C. A. 1905 GIBBON r. PEASE. COZENS-HARDY L.J. I am of the same opinion. The principle which governs this case cannot, in my opinion, be distinguished from that which governed the decision of the Court in the solicitor's case, Ex parte Horsfall (1), to which I referred in the course of the argument. In that case, as in this, there was a contract for the performance of certain work. There were things which were necessary for the completion of the actual deed of conveyance, which was what the parties bargained for, and though a custom was set up by the solicitor of a right on his part to retain drafts and copies of deeds and documents, the originals of which he was admittedly bound to deliver up, the Court decided that the client who had paid for them had a right to the possession of them. If one considers the matter from the point of view of the reasonableness of the custom set up, the argument seems to me to be entirely in favour of the building owner. What would be his position after the building was completed? plans, how is he to know where the drains, the flues, and many other things are? Is he bound to go to the architect and make a fresh contract with him with respect to every matter that arises relating to the structure? Counsel for the defendant were bound to admit that, if their view as to the retention of the plans is correct, there would be some sort of obligation on the architect for their safe custody; but that admission does not make the retention reasonable. In my opinion the decision of the Court of Exchequer in 1870 was right, and this Court ought to follow the ruling in that case. Unless he has the Appeal dismissed. Solicitors for plaintiff: Gibbon & Moore. (1) (1827) 7 B. & C. 528; 31 R. R. 266. A. M. [IN THE COURT OF APPEAL.] LAW GUARANTEE AND TRUST SOCIETY v. RUSSIAN Shipping-Mortgage of Ship-Mortgagors in Possession-Contract impairing the Security Charterparty for Carriage of Contraband of War-Debenture Trust Deed. Where mortgagors in possession of a ship entered into a charterparty by which she was chartered for the carriage of contraband of war to a port of one of two belligerent States, which would involve great risk of her capture by the other belligerent, and the ship was not insured against such risks: Held, that the mortgagees were entitled to a declaration that the charterparty was not binding on them on the ground that it impaired the security, although the ship had sailed with her cargo on the voyage under the charterparty. Collins v. Lamport, (1864) 4 D. J. & S. 500, followed. The Celtic King, [1894] P. 175, discussed. APPEAL by defendants from judgment of Channell J. in an action tried by him without a jury. The action was brought by the plaintiffs as mortgagees of three steamships called respectively the Heathbank, the Heathburn, and the Heathcraig, against the Russian Bank for Foreign Trade, the Heath Line, Limited, the owners of the steamships, and Messrs. Green, Holland & Sons, for a declaration that the plaintiffs were not bound by certain charterparties and bills of lading relating to the said ships and the cargoes then on board of them. The defendants, the Heath Line, Limited, were a company owning a line of steamships, whose memorandum of association empowered them to carry on the businesses of shipowners under the British flag, managers of shipping property, freight contractors, carriers of goods, wares, cattle, merchandise, mails, parcels and other things, and passengers and troops, by land or sea, or partly in one way and partly in the other, and to enter into such contracts in relation to any of the above matters as the company might deem expedient. The plaintiffs were the C. A. 1905 March 31. C. A. 1905 trustees of a debenture trust deed entered into by the defendants, the Heath Line, Limited, to secure the holders of debentures LAW of that company, by which the undertaking of the company, GUARANTEE and all its property, present and future, were assigned to the AND TRUST SOCIETY v. RUSSIAN BANK FOR plaintiffs, as a security for the payment of the debentures. By clause 1 of the deed the term, "the mortgaged premises," was stated to mean the steamships, Heathburn, Heathcraig, Heathford, Heathglen, and Heathbank, and other the property comprised in the deed and for the time being mortgaged to the plaintiffs. By clause 4 it was provided that, until the security became enforceable, and the trustees were in a position to enforce the same, the trustees should permit the company to hold and enjoy the mortgaged premises, and to carry on therein and therewith the business authorized by the memorandum of association of the company, and that, as regards the mortgaged premises other than the steamships therein before named, the deed should operate as a floating security, but so that the company should not be at liberty to create any mortgage or charge on the mortgaged premises ranking in priority to or pari passu with the security created in favour of the debentures. Clauses 6 and 7 provided that, when the security constituted by the deed became enforceable, the trustees might enter upon and take possession of the mortgaged premises, and that the security should become enforceable on the happening of each and every of certain events, among which was the breach by the company of any covenant or stipulation contained in the deed. Clause 24 provided (inter alia) that the company should, during the continuance of the security, carry on and conduct the business of the company to the greatest possible advantage, and should keep proper books of account, which were at all reasonable times to be open for the inspection of the trustees, that the company should, at all times during the continuance of the security, give to the trustees such information as they should require as to all matters relating to the business, or any afteracquired property of the company, or otherwise relating to the affairs thereof, that they should insure and keep insured such of the mortgaged premises as were of an insurable nature, including the vessels for the time being subject to the security, C. A. 1905 LAW AND TRUST v. RUSSIAN BANK FOR FOREIGN against loss or damage by fire to their full value in such office or offices as the trustees should appoint, and, as to the said vessels, under marine policies containing the ordinary conditions applicable to steamships with the usual collision clauses, and GUARANTEE should deposit all such policies with the trustees, and that, whenever required to do so by the trustees, they should insure the said vessels in such office or offices as aforesaid under proper marine policies against seizure, capture and war risks. Mortgages to the plaintiffs of the three steamers to which the action related had been duly executed in the statutory form and registered. At the time when the charterparties in question were entered into, and when the action was brought, Russia was at war with Japan. By charterparty dated September 16, 1904, and entered into between the agents of the defendants, the Heath Line, Limited, and the defendants, Messrs. Green, Holland & Sons, as agents for the charterers, the ship Heathbank was chartered for the carriage of a cargo of coals from Barry to Vladivostok at a freight of 40s. per ton, of which 30s. was to be payable in advance on signing bills of lading. On the same date a fictitious charterparty was also entered into between the same parties in identical terms, except that the port of destination was stated to be Manila and the freight to be 16s. per ton. By an agreement entered into by the parties to the charterparty of the same date it was agreed that, in consideration of a charterparty of the Heathbank for a voyage from Barry to Vladivostok at a freight of 40s. per ton (30s. per ton payable on signing bills of lading) being entered into at the time of signing the agreement, the charterparty of the ship for a voyage from Barry to Manila at a freight of 16s. already entered into should be thereby cancelled, and declared to be null and void, and the Heath Line's agents undertook to attach to the bills of lading an agreement to deliver the cargo at Vladivostok in accordance with the terms of the substituted charterparty. On October 15, 1904, the Heathbank was loaded with a cargo of coals, and a bill of lading was signed making the cargo deliverable at Manila, and on the same day an undertaking was given by the Heath Line's agents to deliver the coals at Vladivostok. It TRADE. C. A 1905 LAW GUARANTEE SOCIETY v. RUSSIAN BANK FOR appeared that the fictitious charterparty and bill of lading were drawn up in order that the ship might be announced as having cleared from Barry for a neutral port, so as to deceive the AND TRUST agents of the Japanese Government. Similar charterparties and sets of documents were made and executed between the same parties with regard to the steamers Heathburn and Heathcraig respectively on October 28 and December 7, 1904, with the exception that in their case the fictitious port of destination was Shanghai. The defendants, the Russian Bank for Foreign Trade, were the holders of the bills of lading for the coal. It was admitted that the coal was really intended for the Russian Government. FOREIGN The ships had cleared from Barry for Manila and Shanghai respectively, and at the time of action brought they were on their way with their cargoes of coal to Vladivostok, and had respectively arrived at Amoy, Manila, and Colombo. The ships were not insured against war risks of the character involved in the charterparties. It appeared that, at the time when the first charterparty was entered into, the premium for insurance against war risks in respect of vessels bound for Vladivostok with coal was from 25 to 30 guineas per cent., to insure at which figure would have left little or no profit on the charterparties; that the premium subsequently continued rising; and that early in January of the present year such vessels became practically uninsurable against war risks, Vladivostok being then strictly blockaded by the Japanese. On March 9, 1905, the plaintiffs, having become aware in February that the steamers were engaged in carrying contraband of war to Vladivostok, passed a resolution to the effect that the defendant company had committed breaches of the debenture trust deed by not carrying on their business to the greatest possible advantage, by not giving to the plaintiffs such information as they required as to all matters relating to the company's business, or otherwise relating to the affairs thereof, and by not insuring the vessels under proper marine policies against seizure, capture, and war risks, and that the plaintiffs did therefore enter upon and take possession of the mortgaged premises in accordance with the powers of the |