1. In this suit the plaintiffs are the firm of Visram Ebrahim & Co.; the first defendant is the owner and the second defendant the master of the steam-ship Hutton; and the remaining defendants are the members of the firm of Messrs. Finlay, Muir & Co., by which name it will be convenient to designate them collectively. The suit springs out of a charter-party of the Hutton, dated September 20, 1880, and signed by Finlay, Muir & Co. as agents for master and owners, whereby the Hutton was chartered to one Essa Ahmed for a term of not less than three or more than four months at Rs. 15,000. per month, payable fortnightly in advance, commencing at a future date which turned out to be either the 19th or 20th of October, 1880. By a, memorandum dated the 1'st December, 1880, the time was extended to between the 10th and 20th of March, 1881; and on the 25th February, 1881, by another memorandum it was further extended to the 30th of March, 1881; and by an endorsement on the charter-party dated October, 1880, the hire was made payable monthly in advance instead of fortnightly.
2. Under this charter-part matters appear to have gone on smoothly until the fifth month of its duration, when Essa Ahmed, who was engaged in sundry other transactions with Finlay, Muir & Co., and who has since filed his schedule in the Insolvent Court, ran short of money, and failed to pay the Rs. 18,000 hire for that month, when due. On February 27, 1881, the plaintiffs paid Finlay, Muir & Co. Rs. 12000 on account of this hire, and obtained receipt for the same. On the same day, Essa by writing of that date assigned to the plaintiffs the freight to be earned by the Hutton as a security for this advance, of which assignment he gave notice to Finlay, Muir & Co. by his letter of February 28. It had been intended that Essa should himself have paid the balance of Rs. 6,000 to Finlay, Muir & Co.; and on March 1 he, by his letter to that firm, bound himself to pay them, in connection with the amount due to) them for freight or hire of the Hutton and another steamer called the Clan Gordon and other small items not specified, Rs. 6,000 on or before March 7, and Rs. 3,000 before the completion of the loading of the Hutton in Calcutta, from which port she was to return 'to Bombay with cargo. However, Essa did not keep his promise, and was consequently pressed by Finlay, Muir & Co.
3. On march, 11, Essa, in company with the plaintiff Fazulbhoy Visram, came to Finlay, Muir & Co.'s office, and Fazulbhoy there by cheque of his firm paid a sum of Rs. 6,000, which Essa by his letter of that day secured in the same manner as the Rs. 12,000. Whether this sum of Rs. 6,000 was or was not appropriated at the time of payment to the hire due for the Hutton is the main question in this suit. A dispute on the subject between Finlay, Muir & Co. and the plaintiffs commenced on the day of payment. On March 31, Messrs. Payne and Gilbert, as plaintiffs' solicitors, tendered Finlay, Muir & Co. the sum of Us. 7,200 for the hire of the Hutton up to that day, and required, the steamer to be consigned to the plaintiffs. On the same day Finlay, Muir & Co. refused the tender as insufficient, and refused to allow the plaintiffs to take over the cargo and collect the freight unless the sum of Rs. 24,000 were deposited with them; and they ultimately returned the Rs. 7,200, as Messrs. Payne and Gilbert had requested them to do unless they would give a receipt in full. The Hutton arrived in Bombay on April 2; and her cargo was discharged and the freight collected by Finlay, Muir & Co., who placed her in the dock: the unloading was finished on April 6. Finlay, Muir & Co. afterwards rendered an account of their receipts and disbursements in connection with the Hutton (exhibit No. 2 to their Written statement), showing a balance of Rs. 33-4-6 due by them; they claiming to deduct from the freight Rs. 6,000 as the unpaid balance of hire for the fifth month of the charter-party, and also sundry items specified in the debit side of that account, some of which are admitted, others disputed by the plaintiffs.
4. The points in dispute in the suit may be summarized as follows:
1. Can the suit be maintained against any and which of the defendants?
2. From what date did the hire under the charter-party begin to run?
3. Was the Rs. 6,000 paid on March 11, 1881, appropriated to the hire of the Hutton?
4. Are the plaintiffs entitled to recover Rs. 40O as damages sustained by them through Finlay, Muir & Co.'s having refused to allow them to discharge the steamer and collect the freight?
5. Are the defendants entitled to credit for any, and which, of the items on the debit side of the account rendered by them, other than the said sum of Rs. 6,000?
1. With regard to the first defendant, the owner of the Hutton, it is not questioned that Finlay, Muir & Co. had authority to sign the charter-party on his behalf, and he is, therefore, properly made a party to this suit. The second defendant, the master, appears on the evidence to have given no authority to Finaly Muir & 'Co. to sign the charter-party as his agents; and I do not consider that his conduct in acting under the charter-party, which I is referable to his character of and duty as master; amounts to a ratification of that signature. The second defendant is, therefore, not liable on the charter-party. Still he comes here to assert his own interests in claiming to deduct, from the freight received in Bombay sundry sums which were paid either by him or by Finlay, Muir & Co. for him; and so far he is a proper party to the suit.
5. The position of the defendants, Finlay, Muir & Co., is more complicated. I do not think that they are liable as principals on the charter-party under Section 230 of the Contract Act by reason of their signature as 'agents for master and owners'; as they appear on the face of the charter-party to sign merely as agents, and the case is governed by, and indeed having regard to the language of the instrument is even stronger than the cases of Soopromanian Setty v. Heilgers I.L.R. 5 Calc. 71 per Wilson J. at pp. 78 and 79 and Mackinnon, Mackenzie & Co. v. Long Muir & Co. I.L.R. 5. Bom. 584 per West, J., at pp. 58.8-9. These cases agree with the English decisions of Fleet v. Murton 7 L.R.Q.B. 126 Wagstaff v. Anderson 5 C.P.D. 171 per Bramwell. L.J. 175 and Hutchinson v. Tatham 8 L.R.C.P. 482 per;-Bovill, C.J., 484, a charter-party case not unlike the present. Mr. Pollock at page 121 of his book on Contracts (3rd ed.) suggests a possible difference between the English and Indian law as to the liability of agents for an undisclosed principal: but I cannot consider the weight of his opinion as counter balancing that of the two Indian decisions above quoted, with which on the point now under discussion I entirely agree; nor does he seem to have considered the effect of the words 'shall be presumed to exist' or what evidence is sufficient to displace the presumption. But, although Finlay, Muir & Co. are not liable as principals on the charter-party, they are liable under Section 235 of the Contract Act for having untruly represented themselves to be the authorized agents of the master to enter on his behalf into the contract therein contained. This section is in accordance with the English law as established by Collien. Wright 7 E. & B., 301 and the other cases cited at Smith's Leading Cases (7th ed.), 'Vol.2', pp. 381, 382. I cannot think that any difference is made in their liability by the fact that the owner is also liable. The measure of damages in such a case is laid down in Simons v. Patchett 7 E. & B. 568. No doubt, according to that case, Finlay, Muir. & Co. are not liable for a greater amount than could have been recovered from the master if he had really been their principal. But in the present case the master has paid into Court the sum of Rs. 10,000 covering the outside amount of damages which plaintiffs seek to recover, and I see no reason for in any degree limiting Finlay, Muir & Co.'s liability to make good these damages.' Nor can I think that there is any ground for drawing a distinction between Finlay, Muir & Co.'s liability on the charter-par as it originally stood and as extended by the agreements of the 1st December, 1880, and the 25th February, 1881. I may add that, in my opinion, it would not have been difficult to frame the plaint so as to have made Finlay, Muir & Co. liable as principals at least for the Rs. 6,000, in respect of which sum they are in fact asserting a claim independently of the other defendants. But the plaint is not framed on this basis, anil I must deal with the plaintiffs' case as they have themselves shaped it
2. As to the date on which the hire under the charter-party began to run, I think that there can be no doubt but that it was October 19, 1880. The charterer accepted the vessel and began to load it on that day, and probably on the previous evening. The ship was not clear of inward cargo until the 19th, and under the charter-party he might have waited until after twenty-four hours' notice of her being so clear. But as he accepted the vessel and began to load her, I think that he must pay as from the commencement of such use.
3 The question of the appropriation of the Rs. 6,000 is the most important point in the case. Plaintiffs say that they specifically appropriated this sum at the time of payment to the hire then due for the Hutton. Defendants say that no such specific appropriation was made, and that in default thereof they, appropriated the sum to the hire due for the Clan Gordon. Either claim is warranted if the allegations made in support of it are established; that of the plaintiffs under Section 59 and that of the defendants under Section 60 of the Contract Act, which sections follow the English law. At the time of payment it was clearly the plaintiffs' interest to appropriate the Rs. 6,000 to the hire of the Hutton, as they were not concerned in Essa's after transactions with Finlay, Muir & Co., and were interested in freeing the Hutton from liability. It was equally the defendants' interest to appropriate the sum to the hire of the Clan Gordon which was unsecured, whereas that of the Hutton would, be covered by the freight on her incoming cargo. The plaintiffs Muir on exhibit M, a letter dated March 11 from Essa to Finlay, Muir & Co.; and that letter, if received by Finlay, Muir & Co. before the payment of the Rs. 6,000, is a clear appropriation of the money to the hire of the Hutton. The defendants' witnesses until a late stage of the case denied all knowledge of it prior to its discovery among the papers in their solicitors' office. But on the production of Finlay, Muir & Co.'s answer to exhibit M dated March 11, Mr. Wilson, of Finlay, Muir &Co.;, admitted that his firm must have received exhibit M on that day. He stated that he was still unable to remember the receipt of the letter or to give the time on March 11 when it was received, but that he was sure that he could not have received it before the Its. 6,000 were paid. It is in any case strange that Finlay, Muir & Co. should in their reply have taken no notice of the concluding paragraph of exhibit M; but, in my opinion, such absence of notice would be most strange if M were received after the dispute as to the appropriation of the Rs. 6,000 had arisen, which was within half an hour of the payment. Looking at the probabilities of the case, the strong motive which the plaintiffs had to get the letter delivered to Finlay, Muir & Co. before they paid the Rs. 6,000, and the direct evidence of Essa that it was so delivered (though he is not a witness on whose uncorroborated testimony I place much reliance).; and considering that on the other side defendants can only allege absence of recollection of the receipt of the letter, I must come to the conclusion that letter M was delivered to Finlay Muir & Co. before the Rs. 6,000 were paid, and constituted a valid appropriation of the money when paid. It is 'fair to say that I believe Mr. Wilson spoke the truth when he stated that he had no recollection of the receipt of M, and that he gave his evidence candidly; still defendants cannot well complain if the plaintiffs have doubted their straightforwardness on this point, having regard to their extraordinary carelessness as to a document of such vital importance in the case.
6. I should add that I do not think that the plaintiffs' case as to the appropriation of the Rs. 6,000 rests on the letter M alone. I am disposed to accept the plaintiff Fazulbhoy's account of the interview at Finlay, Muir and Co.'s to the extent, at least of his having stated that the Rs. 6,000 were paid for the hire of the Hutton. Essa is clearly not speaking the truth as to that interview when he deposes to Jamsetji's having written the receipt (exhibit N), which proved to be in the handwriting of Framji the cashier. But Fazulbhoy had strong motives to lead him to make this statement explicitly; he declared his intention to make such an appropriation within half an hour of the payment, no circumstance having occurred in the interval to account for any change of mind, by him in this behalf; and I much prefer his evidence to that of Jamsetji and Devidas. Again, I think that having regard to Mr. Wilson's evidence that 'it probably occurred to him that plaintiffs were under the impression that they were paying for the Hutton'; to the fact that plaintiffs had paid Rs. 12,000 expressly for the Hutton before; to Finlay, Muir & Co.'s knowledge that the freight of the Hutton had been assigned to the plaintiffs; and to the reference to the Hutton in Finlay, Muir's letter of March 10; the case is within Section 59 of the Contract Act as one in which the circumstances implied that the Rs. 6,000 were to be appropriated to the overdue hire of the Hutton. And, lastly, even if the appropriation by Finlay, Muir & Co. to 'account of outstanding freight' contained in their receipt, could be maintained, I think that the result would be the same. The balance of the Hutton's hire for the fifth month was 'an item in that account prior to the sum due for the hire of the 'Clan' Gordon, and under Section 61 of the Contract, Act the Rs. 6,000 would have to be applied to such prior item. It is clear law that a creditor cannot without the payer's assent alter an appropriation which he has once communicated to the payer: 2 Tudors Mercantile Law, page 22, and the cases the collected, and especially Bodenham v. Purchas 2 B. & Aid. 39, 45; Fraser v. Birch 2 Knapp 380, 389; and Bank if Scotland v. Christie 8 C. & F. 214, 228, per Lord Cottenham.
4. As to the damages of Rs. 400 claimed by plaintiffs as the amount of commission lost to them by Finlay, Muir & Co.'s refusal to allow them to collect the freight of the Hutton in Bombay, I cannot but disapprove of Finlay, Muir & Co.'s reluctance to state plainly the amount which they claimed as due for the Hutton, and the preposterous charge of Rs. 24,000 Which they ultimately made. Their conduct was such that I doubt if the insufficiency of the tender of Rs. 7,200 would have prevented my giving the plaintiffs these damages if I were convinced that they had sustained them. But I am not so convinced. Plaintiffs have charged Essa Ahmed with this commission in their account with him, where it is stated at Rs. 408-4-6; and there is no evidence that Essa has disputed the correctness of this charge. Very possibly he could not do so, having regard to the terms of the assignment and to his own default in payment of the amount thereby agree to be paid by him to Finlay, Muir & Co. Of course, I cannot in this suit decide the rights of the plaintiffs as against Essa Ahmed; it is sufficient to say that they themselves treat the amount as due from him, and are not proved to have suffered these damages.
5. Before deciding as to whether the defendants are entitled to credit for any and which of the items on the debit side of the account annexed to Finlay, Muir & Co.'s written statement, the credit side of which account is admitted by the plaintiffs, it is necessary to examine the plaintiffs' position under their assignment from Essa Ahmed. The charter-party is, in my opinion, one of the class known as' locationavis et operarum magistri' Maclachlan on Shipping (2nd ed.), 322 and under such a charter-party the master would, as between the owner and the charterer, sign bills of lading as agent of the charterer: Schuster McKellar 7 E. & B., 704, 723, per Lord Campbell. This is made still clearer in the present case by the words of the charter-party' Bills of lading are to be signed at any rate of freight the charterer or his agents may require... . The charterer hereby indemnifies the owner from all consequences or liabilities that may arise from the captain's doing so.' I do not mean to say that by a charter-party in this form the owner's possession of the ship is divested so as to oust his lien, or that he is not liable to persons who hare consigned goods by the steamer in ignorance of the charter-party--Sandeman v. Scurr 2 L.R.Q.B. 86 Cockburn C.J. or even to the charterer in respect of the unskillful navigation of the ship, Omoa Coal and Iron Company v. Huntley 2 C.P.D. 464. But I think that, as between the owner and the charterer, the charterer is liable to defray not merely the expenses specified in clause three of the charter-party, but also the damages for non-performance of the contract contained in the bills of lading, including damages for short delivery of cargo. I am much disposed to believe that Essa Ahmed did expressly agree to be liable for such damages for short delivery before the first voyage under the charter-party; but it is unnecessary to decide this, as I think that he was so liable independently of any express agreement. Then Essa's liability being as above stated, I think that the plaintiffs, as assignees from Essa of the freight, a chose in action, are bound by all the equities affecting Essa himself, so that the defendants may set off as against the plaintiffs whatever the owner of the Hutton might have set off against Essa if he had been the plaintiff: Pollock on Contracts (3rd ed.), 229, 230 Mangles v. Dixon 3 H.L. Ca. 702 Lord Cottenham. The plaintiffs are of course entitled to proof that the items are due as from Essa to the defendants.
7. The first item of Rs. 6,000 has been already disposed; of, and must be disallowed. Taking the other items seriaim, I think that the defendants must be allowed Credit for.
8. Rs. 11,400,'freight from March 19 to April 6,1881.
Rs. 660 for 40 tons of coal.--I see no reason to disbelieve the engineer's evidence as to this item, and the alterations on his log-book so far as decipherable seem to be to the plaintiffs' benefit.
' 32 6 5 for victualling bill.
' 25 0 0 for extra preventive work.
' 651 1 6 for stevedore.
' 305 6 0 for dubash.
' 10 0 0 for hire of chronometer. These three last items
have not been seriously objected to 49 12 9 for advertisements.
9. 126 3 6 for dock dues. I think that the master was justified in taking the steamer into dock, her papers not having arrived from Calcutta, and no special directions as to the place of discharge having been given by Essa or the plaintiffs. But I can only make oat four days spent in discharging cargo, viz., from April 3 to April 6 inclusive.
10. There remain the amounts paid in respect of short delivery of cargo. I have already said that Essa was liable to pay for any such short delivery. But I cannot admit that the master had power to bind Essa by making such payments on his behalf in Bombay, where both Essa and the plaintiffs were resident, without the consent of either Essa or the plaintiffs. I do not find that the text books treat the master as having such authority--Kay on Shipmasters and Seamen, Vol. I, p. 446; and the principles laid down in Gunn. v. Roberts 9 L.R.C.P. 331 seem to me against his possessing it. I think that, in order to establish these charges against Essa and his assignees the plaintiffs, the defendants must prove either that they were in fact due, in which case the master would be justified in paying them under Section 69 of the Contract Act, or that their correctness has been admitted by Essa or his agents.
11. Now the defendants have failed to produce any proof that these sums were really due, and have only produced the authority of Essa's agents at Jedda and Aden respectively for two items--those of Rs. 60 for 10 bags of dhal and Rs. 160 for 2 bales of tobacco. These two items I allow and also that of Rs. 112 paid to C.J. Khumbatta & Co. in respect of the expenses of the transshipment of cargo in Bombay incurred contrary to the terms of the bill of lading, as such expenses were occasioned by the delay of the Calcutta agents of Essa and the plaintiffs in forwarding the Hutton's papers. The remaining items I am compelled in the absence of legal proof to disallow, though not without regret, as I have little doubt but that they were really due.
12. I find upon the issues as follows:
1. The plaintiffs are entitled to maintain the suit against the second defendant in respect of those items in the account annexed, to the written statement of Finlay, Muir & Co. which are alleged to have been paid by him or on his behalf.
2 and 3. Finlay, Muir & Co. had not such authority, and the charter-party is not binding on the second defendant as a party thereto.
4. The plaintiffs are entitled to maintain the suit against defendants 3, 4 and 6. The name of defendant 5 has been struck out by consent.
5. The hire of the steam-ship Hutton commenced on October 19, 1880, and the Rs. 18,000 in the fourth paragraph of the plaint mentioned were due for the month ending March 18, 1881.
6. The Rs. 6,000 in the tenth paragraph of the plaint mentioned was received on account of the first defendant.
7. The defendants, Finlay, Muir & Co., were so justified.
8. The plaintiffs are not entitled to the sum of Rs. 400 in the 17th paragraph of the plaint claimed, or any part thereof.
9. Those items only on the debit side of the account No. 2 annexed to the written statement of defendants, Finlay, Muir & Co. which have been above mentioned in that behalf, ought to be disallowed as against the plaintiffs.
10. The plaintiffs are entitled to the relief hereinafter granted.
13. And I pass judgment for the plaintiffs for the sum of Rs. 6,928-14-1 and costs, and interest at the rate of 6 per cent. On the amount of judgment as against the defendants., other than the second defendant.