamouring for her delivery, and writes holding us responsible for all losses and damages, &c., and we in our turn must therefore hold you responsible for all consequences that may arise through your failure to deliver the steamer as arranged. We consider we shall have a claim against your mortgagees, failing you, as they are cognisant of our charter and are bound to deliver her.”

On 14th May 1887 they wrote to Barr:—“We understand from a letter from Mr Murray to our brokers that you have now entered into possession of the ‘Mula,’ and that you have no intention of carrying out the engagements of the steamer in accordance with the terms of the charter dated 9th October last, and the endorsement on same dated 15th April last. We shall be glad to know whether this information is correct, and whether you really intend not to carry out the charter of which you were cognisant. If such should be your intention, we must hold you responsible for all consequences for breach of charter-party, we having entered into engagements for the steamer, and being ourselves already threatened with damages.” To which Barr's agents on 17th May replied:—“It is not correct to say that our clients have no intention of carrying out the arrangements of the ship in accordance with the terms of the charter. On the contrary, they have every intention of respecting your rights, and the sale will be carried out expressly under burden of the charter.”

On 27th June the pursuers telegraphed to Seater:—“Charterers of ‘Mula,’ Dasnieres, pitch merchant, just given us notice we must tender ‘Mula’ at once or he will charter steamer ‘Greta’ at four shillings increased freight and claim difference, namely £160. Says must decide immediately. Telegraph you will deliver ‘Mula,’ and when.”

On same date Seater's agents replied by letter:— “Our client is not in a position to take up the charter to which you refer, and the parties to whom you allude in your telegram must just take their own course.” And also on same date pursuers' agents wrote to the agents of Seater, who were also the agents of Messrs Ramage & Ferguson:—“We have yours of Saturday. Since the sale we have since seen a print of the conditions. We applied for the conditions before the sale, but Messrs Mitchells, Cowan, & Johnston, whose names appeared in the advertisement, had not then got a copy. The eighth clause of the articles does not in our opinion touch the charter-party. It declares the ship to be free of all bonds, liens, rights of retention, and other incumbrances, but a charter-party is not an incumbrance, it is a contract of hire. We are not in error in supposing that the charter-party was referred to in the advertisement of the ship. We cut out the advertisement from the Glasgow Herald and sent it to our clients, who relied on the charter-party being carried out. We think the memorandum endorsed on the charter-party is easily understood. It contains not a proposed new arrangement but a completed contract of hire. Our clients in the face of your clients' refusal to implement the charter-party will now proceed with an action, and if need be will apply for reduction of the title to the ship.”

The Board of Trade's restriction upon the “Mula's” sailing was removed upon 23rd April, but S. Jones, a witness for the pursuers, who was on board from May 1886 until August 1887, said—“At the time we were stopped we could have gone to sea, but there was one little defect in the pumps which we found out on starting the engines a second time, which it would have been necessary to put right. The vessel could have gone to sea, but it would have been judicious to have made the necessary alterations first.” The valuator, who reported to the Court on 1st June 1887, said the ship was at that date apparently ready for sea.

Mr Ramage (of Messrs Ramage & Ferguson), a witness for the defence, said his firm had from the first asserted their right of lien over the ship, which was all along in their possession, and moved about subject to their orders. He also stated that the ship was not fit to go to sea until August, when she was given up to the pursuers.

Upon 20th April 1887 Barr telegraphed to Ramage & Ferguson—“Referring to interview yesterday as stamped policies not forthcoming, consulted Mitchells, Cowan, & Johnston (Barr's agents in Glasgow), who are making arrangements protect joint interests.” And upon same date Ramage & Ferguson's agents wrote to Barr's agents—“With reference to our interview with Mr Kelly, we have just ascertained that this vessel is so situated that she cannot sail for a considerable time to come, and Ramage & Ferguson will do all in their power to prevent her getting away until the terms of the minute of agrement have been fulfilled. In these circumstances it appears to us to be scarcely necessary to resort to interdict.”

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Upon 27th April 1887 Hunter & Company wrote to Ramage & Ferguson—“The position of matters is this — the mortgagees demand that I hand over Lloyd's stamped policies to Messrs Mitchells, Cowan, & Johnston at once. I had the steamer covered and had arranged with the brokers as regards payment but the stamped policies could not be delivered immediately. The steamer is now ready for sea, but stopped on that account. I cannot possibly place the policy in the hands of the writers just now.”

Upon 17th May 1887 Barr's agents wrote the agents of Ramage & Ferguson—“Referring to Mr Barr's telegram to you of to-day, we again send you the draft agreement for approval as now altered. As it is of the utmost importance that we should be able to inform the charterers whether the charter is likely to be carried out or not, please wire us on Monday whether you agree to the terms now proposed and that you will not defend the action.” And again on 4th June—“We to-day obtained a warrant to sell, the exposure being fixed for Monday the 20th current. There is therefore very little time to advertise. We enclose herewith, for your approval, proof of the advertisement. You will observe that we have inserted in it that the purchaser is bound to carry out the charter. We understand your clients are strongly averse to the vessel being exposed subject to such a burden. We enclose copy of a letter we have from our Glasgow correspondents, from which you will see that their clients are willing that the exposure should take place free of the charter providing your clients undertake all responsibility of satisfying the charterer's claims. If you will write us on Monday, giving our clients such an undertaking, we shall delete from the advertisement all reference to the charter.” To which the following reply was sent:—“Our clients quite understand that they have to settle the matter with Laming under their arrangement with Messrs Barr and Forrester, and in these circumstances we have deleted the reference in the advertisement to Laming & Co.’s charter.”

Upon 17th July 1888 the Lord Ordinary ( M'Laren.) pronounced the following interlocutor:—“Finds that the mortgagees, Barr and others, when they entered into possession of the ship ‘Mula’ were not entitled to disaffirm the contract of affreightment into which the owners had entered while they were, with the mortgagees' consent, retaining the possession of the ship, such contract being of a usual and reasonable description: Finds also that the said mortgagees were entitled to insist on the fulfilment of conditions necessary for their protection, and in particular that they were entitled to prevent the ‘Mula’ from sailing until a policy of marine insurance had been effected available for their protection against sea risks: Finds that the owners were not able to effect such an insurance and that the detention of the ship by the mortgagees was justifiable: Finds further, that the defenders Ramage & Ferguson were entitled to detain the said ship under their right of lien until their account for repairs should be paid or satisfied: Therefore assoilzies all the defenders who are parties to the closed record from the conclusions of the action, and decerns: Finds these defenders entitled to expenses, &c.

Opinion.—In this case the pursuers, the hirers, under a charter-party of the steamship ‘Mula,’ sue for damages for breach of charter-party, in respect that the vessel was not delivered to them as stipulated. The parties immediately interested as defenders are (1) Barr and others, mortgagees, and (2) Ramage & Ferguson, claiming on the customary shipbuilders' lien for repairs, by whose acts it is alleged the vessel was prevented from sailing. The question is as to the nature and limitations of the rights of a mortgagee and holder of a lien against a charterer or hirer. These are to be considered separately.

1st. As to the right of a mortgagee. This is to be determined with reference to the quality of the subject of the mortgage. It is not the same as that of a pledgee of ordinary corporeal moveables, because actual possession is not necessary to the efficacy of the mortgage of a ship. The mortgagee has civil possession of a qualified kind by the registration of his mortgage, and if it be necessary that he should enter into actual possession to secure his rights, he must use his rights with a due regard to the interests of the owners. Neither is the right of a mortgagee in all respects the same as that of a heritable creditor. The latter on entering into possession may by known methods secure that the rents shall be payable to himself, and he has no power to interfere with the tenant's right under an existing lease. But the mortgagee of a ship holds a security over a floating subject which in the very act of use is liable to be withdrawn from the jurisdiction of the Courts of the country in which the right of mortgagee is constituted, and which also in the act of use is exposed to the perils of the sea.

My general view of the mortgagee's rights may be stated under two heads—(1) As to the right of the mortgagee in a question with the owner—supposing he does not desire to bring the ship to sale, the mortgagee, if he finds the ship in a British port, may at once enter into actual possession, ousting the owner from the management. He may dismiss the master, and appoint another responsible to himself, or he may reengage the master, making the master responsible to himself, and may thus acquire all the asssurance which is possible in the nature of the case, that the ship will be returned to him on the completion of her voyage. (2) As to the mortgagee's rights in a question with the charterer or hirer of the ship, it is evident that if the mortgagee does not enter into possession at the time of making the advance, he does, as a matter of fact, assent to the owner exercising all ordinary powers for the joint benefit of owner and mortgagee. Accordingly if the owner enters into a reasonable charter-party for the purpose of enabling the ship to earn freight this must be held to be done with the mortgagee's consent. One of the conditions of a reasonable charter-party is that the ship shall be insured against sea risks for the voyage by one of the parties to the contract, usually by the owner. From the point of view of the mortgagees' interest it is not enough that there shall be an agreement to insure. A suitable insurance must be effected, failing which the mortgagee is, as I conceive, entitled to prevent the ship from sailing. He is also entitled to prevent the ship from putting to sea in an unseaworthy condition. Generalising, the mortgagee must recognise existing contracts of affreightment

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subject to this, that he can insist on the preliminary fulfilment of all conditions which are necessary for the safety of the subject and for his own indemnification against sea risks. He is not bound to advance money for such purposes.

According to these conditions, the case against Messrs Barr and others will in my judgment entirely fail, and that for two reasons—(1) The mortgagees were not in possession at the date of the original charter-party, but possession was finally taken on 22nd April, and the agreement was renewed on 27th May; (2) the ship was not in seaworthy condition at the time when the voyage ought to have commenced. She was in the hands of Messrs Ramage & Ferguson for repair, and the work of repairing had proceeded slowly because instalments of the cost were not forthcoming. Eventually certain of the mortgagees advanced a sum towards the completion of the repairs. They were not bound to do so, and if they had not made the advance the ‘Mula’ would probably have remained in the shipwrights' hands subject to their lien for repairs until she came to be sold under judicial authority in the action of sale referred to on record. When the ‘Mula’ was eventually got ready for a voyage the owners were not in a position to satisfy the mortgagees that the ship was covered by insurances. The owners had instructed their brokers to insure her, but the brokers would only insure subject to their own lien for a balance due to them on past transactions. Consequently any insurance that might be effected in this way would be valueless to the mortgagees as an indemnity to them against the loss of the ship. They accordingly took up the position that they would not allow the ‘Mula’ to proceed to sea until policies were delivered or assigned to them to the extent of their debt. This could not be done, and my opinion is that Barr and others were within their rights when they refused to allow the ‘Mula’ to commence her voyage.

The case of Messrs Ramage & Ferguson is stronger. I consider that they had a lien for their repairs which was not lost by the ship going out of their yard to a pier or harbour where the work of repairing was continued, but which would have been lost if the ship had commenced her voyage. Their right then was to detain the ship until their account should be paid or provided for.

It is true that through the exercise of the rights of the mortgagees and the builders the pursuers have lost money. But this is through the fault of the owners, and does not, as the case presents itself to me, render the parties who are responsible for the detention of the ship responsible in damages.

It follows from this opinion that the defenders Barr and others, and the defenders Ramage & Ferguson, are entitled to be assoilzied from the action. If a different view were taken I think that damage has been proved (approximately) to the extent claimed in the proof.”

The pursuers reclaimed.

They asked to be allowed to amend their summons under the provisions of the Court of Session Act 1868, sec. 29, which provides that “The Court … may at any time amend any error or defect in the record … in any action … in the Court of Session; … and all such amendments as may be necessary for the purpose of determining in the existing action … the real question in controversy between the parties shall be made: Provided always, that it shall not be competent by amendment of the record … under this Act, to subject to the adjudication of the Court any larger sum or any other fund or property than such as are specified in the summons or other original pleading, unless all the parties interested shall consent to such amendment”… They proposed to substitute for the words “or alternatively, in the event of the defender John White Seater failing so to deliver to the pursuers the said steamship or vessel, and coals therein,” the words “and in any event,” so as to raise clearly their claim of damages for loss sustained before the raising of the action.

Argued for the reclaimers upon the proposed amendment—They were within the provisions of the section of the Act allowing amendments, as they were not altering “the real question in controversy.” The best proof of this was that no alterations required to be made on the condescendence, and the whole evidence led related to loss sustained before the summons was signeted. They only desired to bring out more clearly what both parties intended.

Upon the merits—(1) As to lien—Ramage & Ferguson had no right of lien. The ship was never in any private dock of theirs, but in the open roadstead, and in such cases possession so as to found a lien was not presumed, but must be proved to have been given— Cooper, &c. v. Barr & Shearer, June 6, 1873, 11 Macph. 651, reversed, but the general principles laid down in Court of Session recognised February 26, 1875, 2 R. (H. of L.) 14. Even if they had a lien, it was renounced by the agreement of February 1887, under which they got a second mortgage. (2) As to mortgagees—The mortgagees were bound to respect the rights of the charterers, especially as there were no mortgagees in possession at the date of the renewal of the charter-party 15th April 1887, and the charter-party was not of an unusual description. The mortgagees had no right to cut off the ship from earning freight even while subject to their mortgages. The obligation undertaken by owner in February 1887 to insure was in favour of the mortgagees. The question of insurance did not affect the right of the charterers. It was not proved the Ship was unseaworthy at the end of April. If it was, why were the mortgagees in such a hurry to stop its sailing by interdict? The correspondence showed that Ramage & Ferguson did their best to stop the ship's sailing. The other mortgagees were willing to let her go, and yet they were under an obligation to have her fit for sea within a month from February 1887. One of the partners of the firm admitted nothing was done to her between April and July, and in these circumstances it was not for them to plead unseaworthiness as a reason for not letting her go. The reclaimers had had a further action of damages raised against them for breach of contract with Dasnieres, and altogether, as the Lord Ordinary had found, the sum claimed in name of damages was not excessive— Collins v. Lamport, December 1864, 34 L.J. Chan. Div. 196 (Lord Chancellor Westbury); “ The Maxima,” June 18,

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1878, 39 L.J. 112; “ The Fanchon,” April 21, 1880, L.R., 5 Prob. Div. 173; Cory & Company v. Stewart, April 7, 1886, Times' L.R., vol. 2, 508; “ The Innisfallen,” June 15, 1866, L.R., 1 Ad. and Eccle. 72; Keith v. Burrows, July 1877, L. R., 2 Ap. Ca. 636.

Argued for the respondents upon the proposed amendment—The amendment was incompetent. The summons as raised was to recover damages sustained after 4th July. By the very words of the summons it was implied that if delivery of the ship had been made upon 4th July there would have been no room for an action of damages. The proposed amendment violated both the conditions laid down in the 29th section of the Act, because it proposed “to subject to the adjudication of the Court” a “larger sum,” and also an “other fund than such as are specified in the summons.” Unless the proposed amendment of the record was allowed the reclaimers had no case. The ship had been delivered to them, and all the damages, if any, had been sustained before the raising of the action. Even if the amendment were allowed they had no claim against the respondents, who had acted within their legal rights. There was no privity of contract between them and the respondents. Their right of action, if any, was against the owner. The owner could not have obtained delivery, and the charterers had certainly no higher rights. The rule to be derived from the cases cited by the reclaimers was that mortgagees were not bound to respect any charter-party if by doing so their reasonable rights under their mortgages would be materially prejudiced. They would have been so prejudiced if the ship had been allowed to sail, as she was unseaworthy until August 1887, and uninsured. By getting the ship sold under the orders of Court the mortgagees had simply made their rights effectual in the only way recognised by law. Even if they had not entered into possession the ship would not have been allowed to sail, as there were other creditors who would have prevented her going.

At advising—