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Decisions of the Superior Courts of New South Wales, 1788-1899

Simmons v. Abrahams (1842) NSW Sel Cas (Dowling) 941; [1842] NSWSupC 74

ship registration - ship, title to

Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 1 December 1842

Source: Dowling, Select Cases , Vol. 6, S.R.N.S.W. 2/3464, p. 324

A ship had been wrongly registered in Sydney, as it had a prior registration in Malta, and the registration in Sydney was void. The purchaser of a half-share of the vessel could not claim recovery of the purchase price on the basis of the defective certificate of registry, having received a partial benefit from two years of trading by the ship after he had purchased his interest in it.*

Assumpsit for money had and received by defendant to plaintiff's use. Plea non assumpsit. The declaration contained a special count for a breach of warranty - that a particular vessel bought by plaintiff off defendant was at the time of sale entitled to a British Registry, but this count was abandoned, although the case turned afterwards mainly on the alleged warranty.

At the trial before Stephen J. and two assessors in August last it appeared in evidence that a vessel called the Caroline having been built and registered at Malta, and thereby disentitled by the Ship's Registry Act 3 & 4 Wm 4 c. 55 s. 3 (1833) to a registry de novo, as a British ship, had in fact been so registered at the port of Sydney by the Collector of Customs as the property of the defendant, who sold to the plaintiff one half thereof by bill of sale dated 24 April 1840 to the following effect, viz: "I Abraham Abrahams in consideration of £1,800 paid by Isaac Simmons do sell to the said Isaac Simmons 32/64 shares of the Caroline , with her appurtenances, which said vessel has been duly registered pursuant to act of Parliament, and a copy of such certificate of registry is as follows" - Then there was inserted the copy of her certificate of her British Registry, by which the defendant appeared to be the sole owner. The certificate recited and set forth "that the vessel was built in the Island of Malta in 1803 as appears by a certificate of registry granted at Malta 21st September 1833 now delivered up and cancelled". Following this, was a covenant on the part of the defendant in these terms - and I the said Abraham Abrahams do covenant to and with the said Isaac Simmons his executors &c that I have good right full power lawful and absolute authority to bargain and sell the said thirty two parts to him free from all and every incumbrance"; and finally there was a receipt by the defendant for £1800, the consideration money.

The fact of the vessel having been registered de novo as a British ship becoming known to the Board of Customs in England, they sent out directions to the Collector of Customs in Sydney to cancel her registry and call in her certificate. Nearly two years had in the meantime elapsed, and the plaintiff who had attained possession had either for his own benefit, or for the benefit of the defendant, or for their joint benefit traded with the vessel, he being all the time in possession or having the control over the certificate of her registry. On receipt of instructions from England, a demand was made by or on behalf of the Collector of Customs, of the plaintiff to deliver up the certificate of registry, and it was delivered up accordingly, which, together with the registry were cancelled; whereupon the plaintiff brought the present action to recover back the purchase money, as for money paid under a void deed, or on a consideration which had failed.

It was contended in support of the action that if the bill of sale was not absolutely void, at all events the transfer intended by it was void, inasmuch as the statute required the certificate of registry to be truly recited in the bill of sale, where as the only certificate of registry - that is valid certificate of registry - which she possessed or could be entitled to, was the Maltese certificate of registry and that not being recited and the de novo registration being wholly illegal, or at least ineffectual, no property passed and the transfer was inoperative. It was proved by the ship's agent, who was also agent for the defendant, that since the transfer to the plaintiff of the 32 shares, the vessel had traded to port Phillip and back, and also to the East Indies. Her last voyage was to Batavia. The agent used to clear her out of Sydney by the plaintiff's instructions, and for the last two or three voyages the plaintiff had acted as ship's husband. The defendant was not resident at Sydney, but at Phillip. Since the certificate of registry had been given up at the instance of the Collector of Customs, the plaintiff had not meddled with the vessel. The vessel had in fact been trading under her certificate of British registry ever since September 1839. Proof was given of the demand of the £1,800 paid by the plaintiff to the defendant.

On the part of the defendant it was contended for a nonsuit that assumpsit would not lie, for although the transfer might be void by the Registry Act yet the deed was still in force, and that the plaintiff had his remedy on the covenant for title. The learned Judge reserved the question whether the action for money had and received would lie, and he directed the assessors to find for the plaintiff subject to that question, for the amount of the consideration money if they believed it to have been paid on two grounds, first, that the transfer was void, and secondly that the consideration for the transfer had failed. The assessors refused to find such a verdict. They said they thought the case so hard on the defendant, that he should be called upon to pay back the whole money and depreciation in the present value of the vessel, and notwithstanding any profits which might have been made by the plaintiff and they felt themselves bound to find a general verdict for the defendant.

The learned Judge told the assessors that the plaintiff's rights depended upon the question whether the action would lie; not if the action did lie in point of law. It would be unjust as well as illegal to deprive him of his rights, and he desired them to leave that question for the consideration of the Court. The assessors declined to find a verdict - excepting on the special terms which were then framed as follows: "We find for the defendant. We find that the sum of £1,800 was paid by the plaintiff to the defendant as the consideration for the transfer intended to be carried into effect by the bill of sale produced. We further find that from the time of that payment the plaintiff has used and traded with the vessel, but whether for his own benefit alone, or jointly with the defendant we have no evidence to decide; and we find for the plaintiff the said sum of £1,800 if the Court shall be of opinion that the plaintiff is in law under the circumstances entitled thereto". The learned Judge declined to take this in the proper sense of a special verdict, not being settled and signed by Counsel, but reported the finding as it was delivered by the assessors. [The arguments of counsel are then set out].

Dowling C.J. We have fully considered this case. The true point for determination is whether the plaintiff may maintain an action of assumpsit for money had and received under the circumstances disclosed in this case. We do not feel ourselves at all fettered by the special finding of the assessors who in disregard of the learned Judge's directions, took upon themselves to deliver a verdict in terms beyond the scope of their authority. The learned Judge directed them, as he had a right to do, to find a general verdict for the plaintiff (if they believed the facts), subject to the question, in point of law, whether the action was maintainable. It is no part of the province of assessors or of a jury to control the presiding Judge in the discharge of his duties. If this were permitted it would infallibly bring trial by "the country" into disrepute, and disturb the appointed order for the due administration of the functions of a court of justice. The objection is not, in the present instance, that a different result is arrived at, for as we think the defendant in point of law entitled to our judgment, the result will practically be the same. But this result is accidental. The verdict on the principles on which it was professedly founded was quite as much likely to have been erroneous; and we should, in that case, have been compelled to set it aside. The principle of our objection is, that on a point merely of legal right, a tribunal confessedly incompetent to determine that question, and indeed not professing or seeking to determine it, declines to leave its decision to the competent and constitutional authority, and rashly risk the violation of that right, in a desire, laudable enough, under other circumstances, of resisting what that tribunal deems, on principles of its own creation, a harsh or unjust demand.

But in a court of law it is on men's legal rights that the jury as well as the judges are sworn to adjudicate. Could these be disregarded or set aside to accommodate varying notions of harshness or loose and unified ideas of equity, neither liberty, nor property, nor character would be secure; and men's rights, which at present depend on the law and are upheld by an unbending and righteous administration of the law would cease to exist except in name. We cannot, therefore, too emphatically express our disapproval of the course pursued on the late occasion. If the assessors had chosen, in their honest belief that they knew the law, though such was not their province, they had the power, but not knowing, nor affecting to know the law, it was their duty to have left the point in controversy to the Court as they were desired to do. Nothing can be more true - or in the administration of justice more important to bear in mind - than the observation of the Judge at the trial - that that to which the law of the land in any case entitles a litigant, it is not for a jury, under any circumstances to deny him.

We are now to regard this case as if the assessors had respectfully acquiesced in the course lawfully prescribed by the learned Judge, and had found a verdict for the plaintiff, subject to the legal question reserved for consideration, which should determine the right of action one way or the other.

We are of opinion under the circumstances of this case on principle and on authorities that this action of assumpsit for money had and received is not maintainable, and that it was a fit and proper case for a nonsuit on the objections raised at the trial. We do not mean to say however, that the learned Judge was bound to nonsuit; or otherwise declare the opinion of any then formed by him. The Judge has a clear right, in all cases, to reserve it, whenever he conceives the case to be of a nature to render further discussion desirable. Such a course may indeed, occasionally be expedient on other grounds.

It is perfectly true that by the 3rd section of the Ship's Registry Act , 3 & 4 Wm 4 c. 55 a ship which has been registered at Malta (which this was) "shall not be registered elsewhere". It is also true, that notwithstanding this prohibition, the Collector of Customs in the port of Sydney, granted this vessel a fresh certificate of registry reciting the very fact, not only that she had been built at Malta, but that she had obtained a certificate at that Island on the 21st September 1833; and it is also true that in the bill of sale executed by the defendant to the plaintiff the new certificate of registry is fully recited. So far, in terms, the defendant has complied with the 31st section of the Registry Act and without any default in either party the transfer has been defeated by the Act of the Collector of Customs by compelling the registration and certificate which had been previously made and granted by him in the form of an act of Parliament, and with full knowledge of the incapacity of the vessel to obtain registration de novo.

The question does not here arise, by what authority the Collector called upon the plaintiff summarily deliver up the certificate of registry to be cancelled. The plaintiff appears to have yielded to the demand without resistance and he now seeks to treat the whole transaction as void and recover back the purchase money as upon a contract the consideration for which has wholly failed. Admitting it to be clear that this bill of sale may be absolutely void both in law and in equity, as a transfer by reciting a certificate of registry which this, as a Maltese vessel had no right by law to obtain, yet it does not appear so clear to us that the bill of sale is so utterly inoperative as evidence of a contract, as to exclude the Court from testing the plaintiff's right of action for money had and received, as upon a void contract, and disregarding those principles applicable to contracts capable of being sustained in a court of justice.

Be it that this vessel had really no right to a registry de novo in this port, having been previously registered at Malta, still the defendant has literally complied with the terms of the 31st section, by truly reciting her previous registry. In this point of view this case is distinguishable from the cases on the old Registry Act , Biddell v. Leeder (1823) [ Biddel v. Leeder & Pullham (1823) 2 Dowl. & Ry. 499 ] and Mortimer v. Fleming (1823) [ Mortimer v. Fleming (1823) 6 Dowl. & Ry. 176 ] where the Act had not been complied with at all. In the first of those cases the plaintiff sought to enforce an agreement for the sale of a share of a vessel with a present interest therein, though the purchase money was to be paid with interest at a future time, and the agreement was held to be void on the old statute for not reciting therein the certificate of the ship's registry.

In the second, all that was held was that an executory contract for the sale of a ship was within the 34 Geo. 3 c. 68 s. 15 (1794) and void if not indorsed upon the certificate of the ship's registry. It is at least very doubtful whether the present is not casus omissus in the Act, and whether it comes within the mischief contemplated by the legislature. Non observance if not ignorance of the law upon the subject of this vessel may be affirmed not only of both plaintiff and defendant but of the Collector himself. All parties indeed seem to have disregarded the disqualification of the vessel to obtain a new registry. The plaintiff had at all events as much knowledge upon the subject as the defendant. He must be as much presumed to know the law as the defendant. He pays his money to the defendant, with full knowledge of all the circumstances - he is let into beneficial possession of the vessel for two years, and at the expiration of that time, on the simple requisition of the Collector he, without a struggle, gives up the certificate of registry - then seeks to rescind the contract and recover back his money in assumpsit as upon a total failure of consideration.

The question is whether under such circumstances this form of action can be maintained? The cases of Hunt v. Silk (1804) [ Hunt v. Silk (1804) 5 East. 449, 102 E.R. 1142 ], Giles v. Edwards (1797) [ Giles v. Edwards (1797) 7 T.R 181, 101 E.R. 920 ] establish the general principle that the plaintiff instead of making his stand as he might have done, in seeing that the bill of sale was conformable to law paid his money and was let into possession in pursuance of the contract after that he could not maintain this form of action. A party who has had a partial benefit of contract cannot rescind it and bring assumpsit for money had and received. This was the principle on and which Taylor v. Hare (1805) [ Taylor v. Hare (1805) 1 B. & P. N.R. 259, 127 E.R. 461 ] was decided, where the plaintiff paid an annuity for the use of a patent invention, which turned out not to be new, and therefore became void and it was held that the plaintiff could not recover the consideration originally paid.

The case of Beed v. Blandford (1828) [ Beed v. Blandford (1828) 2 Y. & J. 278, 148 E.R. 924 ] is a very strong authority for the same position, and the principle of it is pointedly applicable to the present case. That was an action of assumpsit for money had and received to recover money paid by the plaintiff to defendant as the consideration for the purchase of the moiety of a vessel, the plaintiff having been let into possession, upon the ground that the contract had been rescinded in consequence of the defendant refusing to execute a bill of sale, or refund the money. In delivering the judgment of the court, Alexander CB said "In order to sustain an action in this form, it is necessary that the parties should, by the plaintiff's recovering the verdict, be placed in the same situation in which they were originally before the contract was entered into. The plaintiff has by his intermediate occupation derived the profits of the vessel; if he has not, he might have done so; and it is impossible to say what the defendant might have made had he, during the time had any control over it. Under these circumstances, it cannot be said, that the situation of the parties has not been altered; and that by the plaintiff's recovery in this action, their original position may be restored".

Hutton B. was of the same opinion and said he could not distinguish the case from Hunt v. Silk . Vaughan B. said "The decision in Hunt v. Silk lays down a very clear and just rule in these cases: if the circumstances be such that by rescinding the contract, the rights of neither party are injured, in that case, if one contracting party will not fulfil his part of the engagement, the other may rescind the contract, and maintain his action for money had and received to recover back what he may have paid upon the faith of it. Giles v. Edwards does not impeach this doctrine for there the parties were restored to their original situation".

It may be, in the present case, that Simmons was only a part owner and that he had not the whole profit of the ship's earnings, but he was clearly let into possession, and traded with her and at all events became entitled to annuity of her earnings, great or small, and he also had the possession of the certificate of registry until he himself delivered it up to be cancelled. The case of Gascoyne v. Smith (1825) [ Gascoyne v. Smith (1825) M'Cle. & Yo. 338, 148 E.R. 443 ] is another still stronger authority in principle for holding that this action is not maintainable, for it goes to hold that where a party had given a promissory note as the consideration for the purchase of a share of a ship from the payee, without observance of the provisions of the Ship's Registry Acts and though the contract of sale was void, yet as the maker had recognized it by paying interest thereon and as there was a presumption that he had received the subsequent earnings of the share in question, and therefore of a consideration pro tanto, it was held, that the plaintiff, an indorsee, who took the note, though of old date, without inquiry, was entitled to recover the amount against the maker.

This case shows that though a contract of sale of a vessel, not conformable with the provisions of the Registry Act , may be void as against the policy of the Act, yet it is not so utterly void as to destroy the relations between the parties thereto, and prevent the enforcement of collateral liabilities arising out of the contract. In that case it might be said that there was a failure of consideration for the note, because the defendant never got anything but a contract which was void by the Registry Acts, but inasmuch as he had subsequently recognized the note, and there was a presumption that he had received his share of the ship's earnings, yet he was still liable on his note, notwithstanding the supposed failure of consideration. This case is only illustrative of the principle that though the transfer here may be void both in law and in equity, yet as the plaintiff has derived a partial benefit from it, by taking possession and trading with the vessel, partly at all events for his own benefit, and with full knowledge of the circumstance, and with patent notice of the infirmity of the transfer by reason that the ship was not entitled to a registry de novo, he is not in a condition to bring this form of action.

The case of Bree v. Holbech (1781) [ Bree & Holbech (1781) 2 Dougl. 655, 99 E.R. 415 ] is a strong authority for holding that without fraud, a mere warranty by deed of a false fact will not render a party liable to an action to recover back the consideration paid in an action for money had and received. There, a personal representative having found among the papers of a deceased person a mortgage deed purporting to be a genuine security given to his testator, assigned the same for valuable consideration to the plaintiff and in the deed of assignment affirmed that it was a mortgage made or mentioned to be made between the mortgagor and mortgagee for that sum; and it was held that the assignees could not recover back the mortgage money, although it turned out that the mortgage was a forgery, and that the assignee did not discover the forgery till within five years before he brought his action unless the assignees knew it to be a forgery.

That case, however, does not decide that even if the assignee knew it to be a forgery assumpsit for money had and received would have been the proper form of action, for there was not only a covenant, but the assignee had the benefit of the assignment such as it was for six years before the forgery was discovered. That case went off upon the question of fraud, on demurrer to the replication and Lord Mansfield said "Here everything alleged in the replication may be true without any fraud on the part of the defendant. He is an administrator with the will annexed, who finds a mortgage deed among the papers of his testator, without any arrears of interest, and parts with it bona fide as a marketable commodity. If he had discovered the forgery, and had then got rid of the deed as a true security, the case would have been very different. He did not covenant for the goodness of the title, but only that neither he nor the testator had incumbered the estate. It was incumbent on the plaintiff to look to the goodness of it".

The only case which seems to militate against the principle on which we are bound to hold this action not maintainable is Cripps v. Read (1796) [ Cripps v. Reade (1796) 6 T.R 606, 101 E.R. 728 ]. There a lease was sold to the plaintiff by the defendant as administrator, without any regular assignment, or other conveyance; but at the time of the sale the defendant said, that the premises were his property, to do as he liked with, and if anything happened he would see the plaintiff righted. Afterwards the defendant's letters of administration were repealed, and the plaintiff was turned out of possession by a recovery in ejectment at the suit of the new administrator; whereupon the plaintiff brought an action for money had and received against the defendant to recover the consideration paid for the lease; and it was holden that it would well lie; Lord Kenyon in observing that he did not wish to disturb the rule of caveat emptor, adopted in Bree v. Holbech and in other cases where a regular conveyance was made, to which other covenants were not to be added; for in general the seller covenanted for his own acts, and for those of his ancestors only, in which respect the case of a mortgage differed from it, as a mortgagor covenanted, that at all events he has a good title; but here the whole passed by parol and it proceeded on a misapprehension by both parties that the defendant was the legal administrator of the lessee, though it turned out afterwards that he was not. "As therefore the money was paid under mistake, he thought that an action for money had and received would lie to recover it back. In the case of Bree v. Holbech no action at all could have been maintained".

Now the case of Cripps v. Read is obviously distinguishable from this. There the action was held to lie, because the money was paid under a mistake. The representation was also by parol. There was no regular conveyance. The plaintiff could not know that the defendant had no title to sell the lease. He was not in any way put upon inquiry. Here the contract is by deed - by regular conveyance - the bill of sale recites that which turns out to be an infirmity in the transfer - the plaintiff is informed of it - he is put upon inquiry - and he was as much bound to know the law as the defendant - he adopts the contract - enters into possession of the vessel and of her certificate - trades with her, and must be presumed to have derived some benefit from the contract. The extent of the benefit is immaterial; he had at all events the opportunity of deriving benefit from it. The case therefore comes within the principle of Taylor v. Hare , that where a party has received a benefit from a thing which he has purchased though the subject of it may turn out to be of no value, he cannot in money had and received recover the consideration originally paid. Here the plaintiff with full knowledge of the facts on which the law arises, and which law he must, according to all authority be presumed to know, adopts the contract, and having derived a benefit from it, it is too late to repudiate, and seek to redress in this form of action.

We are not called upon to decide whether the covenant contained in the bill of sale be or be not an independent covenant, nor is it necessary to go into the learning applicable to dependent and independent covenants in a deed. It is enough for us to determine whether the present form of action is maintainable. The case, however, it may be observed, is somewhat distinguishable from that of Kerrison v. Cole (1807) [ Kerrison v. Cole (1807) 8 East. 231, 103 E.R. 330 ], which was that of a mortgagor of a ship, who was held liable on a collateral covenant for the payment of the money mentioned in the deed, even though the deed itself was void, for transferring the property in the ship for not reciting the certificate of registry. Here assuming the covenant to be independent, all that the defendant undertakes is, that he has good right, full power, lawful and absolute authority to bargain and sell in manner aforesaid and that the vessel and her appurtenances are free from all and every incumbrance. It may be a question whether this is anything more than a mere covenant for the goodness of the title in him, free from any lawful prior pecuniary incumbrance on the vessel, quite irrespective of her being entitled to registry de novo as a British ship. As a dependent covenant this would follow the fate of the transfer, but as an independent covenant Kerrison v. Cole might be argued as an authority for holding the defendant liable upon it notwithstanding the infirmity of the transfer. But on this point we pronounce no opinion.

Upon the sole point raised for our determination, we think that under the circumstances of this case, assumpsit for money had and received is not maintainable and judgment must be entered for the defendant.

Published by the Division of Law, Macquarie University