case before James, V.C. the debts due in respect of the policies were allowed in the winding-up. The case before the Master of the Rolls was exactly similar to the present one, and he, after going carefully into the whole case, has decided that as the costs have to be paid he cannot draw any distinction between the different classes of contributories. I cannot say that I dissent from his decision. It is a choice of evils. It is a hardship that a man who has become a contributory only to recover his debt, should, when he has lost it, be made liable for the costs of the winding-up. But it would also be a great hardship to make the official liquidator pay them. I cannot, therefore, come to any other conclusion than that Mr. Lynes is liable, and that this application must fail. The official liquidator must have his costs out of the estate. I cannot give Mr. Lynes any costs.

Co.

Solicitor for the appellant, A. R. Steele. Solicitors for the official liquidator, Lowless and

QUEEN'S BENCH DIVISION. Reported by M. W. MCKELLAR, Esq., Barrister-at-Law.

Friday, May 24, 1878.

SCHUSTER AND OTHERS v. FLETCHER. General average-Expenses of earning freightShipowner's exertions to save cargo-Commission.

The plaintiffs shipped chests of indigo on board the defendant's ship at Calcutta for London, the cargo consisting also of tea, jute, linseed, and other indigo. The ship stranded on the French coast near Boulogne, and the defendant being informed thereof immediately obtained the services of a salvage association, sent out his manager, opened an account in his favour to provide for expenses, and procure pumps, tackle, and appliances for salvage operations; and the whole cargo was thereby saved and brought forward to London, and the freight was earned. An agreement was entered into by the consignees, amongst whom were the plaintiffs, by which they estimated the value of their goods, and agreed to contribute in that proportion to the sacrifices and damages incurred by the defendant, and to the losses of those whose goods could not be identified, according to an average adjustment to be prepared by certain average staters. All the goods identified were given up to the owners, and the rest was sold through a broker who received his brokerage. The average staters allowed the defendant in their statement 25001. as agency, arranging for salvage operations, receiving cargo, meeting and arranging with consignees, receiving and paying proceeds, and generally conducting the business. Held, upon a case stated, that these were expenses incurred by the shipowner in earning his freight, and could not be charged as general average. THE following was the report of a referee in an action under an order made the 20th Dec. 1877:

1. The attention of the parties being called to the terms of the said order, it was agreed that there was no matter in dispute in the action except with reference to the sum of 2500l. hereinafter mentioned, and that the said order was to be taken as an order to report as special referee under sect. 56 of the Supreme Court of Judicature Act 1873.

2, 3, and 4. The plaintiffs are merchants in London; the defendant is sole owner of the ship Victoria Nyanza. In December 1873, the plaintiffs shipped on board that VOL. III., N.S.

[Q.B. Div.

vessel at Calcutta, for delivery at London, under bills of lading, 125 chests of indigo, and the ship sailed for London, having on board a valuable cargo of indigo, tea, jute, and linseed, the indigo being the most valuable portion. On the 4th April 1874, the ship, while prosecuting her voyage, stranded at Etaples, near Boulogne. 5. The defendant was at once informed by telegraph of the disaster, and he forthwith communicated by telegraph with Messrs. G. H. Fletcher and Co., of Liverpool, a firm of which he had formerly been, but was not then, a member.

6. G. H. Fletcher and Co. at once communicated with the Liverpool Salvage Association, and obtained from that association the services of Captain Chisholm and Captain St. Croix, two gentlemen of experience in salvage operations, who on the 5th April started for Etaples.

7. G. H. Fletcher and Co. also on the 6th April sent out their own manager, Mr Bromehead, to the same place, and the defendant sent him a power of attorney to act for him, and opened a credit of 5000l. in his favour at Boulogne to provide for expenses there. The defendant also procured the necessary pumps, tackle, and other appliances to be sent out from England for the purpose of salvage operations.

8. Under the directions of Mr. Bromehead, with the assistance of Captains Chisholm and St. Croix, a part of the cargo was taken out of the ship as she lay stranded (an operation of considerable difficulty) and sent to Boulogne. On the 25th April the ship was got off and towed into Boulogne harbour, whence she ultimately sailed to Liverpool.

9. The whole of the cargo was saved and transhipped at Boulogne, and brought forward by the defendant to London and the freight earned.

10. The first of the cargo reached London about ten days after the stranding, and the whole by the middle of May.

11. On the 25th of April 1874, an average agreement, a copy of which is annexed hereto, was entered into between the defendant and the several consignees of cargo. The several consignees in accordance with that agreement paid sums of money to the defendant, the plaintiffs paying 12121.

12. The cargo as it arrived was landed and warehoused at the London Docks.

13. Some portions of the cargo proved difficult of identification, by reason of the shipping marks having become obliterated. Other parts of the cargo it was impossible to identify. All the goods which were identified were given up to the consignees, under the terms of the average agreement. The goods which were not identified were sold by the defendant by arrangement with the consignees thereof through a broker, whe received his brokerage.

14. The defendant incurred considerable trouble in chartering ships to carry on the cargo from Boulogne to London, and in sending out lighters and necessary appliances to Boulogne, and in the identification of so much of the cargo as was identified, and in the endeavour to identify the residue, and in ascertaining and answering the inquiries of and arranging with the consignees, and in preparing for the sale of and selling the unidentified cargo and distributing the proceeds.

15. Mr. Elmslie, of the firm of Elmslie and Son, the average staters, mentioned in the average agreement hereinbefore mentioned, prepared an average agreement dated the 16th Nov. 1875.

16. In that statement all disbursements by the defendants are included and duly distributed among the several interests, including charges for the services of Captains Chisholm and St. Croix and of the Liverpool Salvage Association, and of Mr. Bromehead, and the accounts paid to the dock company.

17. The statement also includes a charge as follows: "G. H. Fletcher and Co. Agency.-Arranging for salvage operations, receiving cargo, meeting and arranging with consignees, receiving and paying proceeds, and generally conducting the business, 25001. This charge the plaintiffs object to, and seek to recover back their proportion thereof.

18. The sum of 25001. does not represent any sum which the defendant has paid or rendered himselt liable to pay to G. H. Fletcher and Co. It was arrived at and distributed in the following manner: Mr. Elmslie formed the opinion upon all the circumstances of the case that 25001. was a reasonable remuneration to the defendant 2 P

as

as shipowner in respect of his services herein before mentioned, and in respect of his advances for disbursements; and he proceeded to distribute the sum follows: He took thereout a sum amounting to 2 per cent. on the proceeds of the unidentified goods sold, and debited this to cargo in the cargo column. He took thereout further a sum amounting to 24 per cent. upon the total disbursements, and this he debited to the several interests rateably in their respective columns. The balances of the 25007. he debited to general average in the general average column.

19. The effect is that the sum of 2500l. thus distributed was made up of three heads of charge-(1) a commission on the sale of unidentified cargo; (2) a commission on disbursements; (3) a charge by way of remuneration for trouble in respect of the matters mentioned in paragraph 14.

20. There was no contract on the part of the consignees or any of them to pay the defendant the remuneration claimed, or any part thereof under any of the heads above-mentioned, unless such a contract is to be found in the average agreement above-mentioned.

21. No custom was proved entitling a shipowner under such circumstances to any remuneration under any of these heads. But a charge for remuneration by the shipowner in respect of his trouble and labour in such cases has for the last few years been often inserted in average statements, and with increasing frequency. The charge has often been allowed, and sometimes resisted by underwriters.

22. Where unidentified goods have to be sold, and the eale is managed, not by the shipowner himself, but by the shipbroker, or some third person, a commission to such person (in addition to the selling broker's brokerage) is charged and allowed.

23. Where money for disbursements upon salvage of cargo is provided, not by cargo owner or shipowner, but by some third person, commission upon such disbursements is charged and allowed.

24. Where, in case of wreck the shipowner abandons the voyage, and the Salvage Association of London, Liverpool, or elsewhere intervenes and salves the cargo, a sum by way of remuneration under the name of office charges, in addition to disbursements, analogous to the third head of charge in the present case, is always charged by and allowed to the association.

25. With reference to the first head of claim. If the defendant is entitled in point of law to charge a commission on the sale of unidentified goods, the commission of 2 per cent. charged being an ordinary merchant's commission, is not an unreasonable commission to charge.

26. With reference to the second head of charge, the defendant was never out of pocket throughout the transaction herein before mentioned to any large amount, or for any considerable length of time, and unless he was entitled by reason of any general rule to charge a commission on disbursements, there are no special circumstances in the present case making it reasonable to do so in this instance.

27. With reference to the third head of charge, if the defendant is entitled in point of law to any remuneration for his trouble in and about the matters hereinbefore mentioned the sum of 2001. is a reasonable remuneration in respect thereof.

The following was the agreement referred to in paragraph 11.

An agreement made and entered into this 25th April 1874, between George Hamilton Fletcher, of Liverpool, in the county of Lancaster, the owner of the ship Victoria Nyanza of 1022 tons register or thereabouts, on the one part, and the respective other persons whose names and signatures, or the names and signatures of whose partnership firms are respectively hereto set and subscribed, such persons being respectively owners or consignees or persons duly authorised and entitled to take delivery of cargo by the said vessel, and who are hereinafter called "the said consignees" of the other part.

Whereas it is alleged by the said George Hamilton Fletcher that the said ship, whilst in the prosecution of a voyage from Calcutta to London with a general cargo of indigo, jute, and other produce, was, by perils and accidents of the seas, stranded on the French coast about twenty-five miles south of Boulogne, and that steps were at once taken by the master and the said owner of the said ship for the safety and preservation of the ship

[Q.B. DIV.

and cargo, and a large portion of the said cargo was discharged from the said ship and landed, and the same has since been forwarded to London by the said George Hamilton Fletcher, and other large portions of the said cargo have been saved and have arrived in London or elsewhere in England, either in the said ship or otherwise. And whereas the said George Hamilton Fletcher alleges that he has paid and expended, or has become liable to pay and expend, large sums of money, and has incurred great expenses and made certain sacrifices in and about the saving and preservation of the said ship and cargo, and the forwarding of the same cargo to London, and otherwise in consequence of the said stranding, and that part of such sums of money, expenses, and sacrifices will be a charge upon the cargo of the said ship, and that other portion thereof will be a charge on the said ship or on the freight of the said goods, and that other portion thereof will be a charge in the nature of general average on the said ship, her cargo, and freight. And whereas in the course of the aforesaid salvage operations, damage may have been done to the said ship or to the said cargo, which may give rise to a claim for general average contribution in respect thereof. And whereas the said sums of money, expenses, sacrifices, and damages cannot yet be ascertained and adjusted, and the respective amounts and contributions due from the respective owners or consignees of goods by the said ship in respect thereof, cannot yet be ascertained. And whereas the said consignees have respectively applied to the said George Hamilton Fletcher for delivery of the goods consigned to them respectively by the said vessel, or of which they are respectively authorised to claim and take delivery as aforesaid, and the said George Hamilton Fletcher has agreed to deliver the said goods to them respectively on the freight due thereon being duly paid or secured to him, and upon receiving such payment on account of and security for the amounts and contributions which may be due from or in respect of the said goods for general average or charges or otherwise on account of the said sums of money and expenses expended or incurred by the said George H. Fletcher as aforesaid, or on account of the said sacrifices and damages as is herein before mentioned. And whereas the said consignees in consideration of the delivery of their said goods in manner aforesaid have respectively agreed to pay and have paid to the said George Hamilton Fletcher, or to Messrs. Ismay, Imrie, and Co., of London, on his behalf, on account of the said amounts and contributions due from or in respect of their said goods, the sums of money respectively set against their signatures hereto, and the receipt whereof is acknowledged by the initials of the said George Hamilton Fletcher, or by the said Messrs. Ismay, Imrie, and Co. placed against the same, and they have also respectively agreed to sign the undertaking hereinafter contained. Now, this agreement witnesseth that for the considerations aforesaid, the said consignees do respectively promise and agree to and with the said George Hamilton Fletcher, that they will, as soon as conveniently may be, and within a reasonable time after this date, respectively give to the said George Hamilton Fletcher or his agents, true and correct particulars of the goods which shall be so delivered to them respectively as aforesaid, and of the value of such goods for the purpose of the adjustment of the general average and charges thereon. And further, that when and so soon as the said sums of money, expenses, sacrifices, and damages shall have been duly adjusted, and the respective amounts or proportion due to the said George Hamilton Fletcher from or in respect of the goods so delivered to them respectively, whether for general average, or charges, or otherwise, on account of the said sums of money and expenses expended or incurred by the said George Hamilton Fletcher as aforesaid, or on account of such sacrifices or damage to the said ship or goods as aforesaid has been duly ascertained, they will respectively pay to the said George Hamilton Fletcher the amount or proportion so due in respect of their said goods, after deducting therefrom the amount so paid by them on account as aforesaid; and for the considerations aforesaid, the said George Hamilton Fletcher does promise and agree to and with the said consignees respectively, that the said George Hamilton Fletcher shall and will use all reasonable diligence to cause the said sum of money, expenses, and damages to be ascertained and adjusted, and the amounts and contributions due from the said consignees respectively in respect thereof to be ascertained according to law; and

that in case the amount so paid to him on account of the said consignees or any or either of them shall, on the final adjustment, appear to exceed the amount due from such consignees or consignee respectively, the said George Hamilton Fletcher shall and will forthwith return the balance or excess to such consignees or consignee respectively. And it is further agreed between the said parties hereto that Messrs. Elmslie and Son shall be the average staters engaged to prepare the said adjustment. Signed by the plaintiffs and others. Mathew (with him Davidson) argued for the plaintiff, but was stopped by the Court.

M'Leod for defendant.

COCKBURN, C. J.-Our judgment must be for the plaintiffs. This is a charge which cannot properly be made; it may be considered under two heads: First the expense of getting the ship and cargo from the place of stranding, and bringing the cargo to England; and next, the expense as to the unidentified goods. As to the first head of expense, it cannot be brought under the head of general average, which pre-supposes some sacrifice made on the part of the shipowner or the owner of cargo for the preservation of the general interest in the adventure. (a) In such case the loss does not fall on the individual whose property has been sacrificed; but, as the sacrifice has been made for the general good, it is borne equally by all. But that is not the case in the present instance. This is a case in which the shipowner has an interest in getting his own ship off, and in bringing her safe into port, and also in bringing home the cargo, in order to earn his freight, and he cannot throw the extra expense upon the shippers of goods. He was doing what was essential to his own interest, and in the performance of the obligations of his own contract. He is not justified in giving up the adventure, unless it becomes hopeless, and it is not hopeless when he can bring both ship and cargo into port with some expense and trouble on his part. In point of fact he did not abandon the voyage, and brought home both ship and cargo. Therefore as to this head of expense, it is clear the charge cannot be made by the shipowner. Then as to the expense incurred as to the goods not identified; that, also, is for the shipowner's own benefit, as well as for the benefit of the consignees. They are entitled upon production of bills of lading to delivery of their goods. If the shipowner says, "There are the goods, but I cannot distinguish yours, select which are yours," the obvious answer is, "You are bound to deliver our goods, and unless you do so we shall not pay the freight." The parties in this case came to a very wise arrangement-that the goods not capable of being identified should be sold for the benefit of the consignees, and the proceeds divided pro ratâ. That was for the common convenience, and the shipowner was interested in carrying it out, as well as the consignees. And to say that the shipowner should be entitled to make an extra charge in respect of that which was for his own benefit would be contrary to all principle. Our judgment, therefore, is that these charges cannot be made.

MELLOR, J.-I am entirely of the same opinion on both points. It was argued by Mr. M'Leod that the plaintiff and the other parties with him to the agreement were standing by whilst the shipowner was doing more than he strictly was obliged to do; and that as they suffered him to do this, they were bound to pay a charge for it. I cannot see that any such duty is made out by the facts. Judgment for plaintiffs. Solicitors for plaintiffs, Hollams, Son and Coward.

Solicitors for defendant, Waltons, Bubb and Walton.

COMMON PLEAS DIVISION.

Reported by A. H. BITTLESTON and J. A. FOOTE, Esqrs., Barristers-at-Law.

Nov. 15 and Dec. 21, 1877.
(Before DENMAN J.)

MCMILLAN AND SON v. LIVERPOOL AND TEXAS
STEAMSHIP COMPANY (LIMITED) AND C. GRIMSHAW
AND Co.

Company-Liability for acts of directors-Purchase of ship-Part payment in shares-Conditional promise to dispose of-Refusal to acceptNot allotting.

Shipbuilders contracted with a trading company to build for them a steamer, to be paid for by instalments at different stages of the vessel's progress, one-tenth of the whole to be paid in fully paid-up shares in the company at par, on delivery of the ship. At a meeting between the directors of the company and the shipbuil lers on the day that the above contract was signed, the latter having raised an objection to receiving any part of the purchase money in shares, the chairman and the managing director of the company, who together formed a firm carrying on a sparate business as cotton brokers under the title of O. G. and Co., gave them the following letter, dated the same day: "We hereby beg to say that we shall do our best to dispose of the stock we propose that you shall take in payment of the last instalment of the steamer, this day contracted for with you. It is not our expectation that we shall have to call upon you to take up these shares." This was signed" C. G. and Co." Before the delivery of the ship, an individual member of the firm of shipbuilders applied for some shares in the company on his own account, and the company declined to allot any to new applicants exc pt at 5 per cent. premium. No shares were allotted to the shipbuilders until three years after the delivery of the ship, when the company was about to wind-up. Held, first, that, in the absence of express authority or some evidence of ratification, the letter of C. G. and Co. did not bind the company; secondly, that the shipbuilders having from the rim of the delivery of the ship insisted upon payment of the last instalment in cash, the company were not bound at that time to allot them shares; and thirdly, that the duty of C. G. and Co. as regards disposing of the shares did not arise until they were due, viz., on the delivery of the ship, and therefore that a resolution of the company to issue no shares except at a premium, before the delivery of the ship, was no evidence as against C. G and Co. that they did not do their best to dispose of the shares; and that C. G. and Co. having in no

way prevented shares being allotted to the ship builders on or after delivery of the ship, no duty arose on their part until such allotment. THIS was an action tried at Liverpool during the last Summer Assizes before Denman, J., and reserved by him for further consideration.

It was argued by Russell, Q.C. and Bigham for the plaintiffs; Herschell, Q.C. and Mybergh for the defendants, the Liverpool and Texas Company; Gully, Q.C. and Carver for the defendants, Grimshaw and Co.

The facts of the case and the arguments of counsel sufficiently appear from his Lordship's judgment.

Dec. 21.-DENMAN, J.-In this case, which was tried before me at the last Liverpool Assizes, the plaintiffs were shipbuilders at Dumbarton. The defendant company was a trading company registered under the Acts of 1862 and 1867, and the defendants C. Grimshaw and Co. were a firm of cotton brokers at Liverpool consisting of two persons, Thompson and Lingham, Thompson also being the chairman and Lingham, the managing director of the company. On the 23rd Aug. 1873 the plaintiffs contracted with the company to build for them a steamer for 52,2007., payable by instalments at different stages of the vessel's progress, the two last to be one-fifth by cash, when delivered, and one-tenth (ie. 52507.) "by company's fully paid-up shares at par, when delivered." It was agreed that "when delivered" meant "when the ship was delivered." The statement of claim alleged that, in consideration of the plaintiffs entering into the contract, and thereby undertaking to accept the final instalment in shares of the company, it was further agreed that the defendants (the company) should sell or do their best to dispose of the stock before the said final instalment became due or within a reasonable time afterwards, so that the plaintiffs might be paid wholly in cash. It then set out the following letter, addressed to the plaintiffs, and signed "C. Grimshaw and Co.," dated on the same day as the contract, upon the construction of which the argument before me, on further consideration, mainly turned: "We hereby beg to say that we shall do our best to dispose of the stock we propose that you shall take in payment of the last instalment of the steamer, this day contracted for with you. It is not our expectation that we shall have to call upon you to take up these shares." The statement then alleged that this letter, though signed by Grimshaw and Co. only, was written by them as agents for and on behalf of the company. An attempt was made at the trial to prove this part of the statement of claim; but I do not think it necessary to say more than that, in my opinion, there was no such evidence as to fix the company with any liability founded on this letter; and the question most seriously argued before me was, whether the defendants C. Grimshaw and Co. were liable for a breach of the promise contained in it, which depended, first, on the true construction to be placed on it, and, secondly, on the conduct proved as against the defendants, which was relied upon as a breach. The vessel was finished and delivered to the company on the 24th Oct. 1874. The breach relied upon as against the company was, that between the 23rd Aug. 1873 and the 24th Oct. 1874 (i.e., between the contract and the delivery of the

ship), and for some time afterwards, stock for the amount of the final instalment might easily have been sold or placed in the market, or otherwise disposed of at or above par, and that the defen

dants did not within a reasonable time after the 24th Oct. allot shares and tender scrip to the plaintiffs, and so prevented the plaintiffs from themselves selling them at par, that the business of the company fell off, and on the 5th April 1877 it went into voluntary liquidation by a resolution, confirmed on the 20th, and that on the 19th April the company for the first time tendered scrip for shares at par value, which shares were then much depreciated in value, and were refused by the plaintiffs, who had lost the par value of the shares, and had not been paid the 52501. in cash. It was proved at the trial by one of the plaintiffs that on the 22nd Aug. 1873 he had a meeting with the directors of the company (Messrs. Thompson and Lingham being present), when the terms of the proposed contract were discussed, but nothing said about payment being to be made in cash or shares. On the 23rd the same plaintiff went to the office of Messrs. Grimshaw and Co., and the contract was again discussed, and the plaintiff at first objected to take the last one-tenth of the price in shares; but after some further discussion Mr. Lingham said that the prospects of the company were so good that if the plaintiffs were not willing to take the shares at the time of the delivery of the ship, they (the firm of Grimshaw and Co.) would get them taken up. The plaintiff then said he must have a guarantee or back letter; whereupon the letter of 23rd Aug. 1873, set out in the claim, was given. On the 24th Oct. 1874 the vessel was delivered, and on the 20th Nov. 1874, the plaintiffs sent in their account claiming a final balance of 74771. 10s. At that time 40,000l. or thereabouts was dae in respect of the earlier instalments, and bills had been given which were from time to time renewed, and in fact a very much larger sum than the final balance claimed in the letter of 20th Nov. 1874 remained due at the time of the action, brought in June 1877. The plaintiff, in his cross-examination, admitted that he was aware. on the 21st Aug. 1873, that it would be necessary that substantially all the money required in order to pay for the ship would have to be found by shares. On the 1st Dec. 1874 a letter was sent to the plaintiffs, in answer to their letter of the 20th Nov., signed "C. Grimshaw and Co., managing directors, per C. A. Webster " (the secretary of the company), in which, after discussing certain deductions claimed by the company, was the passage, "You also appear to forget that one-tenth of the cost of the ship you promised to take shares for at par." In answer to which, on the 3rd, the plaintiffs wrote: "With reference to payment of the one-tenth in shares of the company, your letter of 23rd Aug. 1873, given at the time of contract, implies that we will not be called on to take these shares, and as we are circumstanced at present, and for two or three months to come, we are not in a position to take shares, although our intention is to take a number of shares on as early a date as possible." The answer to this letter came on the 11th in a letter signed, “C. Grimshaw and Co., per C. A. Webster, managing director," and contained the following: "The letter (of 23rd Aug.) simply states that C. G. and Co. will do their best to dispose of the stock which you engaged to