Douglas and Others v. Scougall and Others [1816] UKHL 4_Dow_269

UKHL
Douglas and Others v. Scougall and Others
[1816] UKHL 4_Dow_269
REPORTS OF APPEAL CASES IN THE HOUSE OF LORDS, During the Session , 1816.56 Geo . III.SCOTLAND.APPEAL FROM THE COURT OF SESSION.

No. 13

Douglas and Others Appellants v. Scougall and Others Respondents

May 17 , 1816 .Subject_ INSURANCE. — SEA-WORTHINESS.Ship sails, and soon after encounters a storm, becomes leaky, puts back, and is found on survey to be materially decayed, and damage discovered which could not be fairly considered as the effect of the storm. Held by the House of Lords reversing a judgment of the Court of Session, that the ship was not sea-worthy when she sailed on the voyage insured.Lord Eldon. (C.) observing, that nothing in the law of insurance was of more importance than the implied warranty of sea-worthiness, with a view both to the benefit of commerce and the preservation of human life; that in a question of sea-worthiness, honesty of intention is no answer, but that the fact of sea-worthiness must appear, or otherwise the underwriter is discharged; and that, though a vessel after sailing encounters a storm, yet, unless the damage which unfits her for the voyage can be fairly considered as the effects of the storm, the implied warranty is not complied with.Insurance on the ship North Star, and on her freight.This was an insurance on the ship North Star, and her freight, from Leith to Pictou, in North America, and the question was whether the vessel was sea-worthy at the time of her sailing from Leith?The vessel was an old Dutch prize 350 tons burthen, which had been employed as a whale ship, and was purchased in 1804 by the Respondents at the price of 1,200 l . including the fishing materials valued at 500l. The vessel was put into the hands

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Vessel sails 23d May, 1804.Encounters a storm; and becomes leaky;And is taken to Greenock.On the 23d May, 1804, the vessel sailed on her intended voyage, and on the same day the Appellants underwrote a policy of insurance on her and her freight, to the extent of 2,100 l . On the 6th and 7th June she encountered a severe gale of wind, and as she began to make so much water that the crew could not keep her free with both pumps, the master bore up for a port, and brought her to Greenock on the 15th June.Survey.Action, November, 1804.Lord Ordinary's interlocutors.Soon after her arrival the vessel was surveyed under the authority of the magistrates, by John Scott and Robert Steele, two ship builders, who reported that the vessel was materially decayed. The Respondents called on the under-writers to repair her, but they refused, on the ground that the report proved that she was not sea-worthy when she sailed on the voyage insured. The Respondents then caused her to be repaired, and brought an action in the Court of Session for payment of the amount, being a sum of 1,426 l . 9 s . 3 d . The Lord Ordinary by several interlocutors, in 1807-8-9, decided in favour of the assured, upon the ground of the certificate of sea-worthiness by the Leith carpenters and the protest of the master. Upon petition to the first division of the Court condescendances were

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Court allows a proof.Evidence.The certificate of the Leith carpenters, and the master's protest relied upon by the insured, were as follows:Certificate by Messrs.Strachan and Gavin.
“ Leith, July 19, 1804.
We hereby certify to all whom it may concern, that the North Star of Leith, belonging to Messrs. Richard Scougall and Co., and others, was in our dock in April last, and underwent every repair that was judged necessary, for enabling her to proceed on her voyage to Pictou, for which she was engaged, and that the carpenter's repairs amounted to 280 l . sterling.”

(Signed) “ Strachan & Gavin .”

Protest

In the protest the master stated that, “on the 6th and 7th current, (June 1804), he met with a severe gale of wind, which obliged him to lay the vessel to under a close-reefed main-top-sail, and she then began to make a great deal of water: that on the 8th, the vessel shipped a sea, which laid her upon her beam-ends; that he then found it necessary to cut away the mizen-boom and sail, also the mizen-staysail, to get the ship wore round on the larboard tack; she then began to strain and make so much water that they could scarcely keep her free with both pumps constantly going; in this situation they continued during the gale, till the people were entirely done out at the pumps: at six A. M. shipped another sea, which sprung the boltsprit, and wrought the stem entirely loose ; at the same time washed the boats out of the chocks; the ship at this time making

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The most material documents, however, were the reports of the Greenock ship-builders, especially the first. They were as follow.First report of the Greenock ship-builders.In pursuance of the warrant of Nathan Wilson, Esq., justice of the peace, we have this day carefully and minutely examined the ship North Star of Leith, James Edmonstone, master, at present in the dry-dock here. We find the iron-work in general very much decayed, and wrought loose; one rider in the after-hold broke; three lower-deck beams decayed, and sprung abaft the main-mast; three and one-half ditto decayed, and sprung before the main-mast; six lower-deck knees decayed, and sprung; three breast-hooks forward in the lower-hold, and one above the deck, decayed; one plank below the lower-deck beams, on each side, decayed; and two planks on the larboard side of the bilge taken off, to examine the timbers, which we find good, but the iron-work quite gone; the ceiling on the floor, in general, quite loose; the iron-work about the hanging-knees in general decayed, and the timber about the bolts; a part of the outside doubling we have taken off, in order to examine the state of the plank and iron-work; the plank we find good and sound, but the bolts and nails quite gone; the boltsprit is sprung, and the stem wrought loose,

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N. B. There is one top-timber, and two ceiling planks, broke in the 'twixt decks, on the starboard side. (Signed) John Scott .Robert Steele .Greenock,July 12, 1804.Second report.Agreeable to the appointment of Nathan Wilson, Esq. justice of the peace, we have examined and surveyed, a second time, the ship North Star, of Leith, at present in dock here, after the doublings is taken off the bows, and some of the lower-deck beams and breast-hooks is taken out, a great number of tree-nail and bolt-holes are bored all over the bottom, from the keel to the bends; most part of the old bolts extracted; we find the timber and plank sound and fresh, as far as can be seen; and it is our joint opinion that, after the repairs going on is completed, and what is pointed out to us by Mr. Scott and Captain Edmonstone, that the ship North Star will be staunch and sea-worthy, and fit to proceed on her present voyage to Pictou in North America.(Signed) John Scott .Robert Steele .Francis Morgan .John Galt .Greenock,Aug. 10, 1804.The log-book was not produced in an entire state, a great part of it having been used for making cartridges; but some leaves of it were produced, which went to confirm the protest. Neither the master nor any person on board at the time of the storm were examined as witnesses. Steele and Scott were examined,

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Interlocutor, December, 1811.Additional evidence. Scott's letter.The Court by interlocutor December 6th, 1811, adhered to the Lord Ordinary's interlocutor reclaimed against. Immediately before pronouncing that interlocutor the Respondents produced, and were allowed to lodge in process, a letter, which had been mislaid, and had not been till then recovered, written to them by Scott, who was employed to repair the vessel after she had been opened up. The letter was as follows:
“ Greenock , 28 th July , 1804.
Messrs. R. Scougall and Co., Leith.Gentlemen—Captain Anderson delivered us your favour of the 24th instant. Next day we began our operations on your ship, the North Star. All the doublings is nearly stript off both bows , and two of the worst of the lower-deck-beams is taken out, and some of the hanging-knees. The ship turns out much better than ever we could imagine. All the timbers in the wake of beam-ends is perfectly sound and fresh, and nothing is as yet discovered defective in any part of the ship that we have opened and examined. The bolts in the doubling is innumerable, and very difficult to extract. All the inside plank is sound and good. We have now a much better opinion of the ship than we had , and will write you next week

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(Signed) “ John Scott and Sons .”

Interlocutor May, 1812.The Court afterwards by interlocutor 29th May, 1812, remitted to the Lord Ordinary to examine Scott again as to the circumstances set forth in the above letter, and generally as to the state of the vessel.Scott again examined, 1812.Second deposition of J. Scott.Scott was accordingly again examined, and the most material part of the deposition with reference to the above letter was as follows:
“Depones, that the second report is perfectly correct; and he adds, in general, that he is now satisfied that what he stated in that report, and letter of 28 th July, is perfectly correct and true . Being interrogated, if he wishes to alter his former deposition, now that he has seen said letter? depones, that he does not. Interrogated for the defenders, whether he is now of opinion, that any of the facts stated, with regard to the state of the vessel, in the first report, was erroneous? depones, that he does not wish to contradict the statement made in said report; but he adds, in explanation, that, from the slight and cursory inspection which he made of the vessel at the time he made his first report, he thought there was a certain decay in her, but, upon more minute inspection, which he was enabled to make by taking off her doublings, she turned out to be in a much better state than he at first thought her . Interrogated, whether, if he had known the state of the vessel to be such as it turned out to be, on a minute inspection at Greenock, he would have

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Interlocutor 27th May, 1813.Appeal.The Court by interlocutor of 27th May, 1813, adhered to the interlocutor reclaimed against; and from these interlocutors the underwriters appealed.Counsel: Sir S. Romilly and Mr. Adam, for Appellants; Mr. Serjeant Marshall and Mr. Grant, for Respondents.Judgment.Importance of requiring a strict compliance with the implied warranty of seaworthiness.Lord Eldon (C.) This is a mere question of fact, whether this ship when she sailed from Leith to Pictou in North America was sea-worthy, or well furnished, tight, staunch, and strong for the voyage insured. I have often had occasion to observe here, that there is nothing in matters of insurance of more importance than the implied warranty that a ship is sea-worthy when she sails on the voyage insured; and I have endeavoured, both with a view to the benefit of commerce and the preservation of human life, to enforce that doctrine as far as, in the exercise of a sound discretion, I have been enabled to do so.In a question of sea-worthiness the honest intention of the insurer is no answer.The fact of sea-worthiness must appear, otherwise the underwriter is discharged.It is not necessary to inquire, whether the owners acted honestly and fairly in the transaction; for it is clear law that, however just and honest the intentions and conduct of the owner may be, if he is mistaken in the fact, and the vessel is in fact not sea-worthy, the underwriter is not liable. And this,

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Though a vessel after sailing on the voyage insured encounters a storm and is damaged, unless the damage is such as can be fairly considered as the effect of the storm, the implied warranty is not complied with.First report. July 12, 1804.The ship sails, and appears to have been for two or three days in a violent storm. If so damaged as that the damage might be fairly considered as the effect of the storm, that is one view of the case. But if damaged in such a manner as in common probability she would not be if she had been sea-worthy when she sailed on the voyage, the implied warranty is not observed.On the ship coming into port she was surveyed by Scott and Steele, and, whatever Scott might say in 1812, it is clear that he and Steele, applying particular assertions to particular facts, upon this survey, stated that part of the timbers were decayed , and that the iron work, in general, was very much decayed and wrought loose; and they distinguished between that sort of decay and the damage which would have been produced from the effect of the storm alone; and no ingenuity can reconcile this with the construction attempted to be put on Scott's evidence in 1812. Steele states how he reconciles it with his second report, and his evidence goes to

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I do not say any thing as to the log-book; but cases have been sometimes decided on what is not given in evidence, as well as on what is given. If the captain was at the port when the survey was made in 1804, those who wish to support this demand against the underwriters, ought to have called him, and to have asked him “what do you say as to the state of the vessel at the time of this survey?”Having considered the whole of this evidence, I never was more clear about any thing than that it is proved to be perfectly manifest, and proved to my entire satisfaction, that this vessel was not seaworthy for the voyage when she sailed, whatever might then have been the opinion of the owners and carpenters who repaired her; and if the cause could have come, and had come here originally, I would have recommended to give costs to the underwriters.

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Judgment of the Court below reversed .Solicitors: Agent for Appellants, Campbell.Agent for Respondents, Berry.