that which is the fundamental condition, I must have omitted to state something which ought to have been stated." Bowen, L.J. said: "Subrogation is itself only the particular application of the principle of indemnity to a special subjectmatter, and there I think is where the learned judge has gone wrong. He has taken the term 'subrogation' and has applied it as if it were a hard-and-fast line, instead of seeing that it is part of the law of indemnity. If there are means of diminishing the loss, the insurer may pursue them, whether he is asking for contracts to be carried out in the name of the assured, or whether he is suing for tort. It is said that the law only gives the underwriters the right to stand in the assured's shoes as to rights which arise out of, or in consequence of, the loss. I venture to think there is absolutely no authority for that proposition. The true test is, can the right to be insisted on be deemed to be one the enforcement of which will diminish the loss?

I think on the first point the plaintiffs are right. I am by no means sure the passages I have read were only dicta. I think the learned judges were stating the principle on which their decision proceeded, but in any case they are dicta of such authority that I think I am bound to follow them, and that they cover this case. I think that this money was received in diminution of the loss, and that the case of a libel as suggested is not in any way analogous. The claim was to recover the amount of damage which the defendants had suffered by reason of having to pay the loss, and the amount of the loss was the measure of damages which the defendants recovered, as is shown by the passage in the judgment of Kennedy, L.J. which I have read. In the case of a libel, the amount of the loss would have no bearing whatsoever upon the damages which would be recovered in respect of an injury to the defendants' reputation. I think, therefore, that this money was received by reason of the enforcement of a right which diminished the defendants' loss, and therefore is within the judgments I have mentioned and covered by their authority.

With regard to the second point, the plaintiffs contended that the expenses were limited to the amount of costs payable to the defendants between party and party, as they said that that amount must be looked on in law as the costs properly incurred by the defendants in respect of the action. If this be right, the defendants have received these costs and cannot deduct

any further expenses. But I think this point is covered by the authority of the decision of Jelf, J. in Hatch, Mansfield, and Co. v. Weingott (ubi sup.), and that the plaintiffs are wrong. It is true that in that case the taxed costs were those of a criminal prosecution, and not those taxed between party and party in a civil action, but I think the principle is the same. The costs taxed in a criminal prosecution as payable by the county are those which are considered as the costs properly payable as the costs of the prosecution in any particular case, and anything beyond them is looked upon as equally a luxury, to use the expression quoted in the Annual Practice, at p. 941, from the case of Smith v. Buller (L. Rep. 19 Eq., at p. 475), as the costs of an action beyond what are allowed between party and party. I think, therefore, that

the defendants are entitled to deduct whatever are the reasonable expenses of recovering the sum obtained from Messrs. C. T. Bowring and Cɔ. But I am quite unable to say that all the costs of that action are properly to be deducted. I do not know enough of that action to say that, and I think it very improbable, and I cannot accept Mr. Hamilton's contention that they are entitled to deduct necessarily either all the costs which were in fact incurred in investigating Messrs. C. T. Bowring and Co.'s business up to the time when the facts which led the judge to find that this fraud was established were discovered, or all the costs incurred in respect of issues in the action in which the plaintiffs were interested, if the defendants succeeded in them. I do not see how I can in my present state of information lay down any principle to guide the inquiry except what I have already said-namely, that they are entitled to deduct whatever may on investigation of the circumstances of that action be found to be properly attributable to the recovery of this money, and that that cannot be determined without knowledge of all those circumstances of which I am quite ignorant. I do not think, therefore, I am in a position to give any final judgment until after that inquiry has been held and the result is known.

Solicitors for the plaintiffs, Ballantyne, McNair, and Clifford.

Solicitors for the defendants, Davidson and Morriss.

Wednesday, July 17, 1907.

(Before WALTON, J.)

MARITIME INSURANCE COMPANY LIMITED v. ALIANZA INSURANCE COMPANY OF SANTANDER. (a)

Insurance-Construction of policy—Re-insurance "Port or ports, place or places."

By a policy effected with the plaintiffs a vessel was insured against (inter alia) perils of the sea "at and from a port in New Zealand to Nehoué, New Caledonia, and while there and thence to Grangemouth." The plaintiffs reinsured with the defendants part of the risk in the following terms “at_and_from the 1st July 1904 until the 31st Aug. 1904, both days inclusive, or as original whilst at port or ports, place or places in New Caledonia 5001. on hull,

materials, &c., valued at 70001.

a

being

reinsurance applying to policy subject to the same clauses and conditions and to pay as may be paid thereon." During the currency of the policy of reinsurance the vessel whilst passing through Gazelle Passage, within the geographical limits of New Caledonia, struck on a reef.

Held, that the vessel, at the time of the loss, was not at a "port or place" in New Caledonia within the meaning of the policy, and that the reinsurers were not liable.

Semble: That "place" meant some place at which the vessel had arrived to load or possibly to discharge, or to take coal, or to repair, or even to shelter, a place at which the vessel was for some (a) Reported by W. TREVOR TURTON, Esq.,

Barrister-at-Law.

purpose, and not a place at which the vessel happened to be in passing.

COMMERCIAL LIST.

Action tried before Walton, J., sitting without a jury.

The plaintiffs claimed to recover for loss under a policy of marine reinsurance. The facts, as agreed, were as follows :

(1) By a policy of marine insurance dated the 17th May 1904, for 1000l., at a premium of six guineas per cent, and a second policy of even date for 500l., at a premium of 71. per cent., the said policies being issued pursuant to slips dated the 16th and 20th April 1904 respectively, the plaintiffs insured the Dumfriesshire, valued at 7000l., against perils of the sea and other usual perils "at and from a port in New Zealand to Nehoué, New Caledonia, and while there and thence to Grangemouth.' (2) By a policy of reinsurance, dated the 25th April 1905, for 5007, at a premium of 6s 8d. per cent., issued by the defendants pursuant to a slip dated the 25th April 1904, the defendants reinsured the plaintiffs in the following terms: At and from the 1st July 1904 until the 31st Aug. 1904, both days inclusive, or as original whilst at port or ports, place or places in New Caledonia. 5001. on hull, materials, &c., valued at 7000l., or valued as in original policy or policies, being a reinsurance applying to policy effected with "the Maritime

66

Insurance Company, subject to the same clauses and conditions, and to pay as may be paid thereon." The said terms were accompanied by certain marginal voyage clauses in print and a written clause" risk to commence same time as original," and the policy itself was in the printed form of a voyage policy. The words "at and from which preceded the words “1st July" and the said marginal clauses were in print. The two policies mentioned in par. 1 constituted the original policy in respect of which the policy of reinsurance was issued. (3) The Dumfriesshire, on the 1st June 1904, sailed from Dunedin for Nehoué. (4) On the 3rd July 1904 the Dumfriesshire while en route for Nehoué was making for Gazelle Passage. After reaching the said Gazelle Passage, and whilst passing through it, she struck on a reef, and certain general and particular average losses were incurred. The plaintiffs paid their proportion of such losses under the policies. (5) Gazelle Passage appears on the Admiralty chart of the north-west part of New Caledonia. Carrey Island, near Gazelle Passage, is an uninhabited patch of sand. (6) If the defendants were liable under the policy of reinsurance to imdemnify the plaintiffs in respect of the plaintiffs' payment, the amount for which the defendants were liable was 1911. 6s. 1d. The vessel struck on a reef near Carrey Island in the Gazelle Passage.

The Gazelle Passage is a passage through the barrier reef of New Caledonia, distant about ten miles from the mainland and Nehoué.

J. A. Hamilton, K.C. and Leslie Scott for the plaintiffs.-The vessel suffered a loss at a definite named place in New Caledonia. The reef is geographically part of New Caledonia, and is treated as such in the Admiralty Sailing Directions. To contend that the reef is not such a place necessitates the reading in of some words of limitation-i.e., "place or places in the nature

of a port," or "place or places where loading or discharging is done." There is no reason why any such words of limitation should be read in; the words "place or places" should be given their natural meaning. The policy was not intended only to cover risks while lying in a port.

Scrutton, K.C. and Mackinnon for the defen. dants.-"Place" means a place in the nature of a port, a loading or discharging place, or a place where the vessel touched and stayed. The reef on which she struck is not a place within the meaning of the policy, and the defendants are therefore not liable to reimburse the plaintiffs for the latter's payment in respect to the losses.

The following authorities were referred to during the argument:

Cockey v. Atkinson, 2 B. & Ald. 460;

Brown v. Tayleur, 4 A. & E. 241; 5 L. J. N. S. 57, K. B.;

The

The

Haughton v. Empire Marine Insurance Company, 2 Mar. Law Cas. O. S. 406 (1866); 15 L. T. Rep. 80; L. Rep. 1 Ex. 206; 4 H. & C. 44; Cruickshank v. Janson, 1810, 2 Taunt. 301; Crocker v. Sturge, 8 Asp. Mar. Law Cas. 208 (1896); 75 L. T. Rep. 549; (1897) 1 Q. B. 330; Arnould on Marine Insurance, 7th edit., sect. 486. WALTON, J.-In this case the plaintiffs sue the defendants under a policy of reinsurance, and seek to recover in respect of a loss suffered by a vessel called the Dumfriesshire under circum. stances which I will mention presently. policy sued on is one of reinsurance. original policy was one by which the plaintiffs had insured the vessel against the ordinary perils "at and from a port in New Zealand to Nenoué, New Caledonia, and while there and thence to Grangemouth." The policy by which the plaintiffs reinsured did not cover the whole risk, but only a part of it—rather a special part, and it was an insurance of the vessel between July 1904 until the 31st Aug. 1904 at port or ports, place or places, in New Caledonia." On the face of the reinsurance policy it appears to be a "reinsurance applying to policy effected with "the Maritime Insurance Company, subject to the same clauses and conditions, and to pay as may be paid thereon."

the 1st whilst

66

Now, for the purposes of this case one may look, or perhaps one must look, at both policies. The defendants are not liable unless the plaintiffs are liable on the original policy, and the plaintiffs are only liable if the loss occurred on the voyage from a port in New Zealand to Nehoué, New Caledonia, and while there and thence to Grangemouth," and the defendants are only liable if the loss occurred between the 1st July and the 31st Aug., and only if the loss occurred at some port or ports, place or places in New Caledonia.” ~ As to the reinsurance policy, the risk does not begin until the vessel has arrived, or is at a port or place in New Caledonia. If the vessel arrives at a port or place in New Caledonia, and then proceeds to some other port or place in New Caledonia, it may, perhaps, be that the loss occurs in transit, and it may be that the underwriters would then be liable. But I have not to decide that question now. How did the loss, in fact, arise? That appears from the admitted facts, pars. 3, 4, and 5. The loss occurred

66

But the policy is not against losses occurring whilst "at" New Caledonia. The words used are different" at port or ports, place or places in New Caledonia." Is the effect the same?

I have come to the conclusion that it is not. I do not think that the authorities help; indeed, in a question of this kind it is difficult to see how they could. I do not think that the words upon which the present question arises are in such a stereotyped form as to make the authori. ties of much use. I decide this case on my understanding of the words. Witnesses have been called, but I doubt whether the opinions that they expressed can be evidence, as the words are not a stereotyped form. I wish to say that I am deciding this on my construction of the words. Now, I think that, in construing them the first thing that strikes one is that the risk is not "at" New Caledonia. If the risk was to cover loss anywhere in New Caledonia it would have been easy to have expressed it. I think that that risk was not adopted, and not adopted intentionally, and that the reinsuring underwriters did intend to limit their risk to the time that the vessel was at a port or ports, place or places in New Caledonia. It may be that the words "place or places" do add something to "port or ports."

66 Port has a somewhat technical meaning, and "place or places were added to show that it was not intended to confine the meaning to port or ports; but one must remember that these words are used in collocation with "port or ports," and therefore to some extent the meaning to be given to " place or places is coloured by the words used with them in that collocation. Of course, an accident in New Caledonia must happen in a place in New Caledonia; but I do not think that the words can be read as port or ports and any where else," and I think that the contention for the plaintiffs amounts to that. It is sufficient for me to decide that, where the loss occurred-namely, on a submerged reef in Gazelle Passage-the vessel had not arrived at a port or place in New Caledonia within the meaning of the policy.

The words "place or places" used with "port or ports mean, perhaps, something rather wider than was suggested by some of the witnesses. I do not wish to attempt an exhaustive interpretation, but it seems to me that the word "place means some place at which the vessel had arrived to load, or maybe to discharge, or to take coal, or to repair, or even to shelter, a place at which the vessel is for some purpose, not a place at which she happens to be in passing. I have come to the conclusion that the loss did not occur, within the meaning of the policy, at a "port or ports, place or places in New Caledonia." There must be judgment for the defendants.

[H. OF L.

Solicitors for the plaintiffs, Field, Roscoe, and Co., for Batesons, Warr, and Wimshurst, Liverpool. Solicitors for the defendants, Parker, Garrett, Holman, and Howden.

HOUSE OF LORDS.

Nov. 4, 6, and 21, 1907.

the

(Before the LORD CHANCELLOR (Loreburn), Earl of HALSBURY, Lords MACNAGHTEN and ATKINSON.)

NELSON LINE LIMITED v. JAMES NELSON AND SONS LIMITED. (a)

ON APPEAL FROM THE COURT OF APPEAL IN ENGLAND.

66

Charter-party-Exceptions-Unseaworthiness at commencement of voyage-Damage to goodsException of damage capable of being covered by insurance or which has been wholly or in part paid for by insurance ”—Liability of shipowner. Goods were shipped on board a vessel under an agreement which purported to protect the shipowner from liability under certain circumstances, but, in the opinion of the court, the language of the agreement was so ill thought out and confused that it was impossible to be certain what the parties intended to stipulate. Hence, where the goods were damaged owing to the unseaworthiness of the ship and the negligence of the shipowner's agents, it was held that the shipowner was liable as he had not discharged his duty to provide a seaworthy ship and to use reasonable care.

APPEAL from a judgment of the Court of Appeal (Collins, M.R., Cozens-Hardy and Moulton, L.JJ.), reported 10 Asp. Mar. Law Cas. 390; 96 L. T. Rep. 402; (1907) 1 K. B. 769), affirming a judgment of Bray, J. at the trial before him with a jury.

The action was brought by the respondents, as charterers and shippers of a cargo of frozen meat on board the appellants' steamship Highland Chief at their factories at Las Palmas, in the River Plate, in the months of March and April 1905, for carriage to London, to obtain damages against the appellants, as owners of the Highland Chief, for damage to the cargo caused by unseaworthiness, and by the bursting of a brine pipe in one of the holds of the vessel.

At the trial the jury assessed the damages at 23,9001., and found that the Highland Chief was at the commencement of the voyage unfit to carry the cargo of frozen meat safely to its destination; that reasonable means were not taken to prevent unfitness; that the neglect was that of the defendants, their officers, and agents; and that no damage was done during the period of loading or before the commencement of the

voyage.

Judgment was not entered upon these findings until points of law arising upon the contract were argued before the judge, and he delivered a written judgment in favour of the plaintiffs for the amount of damages found by the jury.

The appellants claimed immunity from liability under the contract of carriage, but did not challenge the facts found by the jury.

(a) Reported by C. E. MALDEN, Esq., Barrister-at-Law.

H. OF L.]

Clause 10 of the contract was in the following terms:

The owners are not to be liable for any loss, damage, prejudice, or delay, wherever or whenever occurring, caused by the act of God, the King's enemies, pirates, robbers, thieves, whether on board or not, by land or sea, and whether in the employ of the owners or not, barratry of master or mariners, adverse claims, restraint of princes, rulers, and people, strikes or lock-outs or labour disturbances or hindrances, whether afloat or ashore, or from any of the following perils, viz., insufficiency of wrappers, rust, vermin, breakage, evaporation, decay, sweating, explosion, heat, fire, before or after loading in the ship or after discharge and at any time or place whatever, bursting of boilers, nor for unseaworthiness or unfitness at any time of loading or of commencing or of resuming the voyage or otherwise, and whether arising from breakage of shafts or any latent defect in bull, boilers, machinery, equipment, or appurtenances, refrigerating or electric engines or machinery, or in the chambers or any part thereof, or their insulation or any of their appurtenances, or from the consequences of any damage or injury thereto, however such damage or injury be caused, provided all reasonable means have been taken to provide against unseaworthiness, collision, stranding, jettison, or other perils of the sea, rivers, or navigation of whatever nature or kind and howsoever such collision stranding, or other perils may be caused, and the owners not being liable for any damage or detriment to the goods which is capable of being covered by insurance, or has been wholly or in part paid for by insurance, nor for any claim of which written notice has not been given to the owners within forty-eight hours after date of final discharge of the steamer. The above mentioned exceptions shall apply whether the same be directly or indirectly caused or shall arise by reason of any act, neglect, or default of the stevedores, master, mariners, pilots, engineers, refrigerating engineers, tug-boats or their crews, or other persons of whatsoever description or employment, and whether employed ashore, on board, or otherwise, for whose acts or defaults the owners would in anywise in connection with the execution of this charter otherwise be responsible.

Clause 18 contained the words:

The protection given by this article to the owners is intended to be in addition to that given by art. 10, but is subject to the proviso as to taking means to prevent unseaworthiness therein contained.

J. A. Hamilton, K.C. and Bailhache, for the appellants, contended that in the Court of Appeal it was said that the case was covered by the decision in Price v. Union Lighterage Company (9 Asp. Mar. Law Cas. 398; 88 L. T. Rep. 428; (1903) 1 K. B. 750; affirmed on appeal, 89 L. T. Rep. 731; (1904) 1 K. B. 412), but that case is distinguishable, as are also Sutton and Co. v. Ciceri and Co. (62 L. T. Rep. 742; 15 App. Cas. 144) and Elderslie Steamship Company v. Borthwick (10 Asp. Mar. Law Cas. 24, 121; 92 L. T. Rep. 274; (1905) A. C. 93). The principle of those decisions is that if a shipowner desires to free himself from liability, he must use clear and unambiguous language to effect his purpose. Here the intention is clear that the shipowner should not be liable for any loss which has been covered by insur

ance.

R. Isaacs, K. C., Scrutton, K.C., and Atkin, K.C., for the respondents, argued that in construing a contract the whole document must be looked at in order to arrive at the intention of the parties. In all contracts for the carriage of goods by sea there is a fundamental obligation implied on the part of the shipowner to provide a seaworthy vessel, and to take reasonable care, and the

[H. OF L.

contract must be construed with reference to it. Any intention to get rid of this obligation must be made perfectly clear; general words are not sufficient. In the absence of express words, exceptions only apply to the case of an owner who has fulfilled his primary obligation by supplying a seaworthy ship. The contract will not bear the interpretation put on it by the appellants. In addition to the cases referred to by the appellants, they cited

Tattersall v. National Steamship Company, 5 Asp.
Mar. Law Cas. 206 (1884); 50 L. T. Rep. 299;
12 Q. B. Div. 297;

Phillips v. Clark, 29 L. T. Rep. O. S. 181; 2 C. B.
N. S 156;

Steinman v. Angier Line, 7 Asp. Mar. Law Cas. 46;
64 L. T. Rep. 613; (1891) 1 Q. B. 619;
Owners of Cargo on Ship Maori King v. Hughes, 8
Asp. Mar. Law Cas. 65; 73 L. T. Rep. 141;
(1895) 2 Q. B. 550.

J. A. Hamilton, K.C. was heard in reply.
At the conclusion of the arguments their
Lordships took time to consider their judgment.
Nov. 21.-Their Lordships gave judgment as
follows:-

The LORD CHANCELLOR (Loreburn). My Lords: The plaintiffs shipped a cargo of meat on the defendants' vessel under an agreement of the 18th June 1904. The cargo was lost by reason of the vessel's unseaworthiness, which was due to the defendants' negligence, and in this action the sole question is whether or not they are freed from liability by certain words in the agreement. If the words are considered by themselves they seem to excuse the shipowners, not merely from this, but from any imaginable liability, except such as by law cannot be underwritten. They run as follows: "The owners not being liable for any damage or detriment to the goods which is capable of being covered by insurance, or has been wholly or in part paid for by insurance." But the whole agreement must be regarded, and especially the context of the clause in which this alleged exemption occurs. The words in question do not stand by themselves; they are at the end of a very long sentence, the earlier part of which is wholly without effect if the last part means what the defendants maintain. Beyond that there are two potent considerations weighing heavily against the defendants. One is that in this clause the words in dispute are preceded by an express provision dealing with the very subject of unseaworthiness and negligence, which would be flatly contradicted and overruled by the defendants' interpretation; and yet there follows immediately another sentence which assumes that this express provision is still operative. The other consideration is that in the 18th clause, which is a later clause, the language is again used which shows that the parties supposed this same express provision still to be operative, whereas on the defendants' construction it had ceased to have any effect. I am aware that on the alternative interpretation there would also be some redundancy in this agreement, but there would not be irreconcilable stipulations in ore and the same clause. If I were obliged to fix a definite meaning to the disputed language,,I should prefer the plaintiffs' construction. But, in truth, I think that the clause, taken as a whole, is so ill thought out and expressed that it is not

possible to feel sure what the parties intended to stipulate. The law imposes on shipowners the duty of providing a seaworthy ship and of using reasonable care. They may contract themselves out of those duties, but unless they prove such a contract the duties remain; and such a contract 18 not proved by producing language which may mean that, and may mean something different. As Lord Macnaghten said in the case of Elderslie Steamship Company v. Borthwick (ubi sup.), “an ambiguous document is no protection." That is the ground on which I rest my opinion. I wish to say, with the utmost respect for Mr. Scrutton's arguments, that I cannot agree with him in what I think was his contention, that there is a canon of construction by which the rigour of interpretation in some commercial documents must be proportioned to the importance of the stipulation. to be construed. I know of only one standard of construction, except where words have acquired a special conventional meaning-namely, what do the words mean on a fair reading, having regard to the whole document? I am afraid that it is useless to draw the attention of commercial men to the risks which they run by using confused and perplexing language in their business documents. Courts of law have no duty except to construe them, when a question is raised; but it is often very difficult. And sometimes what the parties really intended fails to be carried out because ill-considered expressions find their way into a contract.

The Earl of HALSBURY.-My Lords: I am entirely of the same opinion. The only observation which I wish to make is in reference to the language used by commercial men. Lord Blackburn used to say that the difference between commercial men and lawyers was that commercial men wished to write their documents short, and lawyers to write them long. But a mixture of the two renders the whole thing unintelligible. I can understand cases where the documents of commercial men acquire a particular meaning, and the courts will give effect to the common interpretation of such words. But here is a docu. ment where apparently the draughtsman has put every conceivable hypothesis into it.

He was

not content to put in a protective clause which might have had an effect. He has gone on as if he were a lawyer to endeavour to make the document as long as possible, and to deal with every part of the subject-matter. Not unnaturally, that sort of composition leads to the document contradicting itself. In one part it is said that the defendants should not be liable at all, and in another that they should be liable under certain circumstances. How is it possible for any court to give a construction to such a document ? The result is that the draughtsman has only jumbled together a number of phrases to which no legal interpretation can be given, so that in the result the legal liability remains.

Lord MACNAGHTEN-My Lords: I concur. Lord ATKINSON -My Lords: I also agree with my noble and learned friend on the woolsack. Judgment appealed from affirmed and appeal

dismissed with costs.

Solicitors for the appellants, Rawle, Johnstone, and Co., for Hill, Dickinson, and Co., Liverpool. Solicitors for the respondents, Parker, Garrett, Holman, and Howden.

Monday, Nov. 25, 1907.

(Before the LORD CHANCELLOR (Loreburn), the Earl of HALSBURY, Lords MACNAGHTEN, JAMES OF HEREFORD, ROBERTSON, and ATKINSON).

SIR JAMES LAING AND SONS LIMITED v. BARCLAY, CURLE, AND CO. LIMITED. (a)

ON APPEAL FROM THE FIRST DIVISION OF THE COURT OF SESSION IN SCOTLAND.

Shipbuilding contract-Payment by instalmentsPassing of property- Contract for completed ship-Sale of Goods Act 1893 (56 & 57 Vict. c. 71).

Where a ship was built to order, under the inspection of an agent of the owner, and the contract provided that the price was to be paid in instalments as the work progressed and was approved, the final instalment to be paid six months after delivery to the owner:

Held (affirming the judgment of the court below), that the property did not pass to the owner until the ship was completed and delivered, the contract being for a finished ship.

APPEAL from a judgment of the First Division of the Court of Session in Scotland consisting of the Lord President (Lord Dunedin) and Lords M'Laren and Kinnear.

The case is reported 45 Sc. L. Rep. 87.

The judgment of the court below recalled arrestments by the appellants of the vessel 468, lying in graving dock at Glasgow, and of vessel 469, then on the stocks in the shipbuilding yard of the respondents.

The ships were being built for an Italian company by the respondents, and the main question was whether, under an agreement between the respondents and the Italian company, dated the 11th Feb. 1907, and ratified on the 11th March, whereby the respondents agreed to build and sell and the Italian company agreed to purchase the steamers, the property in the two vessels constructed, or so far as constructed, was vested in the respondents or in the Italian company.

On the 26th Oct. 1907 a summons was signeted at the appellants' instance against the Italian company, concluding for payment to the appellants of sums amounting in all to 220,0911. 14s. 9d., due by that company to the appellants as the balance of the purchase price of three steamers built for and sold and delivered by the appellants to that company.

The appellants' contention was that by the law of England and of Scotland, when the price of a ship under a building contract was to be paid for by instalments as the work progressed, the property passed to the purchaser as the vessel was constructed, its work inspected and approved, and the instalments duly paid. They accordingly arrested these ships in the respondents' yard, under their summons, as being the property of the Italian company.

Under the agreement between the respondents and the Italian company it was provided that the vessels, which were to be built according to certain specifications, should be completed ready for

leaving, after steam trials, on or before certain specified dates.

By art. 8 it was provided that "on completion of each of the steamers at Greenock upon the (a) Reported by O. E. MALDEN, Esq, Barrister-at-Law,