Scottish Court of Session Decisions

This was an action at the instance of Henckell Du Buisson & Company, merchants, London, against William Swan & Company, shipbuilders, Glasgow, for £2500, the alleged loss sustained by the pursuers by the defenders' failure to deliver a steamship at St Lucia.

In April 1888 it was agreed between the parties that the defenders should build and deliver at St Lucia a small steamer or steam-launch for the “St Lucia Steam Conveyance Company (Limited)” for the sum of £1865, the last instalment to be paid when the ship was completed, the builders to cover insurance to St Lucia. The price, including extras, was subsequently increased to £1899, 2s. 6d., and was paid to the defenders by the Steam Conveyance Company when the vessel was completed. At the purchasers' request the defenders insured the vessel for £2500 in the pursuers' name, and the policy was delivered to them. By arrangement the builders' certificate was returned to Mr Chastanet, the managing director of the St Lucia Company, and the vessel was registered in his name. The defenders, when the vessel was ready for the voyage, entered into a contract with Peter Jacobs, a shipmaster, to navigate the vessel to St Lucia, and they put on board a cargo of coals as ballast, which they intended to sell for their own behalf at St Lucia. The vessel was lost on the voyage out, in Belfast Lough.

The pursuers averred that the wreck of the vessel was due to the fault of those for whom the defenders were responsible, and they estimated their loss at the sum sued for, including the repayment of the price with interest.

The defenders averred that in September 1888 the vessel was transferred from them to the St Lucia Company, and denied that the loss of the vessel was due to fault.

The pursuers pleaded—“(1) The pursuers are entitled to decree as craved, in respect (a) the defenders were under contract to deliver said launch ‘Victoria'at St Lucia; (b) the loss of said launch is due to the fault of those for whom the defenders are responsible.”

Thedefenders pleaded—“(3) The defenders having transferred the property in the vessel, and received payment of the price, have implemented their contract with pursuers, and should now be assoilzied and entitled to costs. (4) The loss of the vessel not being attributable to fault on the part of defenders, or those for whom they are responsible, the defenders should be assoilzied and found entitled to costs.”

On 23rd March 1889 the Sheriff-Substitute ( Murray) (after various findings in fact) found—“(1) That in the circumstances, as shown by the documents in process and admissions on record, the defenders' liability to deliver subsisted until delivery of the vessel should be made at St Lucia, and was not altered or taken away by subsequent communications as to the registration, insurance, &c.: (2) That therefore primo loco the defenders are bound to repay to the owners of the vessel the £1899, 2s. 6d. received by them in payment of the price of said vessel: (3) That defenders are entitled to demand, before decree for the £1899, 2s. 6d. or any further sum be granted, that the pursuers shall complete their title, the said sum being repayable to the owners under the defenders' obligation to deliver to the owners, and Mr Chastanet having been of consent of parties constituted the registered owner: (4) That quoad ultra a proof will be necessary as to any additional damage said by pursuers to have been sustained by them: (5) that the pursuers will be bound to give every facility to the defenders to enable them to raise the question as to the insurance with the underwriters: Therefore allows pursuers a proof of any damage sustained by them over and above the £1899, 2s. 6d., and to the defenders a conjunct probation, &c.

““ Note.—The defenders contend that the delivery at St Lucia was ab initio merely a form affecting the insurance, and not a reality. This was clearly not the case, as is shown by the facts that all the arrangements for her voyage out were to be made and paid for by the defenders, and that defenders carried out a ballast cargo of coals, which they proposed to sell at St Lucia for their own profit. Further, the defenders contend that there was subsequent novation and alteration by which the ship was taken over from the defenders and responsibility removed from them. The correspondence, however, shows that the arrangement

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about registration was no novelty, but was in conformity with the original agreement. Chastanet's name was inserted as owner for convenience' sake, though both parties knew that he was not really the sole owner of the ship. As to the insurances, the taking of the insurance in pursuers' name was by arrangement as a sort of security. No doubt the question as to the additional £500 is more difficult, as the policy may be held to have been to that extent a policy by pursuers on behalf of the owners, and not on behalf of defenders; but as to the main body of the policy, it was an insurance for defenders, though put in the name of pursuers, to enable defenders in case of loss to repay the money they had received. It may be doubtful whether, as regards anything further, it may not be held that pursuers, on behalf of the owners, in fixing the amount of the insurance that defenders were to pay for at £2000, did not thereby fix the maximum of the amount of the damages that they might be entitled to from them in case of non-delivery.”

On appeal the Sheriff ( Berry) on 2nd July 1889 found the defenders liable to the pursuers in the sum of £1899, 2s. 6d., and decerned for this amount, and quoad ultra he adhered to the Sheriflf-Substitute's interlocutor.

Note.—I am of opinion, with the Sheriff-Substitute, that until delivery of the vessel at St Lucia the risk remained with the defenders, and consequently that they are bound to repay to the owners of the vessel the sum of £1899, 2s. 6d., which was paid to them. To any damage beyond that sum the pursuers must establish their right by proof.

As regards the sum of £1899, 2s. 6d., the pursuers ask for interim decree, and I think they are entitled to it.

I understand that any difficulty that might have arisen in regard to the ownership of the vessel has been got over by arrangement between the parties.”

The defenders appealed to the Court of Session, and argued—That the mere mention of a place of delivery did not finally determine upon whom the loss was to fall in the event of the vessel being lost before it reached its destination. When the vessel was registered in the name of the company's managing director there was a transfer from the defenders to the company, and the risk passed to the purchasers— Steam Navigation Company, 32 L.J., Q.B. 322— aff. 30 L.J., Q.B. 214; Blackburn on Sale, 235–236; Ersk. iii. 3,7; Dunlop v. Lambert, June 30, 1837, 15 S. 1232— aff. M'Lean & Robinson, 653'; Walker v. Langdale's Chemical Company, July 16, 1873, 11 Macph. 906; Seath v. Moore, March 8, 1886, 13 R. (H. of L.) 57.

Argued for the pursuers—The contract was to build and deliver at St Lucia, and the builders were to pay the whole expense of the voyage. In such a case the law of Scotland was “quite clear; the risk was on the builders — Bell's Prin. sec. 88; Bell's Comm. i. 474. It was not necessary to draw any inferences as to the intention of parties from the policy, because the terms of the contract were perfectly clear and unambiguous— Ireland v. Livingstone, L.R., 5 H. of L. 395–410. The word “deliver” in the contract was used in its ordinary sense, and here there was no delivery at St Lucia, as the vessel never reached her destination.

At advising—