Johnson and Anor v. Royal Mail Steam Packet Company

(1867) L.R. 3 C.P. 38

(Judgment by: Willes J, Byles J, Keating J)

Between: Johnson and Anor
And: Royal Mail Steam Packet Company

Court of Common Pleas

Willes J

Byles J

Keating J

Subject References:
Delivery of Goods
Maritime Lien
Money paid
Privity of Contract
Compulsory Payment of the Debt of Another

Judgment date: 25 November 1867

Judgment by:
Willes J

Byles J

Keating J

A. being the owner of a steamship mortgaged it to B., and subsequently, under circumstances held to shew acquiescence by B., entered into an agreement in contemplation of a partnership with C., by the terms of which C. was to work the ship for A. till further notice, paying all the expenses and receiving all the profits, A. agreeing to indemnify him against loss, if any, upon a periodical statement of accounts. Subsequently to this agreement B. gave notice to C. of the mortgage, and required possession of the ship. The ship was being employed in voyages at a distance from England, between S. and T., and was at that time at S., under engagements which had been entered into by C. with third parties, with respect to its next voyage to T. The ship was given up to B.'s agent at T. at the termination of its next voyage thither. At the time of such delivery C. owed to the crew of the ship a large sum for wages, which entitled them to proceed against the ship in the Admiralty Court; and shortly after the delivery of the ship the crew took such proceedings, and the ship was seized by the officers of the Court. B., after suffering much delay and loss, paid the wages and obtained possession of the ship. In an action of trover for the ship, and for money paid, brought by B. against C.:-

Held, that C. was entitled to retain possession of the ship till its arrival at T., in order to fulfil the engagements incurred before notice.

Held, also, that as there had been a delivery of the ship at T., notwithstanding it was subject to a maritime lien for wages, A. was not entitled to recover on the count for trover.

Held, also, that B. was entitled to recover the wages from C. under the count for money paid.

DECLARATION in trover for two ships and for money paid. Pleas: Not guilty, and never indebted. There were other pleadings, which gave rise only to questions of fact.

The action was tried before Erle, C.J., at the sittings in London after Michaelmas Term, 1864, and was then turned into a special case, and the facts therein stated, as far as related to the present questions, were as follows:- The European and Australian Royal Mail Company, Limited, were the owners of two steam-vessels, which they mortgaged in November, 1857, to the plaintiffs. In the month of April, 1858, the European and Australian Royal Mail Company, under circumstances held to shew acquiescence by the mortgagees, entered into an agreement with the defendants, under the terms of which the defendants were to work the steamers, with a view to amalgamation, until further notice, paying all expenses, and receiving all the profits, the European and Australian Royal Mail Company indemnifying them for the loss they might sustain thereby, if any, upon a periodical statement of accounts.

The defendants at that time had no notice of the mortgage. In the beginning of July, 1858, the plaintiffs gave the defendants notice of their mortgage, and required them to deliver up the vessels to their agent at Sydney. The vessels were then running between Suez and Sydney, and were at that time at Suez preparing to start for Sydney, and the defendants had, at that time, entered into engagements with third parties for the coming voyages, so that they had as interest in using them which would have entitled them to do so, in spite of any notice which they might have received from the European and Australian Royal Mail Company, terminating the agreement. In accordance with the notice from the plaintiffs, the defendants delivered up the vessels to their agent at Sydney on their arrival there; but at the time of such delivery a sum of more than 5000l. was due from the defendants to the officers and crews of the vessels for their wages, for which the latter were entitled to a maritime lien upon the vessel.

The officers and crews took proceedings in the Vice Admiralty Court at Sydney, and shortly after the vessels had been delivered up to the plaintiffs they were seized by the officers of that Court, and a difficulty arising with respect to the payment of the money, partly owing to the want of a properly authorized agent of the plaintiffs there, they were detained some months. Ultimately the plaintiffs paid the sum claimed and obtained possession of the ships, which were then sold, but realized less than the amount for which they were mortgaged.

The plaintiffs claimed a sum for the use and occupation of the ships from the time of notice till the delivery up of the ships at Sydney; the repayment of the wages which had been paid by the plaintiffs; and damages for the detention of the ship, on the ground that the delivery of the ship, subject to the lien for wages, was not a sufficient delivery of it in law.

Nov. 18. Horace Lloyd (Maude with him), for the plaintiffs. From the time of the notice given by the plaintiffs to the defendants in July, 1858, the ships were really their property, and though the use of them by the defendants was not wrongful, it having been clearly the intention of both parties that the vessels should be given up at Sydney, they are entitled to compensation for their use by the defendants during the intervening time. The defendants did not really deliver up the vessels to the plaintiffs on their arrival at Sydney, as it is admitted they were bound to do, for they were bound to give the plaintiffs the complete control over them, and as long as they were subject to a maritime lien which rendered them liable to seizure, the plaintiffs had not such control.

They are, at any rate, entitled to be repaid the wages, which were a debt which had been incurred by the defendants, who had received the freight and other profits which had been earned by the services of the crew. The defendants were bound to give the vessels up to the plaintiffs free from all such charges, and they not having done so, the plaintiffs were compelled to pay the amount to obtain possession of the vessels, and are therefore entitled to recover it from them.

Mellish, Q.C. (Bushby with him), for the defendants. The plaintiffs have no claim to any payment for the use of the ships till their arrival at Sydney. A mortgagee is not entitled to the profits of the property mortgaged until he enters into possession of it, and it is admitted that both parties intended that possession of the ships should be taken by the plaintiffs at Sydney, and not before. The question whether the delivery at Sydney was a sufficient delivery of possession is exceptional, for actual possession of the ships was, it is admitted, given to the defendants, which in itself would be inconsistent with the existence of any other than a maritime lien. If the ships had been seized by the Admiralty Court before being given up to the plaintiffs, the case might have been different, as it might then have been said that the plaintiffs never had possession of them; but, in fact, they had complete possession of them till the seizure, and that might not have taken place till long after, and yet the principle of the case would have been the same. It is admitted that it is a question of tort, and not of contract. And what is the tort complained of? The incurring the debt for wages was not a tort, and the defendants have not converted the ship to their own use, or in any way kept the plaintiffs out of possession of it, or hindered them in the enjoyment of it. The seizure of the ships was in no sense the act of the defendants.

The plaintiffs are not entitled either to recover under the count for money paid the wages which they have paid, for there is no privity of contract between them and the defendants. The mortgagee has, no doubt, a right to have the property given up to him free of all charges, but that is a right as against the mortgagor, and the plaintiffs can recover this sum from the European and Australian Royal Mail Company. The money, therefore, was paid to their use, and cannot have been paid to the use of the defendants also. It is not denied that the defendants would be liable for this amount to the European and Australian Royal Mail Company, against whom, however, they have a set-off of far larger amount, and this has been, in fact, already decided in the previous case of European and Australian Royal Mail Company, Limited, v. Royal Mail Steam Packet Company; [F1] but that is itself a proof that they are not also liable to the present plaintiffs, or else the defendants may have to pay the same debt twice.

Horace Lloyd, in reply. When it is said that the plaintiffs had possession of the ships, it is giving a special meaning to the word "possession." They had only a possession subject to the rights of third parties, which could be at any time enforced. It is admitted that there would have been no delivery, if at the time when the defendants gave up the vessel the officer of the court had been actually in possession, and he was potentially in possession, and there cannot be any real difference between the two.

Cur. adv. vult.

Nov. 25. The judgment of the Court (Willes, Byles, and Keating, JJ.) was delivered by WILLES, J., who, after stating the facts, and that as they were the same with respect to the two vessels he need speak only of one, and after giving judgment on the other questions in the case, proceeded:- It is necessary now to consider what rights the mortgagees have established themselves to possess by reason of their ownership or quasi ownership of the vessel.

In our opinion, the mortgagees were equally bound with the mortgagors in respect of the engagements that had been entered into between the mortgagors and the Royal Mail Company before they interposed. Without entering into the question of mortgages of land further than to say that we have given it our consideration - the case of a mortgagee and mortgagor of a ship appears to be one of quite a different complexion, because the mortgagee, so long as he does not interfere and claim the possession, may fairly be taken to have allowed the mortgagor to enter into all engagements for the employment of the ship of the sort usually entered into by a person who has the apparent control and ownership of a vessel. Looking at the circumstances of this case, we think that the notice of July, claiming a delivery of the vessel at Sydney, sufficiently expresses the rights which the plaintiffs had against the vessel and the defendants, and that the right to treat the defendants as wrongdoers for continuing the use of the vessel after the receipt of the notice was no larger than that of the mortgagors would have been.

With respect to the contract which it was suggested might have been implied between the plaintiffs and defendants, from the fact that on the receipt of the notice the defendants might have stopped the vessel at Suez, but did not do so, but used her for the voyage from Suez to Sydney, it follows, obviously, from what we have said, that if any contract could be implied, it could only be a contract to deliver up the vessel after using her to the extent and in the manner provided for by the agreement between the European and Australian Mail Company and the defendants. Such a contract would be in accordance with the view we take of the relation of the mortgagees and the Royal Mail Company as to another item. I may add, however, that it is not essential to the judgment which we have to pronounce on the other parts of the claim.

I will proceed to consider the claims in respect of the subsequent payments made by the plaintiffs, and the expenses incurred by reason of their having had to make those payments.

The Royal Mail Company, we must take it, received, as they had a right to receive under the agreement, the earnings of the voyage, or, perhaps, to speak more accurately, they received what was paid in respect of freight upon the voyage from government, from passengers, and in respect of cargo; whether the voyage was favourable or not, in a pecuniary point of view, is immaterial, and although freight cannot be said now, in so strict a sense as formerly, to be the mother of wages, yet it would follow, as a matter of business, according to ordinary practice, that they ought thereout to have discharged the wages of the crew of the vessel.

Those wages were incurred during the period of their possession and control, and the crew were employed by them. Theirs were the hands which received what was paid for freight, and theirs were the hands which ought to have paid the men by whose labour that freight was earned. Moreover, it was expressly provided by the agreement between the European and Australian Mail Company and the defendants that the latter should pay the working expenses in the first instance. Wages, of course, ought to be paid speedily, and in respect of that obvious piece of justice a remedy is given, whereby the seamen are authorized to have the vessel detained by the process of the Admiralty in order to satisfy their claims. Now, these wages were left unpaid, the vessel was seized in the Admiralty Court, the money was not ready on the spot, various causes, partly resting with the plaintiffs, led to very great delay, but in the result the mortgagees did pay the wages, and the vessel was released, and this gives rise to the second claim.

Now the mortgagees having had to pay sums of money for which the Royal Mail Company were liable in the first instance, which they ought, according to Maritime usage, and by their contract with the European and Australian Company, to have forthwith paid; what answer is set up by the Royal Mail Company against reimbursing the mortgagees who have paid their debt? Of course there is, upon the surface, that by the law of this country, differing, it is said, in that respect from the civil law, nobody can make himself the creditor of another by paying that other's debt against his will or without his consent; that is expressed by the common formula of the count for money paid for the defendant's use, at his request. That is the general rule, undoubtedly, but it is subject to this modification, that money paid to discharge the debt of another cannot be recovered unless it was paid at his request, or under compulsion, or in respect of a liability imposed upon that other. This is the modification of the rule relied upon by the plaintiff, and the question is, within which branch of the rule the present case falls?

It was argued on the part of the defendants that the non-payment of the wages was a breach of contract only, and it was said the European and Australian Company may recover, because they have an agreement with the Royal Mail Company by which they have stipulated that the latter should pay those wages, so let them sue. They have, moreover, sued, and this Court has held that the action was maintainable, and it was held, if one may use such an expression, in terrorem over the Court, that if we decided that the mortgagees should recover in this action for the wages that they paid, the European and Australian Company may also recover in their action, and so that the same sum of money would be recovered by two different persons against the same defendants in respect of the same matter, which would be absurd. That difficulty, however, is not a practical one, because if the defendants pay the plaintiffs the European and Australian Company could only recover nominal damages in respect of the breach of that contract; they did not pay the wages in question; those were paid by the mortgagees, paid out of their moneys, and not out of the moneys of the European and Australian Company. It would be, therefore, a matter of nominal damages, simply founded upon the breach of contract, and by reason of the technical rule that any breach of contract, although not the cause of any damage, gives rise to a claim for nominal damages.

But then it is said if you get rid of that, how do you dispose of the objection that there is no contract between the mortgagees and the Royal Mail Company? The answer was this, on the part of the plaintiffs, that the contract is not set up by them as mortgagees to enforce any claim thereupon, the contract is set up by the defendants, the Royal Mail Company, for the purpose of justifying their detention of the vessel as against the mortgagees; and if they can justify the sailing of the vessel from Suez to Sydney, as against the mortgagees, by reason of their having a bailment which gave them an interest, and in respect of that interest and their being entitled to sail her upon that voyage, it seems that it would be blowing hot and cold that they should be allowed to give up the vessel upon other terms than those of the contract which has justified the course which they have taken. Moreover, the compulsion of law which entitles a person, paying the debt of another, to recover against that other as for money paid, is not such a compulsion of law as would avoid a contract, like imprisonment.

It has been decided in numerous cases that restraint of goods by reason of the non-payment of the debt due by one to another is sufficient compulsion of the law to entitle a person who has paid the debt in order to relieve his goods from such restraint to sustain a claim for money paid. This is a case which we have been compelled to consider very much upon its own circumstances, which are very peculiar, and may be difficult to be made a precedent, perhaps, in any future case. Perhaps the nearest case that could be put by way of illustration would be this. A. lends B. his horse for a limited period, which would imply that he must pay the expense of the horse's keep during the time he retains it. B. goes to an inn and runs up a bill, which he does not pay, and the innkeeper detains the horse. In the meantime A. has sold the horse out-and-out for its full price to C., and C. is informed that the horse is at the inn, he proceeds there to take him away, but is told he cannot take him until he pays the bill, and he pays the bill accordingly and gets his horse; can C., who in order to get his horse is obliged to pay the debt of another, sue that other in an action for money paid?

We are clearly of opinion that he could; and without heaping up authorities where it has been held, independent of contract, that a person occupying a property in respect of which there is a claim that ought to have been discharged by another, being compelled to pay, is entitled to reimbursement, we think that this is a case in which the mortgagees, by compulsion of law, have paid a debt for which the Royal Mail Company were liable, a ready money debt which they ought to have provided for on the arrival of the vessel at Sydney, and that, therefore, in respect to the claim for wages the plaintiffs are entitled to recover as on the count for money paid.

There is another claim with which we have to deal, but it is unnecessary to say more with respect to that than that it is claimed in the declaration as consequential damage resulting from an alleged wrong, an alleged conversion or detention of the vessel of the plaintiffs. We agree in the arguments used by Mr. Mellish, that there was no such conversion or detention.

When the vessel was taken possession of by the plaintiffs' agent at Sydney she was entirely out of the control of the Royal Mail Steam Packet Company, and what subsequently happened by reason of the proceedings in the Admiralty Court was the act of the law. It is true it was the act of the law, traceable to a default of the defendants in not paying the debt which they ought to have discharged, but we are unable to perceive how it can be traced to any wrongful act of conversion or detention. It is a fallacy to say that an action for conversion or detention implies merely that the defendant has not delivered up to the plaintiff the chattel in respect of which it is brought. It implies that the defendant has done something, in either using the chattel for his own purpose, or at least, detaining it from the plaintiff; and in this case, the vessel having been once given up and abandoned, or more properly quitted possession of, by the Royal Mail Company, and taken possession of by the plaintiffs, we think the defendants cannot be charged in an action for detention or conversion simply by reason of their default in payment of wages, in respect of which there was no lien in the sense of property, but only liability to a subsequent process of law by which the vessel was seized.

Whether that state of things presents a legal liability which might have been enforced by special action framed to meet the case, it is unnecessary we should decide. Such an action would unquestionably have been novel, and, we are inclined to think, could not have been maintained. We think, in this case, we ought not to go out of our way to add to the proceedings a claim which must be treated as, at best, speculative; especially as under the circumstances the damage, or the greater part of it, in our view of the facts, probably arose from the want of a properly authorized and accredited agent of the mortgagees at Sydney to advance money, or raise it if necessary upon the vessel. As to this claim, therefore, we must give judgment for the defendants.

Judgment for the defendants as to the first and third claims, and for the plaintiffs as to the second claim.

Attorneys for plaintiffs: Uptons, Johnson, & Upton.
Attorneys for defendants: Maynard, Son, & Co.

30 L. J. (C.P.) 247.