1000

1350

The owners of the Welsh Girl were ready to allow the insurance association to receive 1998ths of the 1000l., and the same proportion of the interest on the hull-namely, 7401. 14s. 9d. and 1347. 78. 9d., making in all 875l. 28. 6d.

The owners of the Welsh Girl admitted that certain costs amounting to 2091. 10s. 5d. had been incurred in the action against the Commonwealth which were not recoverable from the owners of the Commonwealth, and they submitted that these should be borne by them and the insurance association proportionately to the amounts due to them out of the fund in court; +ths of 2091. 10s. 5d., or 731. 10s. 4d., to be paid by the owners of the Welsh Girl; and 5ths of 2091. 10s. 5d., or 1361. Os. 4d., to be paid by the insurance association. As the owners of the Welsh Girl had paid 261.3s. 1d. towards these costs on the 25th July 1902, it left them a balance to pay of 461. 178. 3d.

The ultimate proportions due to the owners of the Welsh Girl and the insurers were as follows: Owners of Welsh Girl to £ S. d. £. 8. d. receive 473 3 6

Less costs

Balance to receive

...

426 6 3

921 19 9 £1348 6 0

The insurance association contended that, when the second 500l. was paid under the policy, the managing owner of the Welsh Girl, Mr. Bennett, had agreed that any sums recovered from the wrongdoer should be received for the benefit of the insurance association alone, and that, as the owners had been paid for a total loss, all the property and rights of the assured devolved on the underwriters, who were therefore entitled to any and all sums recoverable from the wrongdoer.

The summons was by consent adjourned into court, and witnesses were heard on the question of whether the agreement alleged had been made.

Horridge, K.C. and M. Hill appeared for the owners of the Welsh Girl.

Scrutton, K.C. and D. Stephens appeared for the insurance association.

The cases cited were the same as those set out in the arguments below.

[CT. of App.

the registrar and merchants, for them to ascertain what amount was payable by the Commonwealth. There is no doubt that the Commonwealth is responsible for the loss, but the question before the court arises from the rather complicated state of the law.

Before the Welsh Girl started on her voyage her owners, through the ship's husband, a man named Bennett, insured her for 1000l. with an insurance club called the Dee Shipowners' Mutual Insurance Association. The policy, which has been lost, is agreed to have been a valued policy for 1000l.; but the vessel was admitted by both sides to be of the value of 13501. The insurance club paid 1000l. to the owners of the Welsh Girl under the policy, and eventually brought an action against the owners of the Commonwealth for the loss of the schooner. A question arose in the course of the case which I decided when I heard this summons, namely, whether by Mr. Bennett the owners of the Welsh Girl had abandoned all rights over and above the 1000l. whether they were estopped from making any further claim, such as is made on this summons, against the amount recovered from the Commonwealth.

I held that in the first place Mr. Bennett, who had been the ship's husband, had no further power to make any agreement with respect to his co-owners, the schooner being at the bottom of the sea. Beyond that, I was not only satisfied that the co-owners never agreed he should make any such agreement as the underwriters contended, but I was of opinion, having heard the evidence, and ascertained that the minutes book of the insurance club contained no entry of the fact, that no such definite agreement was made. That I decided, and therefore I need not go into that matter to-day.

Then we come to the question of law. The vessel was valued at 1350l., and she was insured for 1000l. The club insured her for 1000l., and the plaintiffs, the owners of the Welsh Girl, were their own insurers for 3501. The vessel was totally lost, and, the club having paid 1000l., the question is what about the further value of 3501. A number of cases have been cited as to the difference between a valued policy and an open policy, and the result seems to be this-that where it is a valued policy you take the value in the policy as absolutely fixed. Neither side may go away from that as to the value of the property insured. Also, where the policy contains an agreed statement of the value of the ship there can be no question between the parties as to what is the true value of the ship, even though hereafter it may be ascertained that the value of the ship is less or more than the amount declared in the policy; and as between the parties the value so stated is definite and cannot be altered. The case of The Balmoral (87 L. T. Rep. 247; 9 Asp. Mar. Law Cas. 139, 254, 321; (1902) A. C. 511) has been quoted where the ship proved to be worth 40,000l., whereas she was only declared in the policy to be worth 33,000l., and she was held to be worth 33,000l. In this present case 10001. has been paid into court by the owners of the Commonwealth as the value of the Welsh Girl, and the claim put forward by the owners of the Welsh Girl is this: They say that you have to deal with that 1000l. in the proportion of 13ths, and that they are entitled to receive ths of that 1000l.—namely, 2591. 5s. 2d.

350

1350

CT. OF APP.

1000

1350

I leave out of account the freight, because the sum paid in respect of loss of freight is entirely due to the owners of the Welsh Girl. Then there are two other items-the cost of the deposition 11., agency and postage 51. 58.which it is clear have already been paid, by the accounts put in, to the owners of the Welsh Girl; therefore they go out. Then there is claimed a proportion of the amount that has been paid into court in respect of interest. The amount is 2071. 18., and the owners of the Welsh Girl claim the same proportion, amounting to 721. 138. 4d. Then they say that there should be paid to the insurance club 1998ths of the 1000l., amounting to 7401. 14s. 9d., and the same proportion of the interest, amounting to 1341. 78. 9d., making a total sum of 8751. 2s. 6d. The sums I have mentioned, together with the amounts which go to the owners of the Welsh Girl for freight, deposition, agency, &c., make 13481. 6s., which is the total amount which the registrar has found to be payable by the owners of the Commonwealth. Besides that, there is a question of costs. With regard to costs, the same principle is in a way adopted, but instead of taking ths, which is the ratio deciding the amount, the owners of the Welsh Girl, properly enough, have taken the proportion which the amount of the sum payable to either party bears to the total; so that the owners of the Welsh Girl claim to pay 7ths of the costs, and they say that the insurance club should pay the balance, 87ths; taking the total amount of the costs awarded-viz., 217. 198. 3d.the owners of the Welsh Girl are to pay 7. 148. 1d. and the insurance club 14l. 58. 2d.

1348

350

1350

1348

I cannot agree to that arrangement, as it seems to me that the matter has been taken on wrong lines. The case I have referred to of The Balmoral (ubi sup.) is taken exactly in the right way on 33,000l., and the proportion must be so dealt with here. The figures should beWelsh Girl 459ths and the insurance associationths, or 71. 98. 9d. and 14l. 9s. 6d. An American decision, The Livingstone (130 Fed. Rep. 746) has been referred to, but with regard to that I have to say that where American and English decisions conflict I have, of course, to adopt the English decision. The American decision is absolutely at variance with the leading case in these courts-namely, North of England Iron Steamship Insurance Association v. Armstrong and others (3 Mar. Law Cas. O. S. 330 (1870); 21 L. T. Rep. 822; L. Rep. 5 Q. B. 244). I adopt the English decision, and find as a matter of fact that the claim of the owners of the Welsh Girl is well founded. I give judgment accordingly for their figures as stated in their amended statement of claim.

Certain questions as to the costs of the motion and the amounts of the solicitor and client costs to be paid by each party and the division of the interest on the sum recovered in the action against the Commonwealth stood over.

These questions were further argued on the 26th May 1906, and on the 16th July the learned judge decided that the costs not recovered by the plaintiffs from the owners of the Commonwealth should be borne by the owners of the Welsh Girl and the insurance association proportionately to the amounts received by each; that each party should bear their own costs of the summons; and that the interest recovered from the owners of the

[CT. OF APP.

Commonwealth on the amount of the damages should be apportioned as follows: The whole interest on freight to be paid to the owners of the Welsh Girl; the whole interest on the 10001. recovered in respect of the value of the hull to be paid to the owners of the Welsh Girl up to the date when the insurance association paid them 500l. in respect of their loss. From that date up to the date the second 500l. was paid the interest was to be shared equally, and after the date of the second payment the whole of the interest was to be paid to the insurance association.

The result of the judgment was worked out and embodied in the order of the court in the following schedule:

Welsh Girl had not, on being paid the sum of 1000l. by the insurance association, surrendered their rights of making any claim against any amount which the insurance association might recover from the owners of the wrongdoing vessel, and that it might also be set aside and varied in so far as it held that the owners of the Welsh Girl were entitled to any interest on the value of hull recovered from the owners of the wrongdoing ship.

On the 4th Dec. 1906 the owners of the Welsh Girl gave notice of a cross-appeal asking that the judgment of the court below as to the division of interest on the value of the hull might be set aside, and that it might be adjudged that the owners of the Welsh Girl were entitled to 350 ths of the interest paid into court by the owners of the wrongdoing ship in respect of the value of the hull, and to the costs of the motion and appeal.

1350

Scrutton, K.C. and R. A. Wright (D. Stephens with them) for the appellants, the insurance association.-The insurers are entitled to the whole of the 1000l., as that is the true value of the ship. The ship was totally lost, and the insurers have paid 1000l., the total value of the ship at the time of the loss. Accordingly the underwriters are entitled to all the rights of the assured, by the exercise of which the loss against which the assured were insured could be diminished:

Castellain v. Preston, 49 L. T. Rep. 29 (1883); 11
Q. B. Div. 380.

The rights of the underwriters are those of the assured (Simpson v. Thomson, 38 L. T. Rep. 1; 3 Asp. Mar. Law Cas. 567 (1877); 3 App. Cas. 279), and the damages recovered from the wrongdoer are in the nature of salvage and belong entirely to the underwriters:

North of England Insurance Company v. Armstrong (ubi sup.).

The value of the ship is proved to have been 10007., and the assured, having been paid that sum by the underwriters, bave received a complete indemnity. The judgment of Bargrave Deane, J. gives them more than an indemnity, and the insurers less than they are entitled to by subrogation. This is contrary to the principle laid down in

Castellain v. Preston (ubi sup.);

The Livingstone, 130 Fed. Rep. 746. The value agreed on in the policy is not conclusive for all purposes:

Burnand v. Rodocanachi, 47 L. T. Rep. 277; 4 Asp. Mar. Law Cas. 576 (1882); 7 App. Cas. 333. The assured should never get more than an indemnity.

Horridge, K.C. and Maurice Hill, for the respondents, the owners of the Welsh Girl, were not called on to argue the appeal, and were stopped when they had opened the cross-appeal. The following cases were also referred to: Irving v. Manning, 1 H. L. Cas. 287; Lewis v. Rucker, 2 Burr. 1167.

Sir GORELL BARNES, P.-The appeal in this case is from a decision of Bargrave Deane, J., which, upon the principal point which we have to decide, seems to me to be substantially right. In this case an insurance had been effected by the

[CT. OF APP.

owners of the Welsh Girl with their underwriters for the sum of 1000l., by a valued policy in which the vessel was valued at 1350l. The Welsh Girl was sunk in collision with the steamship Commonwealth, and after some trouble, apparently, the Commonwealth was made responsible and a sum of 1000l. in respect of the loss of the Welsh Girl was recovered in an action between the owners of the Welsh Girl and of her cargo and freight and her master and crew, and the owners of the Commonwealth. In that action this motion was made. In addition to what was recovered for the loss of the vessel there appears to have been something recovered for freight and also a certain sum of interest in respect of the loss of the ship. Now, that sum of 1000l. having been recovered, it is only necessary to state another fact which gave rise to the difficulty in the case. The underwriters of the Welsh Girl appear to have paid, after the loss of the ship, 500l. at first and afterwards another 500l., making therefore the total sum of 10001, which they were liable to pay under their policy. Then, this money having been paid into court in the case between the two ships, the motion has been made to ascertain the proportions in which the money in court should be divided between the owners of the Welsh Girl and their underwriters.

Bargrave Deane, J., as I understand his decision, has found that the owners of the Welsh Girl were entitled to receive, out of the money paid into court in respect of the loss of their ship-out of this 1000l.-350-1350ths of that sum, leaving the other fraction to be received by the underwriters. The appeal from that decision is brought by the underwriters, who have argued through their counsel that they are entitled to take the whole of the money which has been paid into court in respect of the loss of the ship, because, he says, they have paid 1000l., and that is the sum at which the value of the ship was fixed in the Admiralty proceedings. I take it that they mean that that must be treated as the true value of the ship as compared with the value in the policy-namely, 13501. The argument appears to be based upon this, that the underwriters, who have only partially insured this ship, are entitled when the ship has been lost and money recovered in respect of her loss against the wrongdoer, if they have paid an amount equal to the value of the ship so recovered in that action, to keep the whole of that money, and that no portion of it ought to be accounted for to the owners of the ship.

A considerable number of cases have been cited to us which to my mind do not really affect the question which we have to determine. Those cases were the cases of North of England Insurance Company v. Armstrong (ubi sup.), Burnand v. Rodocanachi (ubi sup.), The Livingstone (ubi sup.), and the Balmoral Steamship Company (ubi sup.). None of those cases appear to me really to touch upon the question we have to determine. We are not here called upon to criticise the Armstrong (ubi sup.) case and to decide whether it is right as to what is the position of the underwriters and of the assured where more has been recovered than the amount of the policy, though, by the way, it should be pointed out that North of England Insurance Associa tion v. Armstrong (ubi sup.) does not show the facts in which the case occurred.

66

First of all there is some authority as to the position where there has been an abandonment to underwriters, which I think has a bearing upon the present case. In Arnould on Insurance, vol. 2, at sect. 1187, I find this: It appears equally clear that where a ship is only partially insured, so that her owners remain to some extent 'their own underwriters,' the effect of a notice of abandonment will be to make the owners and the underwriters joint tenants of the property, in the proportion which the amount uninsured bears to be insured." Again, in sect. 1215, the heading to which is "In Cases of Double or Over-Insurance," there is this passage: "On the other hand, the

assured is considered to be his own insurer to the extent of the sum not covered, and as consequently entitled to that extent to his proportionate share in the proceeds of the salvage. Thus, suppose A. to have insured goods, the real value of which is 1000l., for 800%., of which sum B. subscribes for 500l., and C. for 300l.; A., it is plain, stands his own insurer for 2001. A constructive total loss takes place, and A. abandons. If the proceeds of the salvage amount to 100l., i.e., a tenth part of the whole insurable value of the goods, this must be distributed among the parties to the insurance in the proportion of a tenth of their respective interests, i.e., to A. 201., to B. 50l., and to C. 301."

That seems to me to state very clearly the principle that ought to be applied to a case where there has been an abandonment and salvage, and it seems to me that is the principle upon which the doctrine of subrogation is applicable to the present case. The effect of the argument for the appellants is that the assured in having received the amount of 10007. has in effect placed the underwriters in the position of being subrogated to the whole of their rights, which were fixed by the registrar's report at 1000l.

It seems to me, however, that when the underwriter pays the assured he is subrogated to his rights having regard to the risk he has taken-that is to say, in the present case, when the assured's name is used for the purpose of enforcing an action against the wrongdoer the remedy is sought for the underwriter to the extent to which he had insured, and for the assured to the extent to which he had left himself uninsured. That being so, it seems logically to follow that when the money which is recovered is in hand it ought to be divided in proportion to the respective interests. That seems to me reasonable in

it, it also seems to me to be analogous to the case of salvage where there is abandonment. That being so, it follows that the proportions which ought to be recovered in a case of this kind are easily ascertained. One thousand pounds was recovered from the wrongdoers, partly for the owner and partly for the underwriter, and therefore the proportion becomes 350-1350ths in the one case and 1000-1350ths in the other. It only remains for me to say this, that I regard this case as one in which the position is precisely the same as if the assured had effected full insurance upon the ship, but with different underwriters; as if, for instance, he had insured his ship for 10007. with the underwriters in question on a value of 13501., and had taken out another policy with another set of underwriters for 3501. on the same valuation. I cannot conceive myself what possible answer there could have been to the question what is the division of the amount recovered from the wrongdoer between those two sets of underwriters, except that it must be in proportion to their respective interests. Is there any difference if the assured remains his own insurer with regard to the 3501.? I think not. He is entitled to his proportion just as much as his underwriters would have been if they had undertaken such a risk. That being so, I think the judgment of the court below was right, and that the sum of 10001. brought into court in respect of the loss of the ship must be divided in the proportions I have mentioned. As to the interest brought into court on the 1000l., that must be divided in the same way. For these reasons I am of opinion that the appeal must be dismissed with costs, and the cross-appeal must be allowed with costs.

MOULTON and KENNEDY, L.JJ. concurred. Solicitors for the appellants, W. W. Wynne and Sons, for Forshaw and Hawkins, Liverpool. Solicitors for the respondents, Thomas Cooper and Co., for Hill, Dickinson, and Co., Liverpool.

Tuesday, April 23, 1907.

(Before VAUGHAN WILLIAMS, MOULTON, and BUCKLEY, L.JJ.)

QUEENS OF THE RIVER STEAMSHIP COMPANY LIMITED v. EASTON, GIBB, AND CO. AND THE CONSERVATORS OF THE RIVER THAMES. (a) APPEAL FROM THE KING'S BENCH DIVISION.

Thames Conservancy-Duty to keep the river Thames free from obstructions to navigationNegligence-Evidence.

The plaintiffs' steamer, while navigating the river Thames near Kew Bridge, was damaged by a baulk of timber which had been at one time apparently used as a pile, and which was afterwards found to have its blunt end stuck in the bed of the river and its pointed end slanting upwards and only a few inches below the surface of the water.

Held, upon the facts, assuming, as was the fact, that a duty lay upon the Thames Conservators to use reasonable care to keep the river Thames free from obstructions to navigation, that there was no evidence that the conservators had been (a) Reported by E. MANLEY SMITH, Esq., Barrister-at-Law.

guilty of any neglect of such duty causing the damage to the plaintiffs' steamer. Judgment of Kennedy, J. (95 L. T. Rep. 104 (1906) affirmed.

APPEAL by the plaintiffs from the decision of Kennedy, J. at the trial of the action without a jury.

The action was brought to recover damages for negligence on the part of the defendants.

On the 5th Sept. 1904 the plaintiffs' river steamer Queen Elizabeth, whilst navigating the river Thames on the upper side of the central arch of Kew Bridge, had her side pierced by the pointed end of a baulk of timber.

This piece of timber, which measured 12in. by 12in. by 13ft., had apparently been once used as a pile. It was found after the accident with its blunt end sticking in the bed of the river, and its pointed end slanting upwards and covered by only a few inches of water.

The action was brought against Messrs. Easton, Gibb, and Co., who had been contractors for the rebuilding of Kew Bridge, and against the conservators of the river Thames.

At the trial of the action before Kennedy, J. without a jury the learned judge said that upon the facts before him he could not find any ground for a charge of negligence in the contractors causing the injuries to the plaintiffs' steamer; and with regard to the conservators he held that, though the plaintiffs had a legal right to expect that the conservators would take reasonable care that the steamship should not be exposed to danger from obstruction to the navigation, yet that there was no evidence of any breach of duty by the conservators causing the damage complained of.

The learned judge therefore gave judgment in favour of both defendants

The case is reported 95 L. T. Rep. 104 (1906). The plaintiffs appealed against this judgment so far as it was in favour of the conservators.

Scrutton, K.C. and Balloch for the plaintiffs. Bankes, K.C. and C. B. Marriott for the conservators.

VAUGHAN WILLIAMS, L.J.-I think that this appeal must be dismissed. I think that the judgment of Kennedy, J. was quite right, and that the questions which he propounded to himself were proper questions to propound. Kennedy, J. showed in the course of his judg ment that he took as the basis of the possible liability of the conservators the principles laid down by Blackburn, J. when advising the House of Lords in the case of Mersey Docks and Harbour Board v. Gibbs (2 Mar. Law Cas. O. S. 353 (1866); 14 L. T. Rep. 677; L. Rep. 1 H. L. 93). The headnote of that case says: "The principle on which a private person, or a company, is liable for damages occasioned by the neglect of servants, applies to a corporation which has been intrusted by statute to perform certain works, and to receive tolls for the use of those works, although those tolls, unlike the tolls received by the private person or the company, are not applicable to the use of the individual corporators or to that of the corporation, but are devoted to the maintenance of the works and, in case of any surplus existing, the tolls themselves are to be proportionably diminished"; and then further on: 'If knowledge of the existence of a

cause of mischief makes persons responsible for the injury it occasions, they will be equally responsible when, by their culpable negligence, its existence is not known to them."

The second passage that I have read from the headnote is really taken from the opinion delivered by Blackburn, J. In that case the action had been tried before Pollock, C.B., and Blackburn, J. said that "the Chief Baron told the jury, in effect, that it was not necessary to prove knowledge on the part of the defendants or their servants of the unfit state of the docks, and that proof that the defendants by their servants had the means of knowledge and were negli. gently ignorant of it, would entitle the plain

tiffs to the verdict." Then a little further on Blackburn, J. said: "If this proposition is correct, the direction of the Lord Chief Baron excepted to was right, for a body corporate never can either take care or neglect to take care, except through its servants; and (assuming it was the duty of these trustees to take reasonable care that the dock was in a fit state) it seems clear that if they, by their servants, had the means of knowing that the dock was in an unfit state, and were negligently ignorant of its state, they did neglect this duty, and did not take reasonable care that it was fit."

It seems to me that the judgment of Kennedy, J. was based on the very principles laid down in that case. He assumed that a duty was thrown upon the conservators to take reasonable care that the waterway of the Thames was not left in a dangerous state, and then he came to the conclusion that there was no evidence either of their knowledge of the danger arising from this oak beam and the curious position in which it was, or that it was in fact there, and he also held that there was no evidence of any neglect of examination or supervision by the servants of the conservators which led to their being negligently ignorant of the danger which was there. There is a curious lack of evidence as to where this pile came from, and as to any reasons which the conservators might have for expecting that a pile would be found in the position in which this pile was. There was nothing whatever to my mind which should have led their officers and servants to expect to find anything of the sort in the circumstances of the case. Nobody would have expected to have found a pile there. Under these circumstances I think that Kennedy, J. was right in holding that there is no evidence of the neglect by the conservators of any duty of theirs which, if performed, would have prevented or rendered less likely the happening of this accident-that is to say, the collision of this steamer with this pile. I think, therefore, that the appeal must be dismissed.

MOULTON, L.J.-I am of the same opinion. I will accept without discussing it the plaintiffs' definition of the duty of the conservators—viz., that the conservators were bound to take reasonable care to keep the bed of the river Thames in proper condition for navigation. In the present case it is common ground that the accident that occurred was of the most extraordinary and unaccountable kind. Even with the knowledge that it actually had occurred, and with the close examination of the place and conditions of the accident that has taken place since, it is