1903 AYLING, In re. MURRAY & Co., Ex parte. Wright J. the execution to the official receiver, but the costs of the execuENGLISH & tion shall be a first charge on the goods or money so delivered, and the official receiver or trustee may sell the goods, or an adequate part thereof, for the purpose of satisfying the charge." Now here on March 12 last year there was a fi. fa., and possession was kept by the sheriff till May 29, that is, nearly two months and a half, at the direction of the creditor and with the consent of the debtor, that consent being given from the very first. On May 8 the creditor instructed the sheriff to sell. On May 16 a receiving order was made against the debtor on his own petition, and notice of it was served by the official receiver on the sheriff, and on May 29 the official receiver told the sheriff to withdraw. The sheriff claims possession money from March 12 to May 29. The taxing officer has held that the sheriff is only entitled under the section to have a charge on the goods or their proceeds for twenty-one days after possession taken, a period which ends on April 3, there having been an act of bankruptcy on completion of the twenty-one days. It seems to me that the costs of keeping possession, after the proper time for sale or other completion of the execution, are not costs of the execution as against a creditor unless the creditor has consented to the prolongation of the possession. Clearly, in an ordinary case, a mere belief on the part of the sheriff that the creditor has consented to the prolongation of the period of possession is not sufficient to entitle the sheriff to charge the judgment creditor with the costs of the prolonged possession. Now here I think the case must be treated as if, at the date to which the title of the subsequently appointed trustee in bankruptcy related back, the trustee became the creditor by operation of law. He must now be regarded as having then become, as it were, the creditor, and he never consented to the sheriff continuing in possession. I think, therefore, that as against him the costs of the prolonged possession are not "costs of the execution" within the meaning of the section. I think the sheriff's remedy, if any, is against the actual judgment creditor, for whose benefit, or at least at whose request, the expense has been incurred. The remedy is not against the estate, which has not been benefited in any way by the prolonged possession. I think, therefore, that the taxing officer was in substance right. The motion must be dismissed with costs. Solicitors for sheriff: Parker, Garrett & Co. Solicitor for trustee: Solicitor to the Board of Trade. H. L. F. 1903 ENGLISH & MURRAY & Co., Ex parte. [IN THE COMMERCIAL COURT.] SHILLITO v. BIGGART AND ANOTHER. Ship-Mortgage-Mortgagee taking Possession-Right to Freight previously A mortgagee of a ship is not entitled to unpaid freight which became due previously to the date of his taking possession of the ship. INTERPLEADER ISSUE tried in the Commercial Court. In October, 1900, Woodruff, Shillito & Co., the owners of the steamship Craigearn, executed a statutory mortgage of the vessel in favour of Biggart & Fulton. In August, 1902, the owners being in default as mortgagors, Biggart & Fulton as mortgagees procured the arrest of the vessel at Hull in a mortgage action in the Admiralty Court. A decree in that action was pronounced in the mortgagees' favour in December, 1902, and under that decree the vessel was sold. After allowing for the receipt by the mortgagees of the purchase-money (less expenses of sale) and of the balance of freight earned on the homeward voyage (then in court), there still remained a balance of 1000l. due to the mortgagees. Previously to the date of the arrest of the vessel, namely, on June 17, 1902, there had become due to the owners from Cory Brothers as charterers, or from the Brazilian Coal Company as consignees of cargo, a sum of 5271. 9s. 11d., balance of freight in respect of the vessel's outward voyage from Cardiff to Santos. At the date of the arrest this sum was still unpaid. It was claimed by Biggart & Fulton as mortgagees in possession, and by Edwin Shillito as assignee for good consideration of Shillito, 1903 March 4, 9. 1903 SHILLITO v. BIGGART. Woodruff & Co., under an assignment dated November 24, 1902. Cory Brothers and the Brazilian Coal Company interpleaded, and it was ordered that an issue should be tried, in which Edwin Shillito was plaintiff and Biggart & Fulton were the defendants, to determine the property in this unpaid balance of freight. J. A. Hamilton, K.C., and Lochnis, for the plaintiff. A mortgagee of a ship on taking possession is only entitled to receive unpaid freight which has been or will be earned on the voyage during which he takes possession. Any freight earned previously to that voyage, though unpaid at the date of taking possession, remains the property of the mortgagor. In the present case the mortgagees have rightly received the freight earned on the homeward voyage, but they are not entitled to be paid this balance of freight which had been earned on the previous outward voyage, and which was due, though unpaid, at the date when the mortgagees took possession. The issue should, therefore, be determined in favour of the plaintiff as assignee of the owners: Chinnery v. Blackburne (1), Keith v. Burrows (2); Liverpool Marine Credit Co. v. Wilson (3); Collins v. Lamport. (4) Pickford, K.C., and Joseph Hurst, for the defendants. A mortgagee of a ship by the act of taking possession succeeds to all the rights of the owner, and, therefore, if he intervenes at any time before the freight has been paid, he is entitled to receive the outstanding freight, although it may in fact have become due previously. The law on this subject is thus stated in Robbins and Maw on the Law of Mortgages, p. 266: “It was formerly considered that the mortgagee could not recover freight already earned previous to his taking possession; but the rule now appears to be settled that the mortgagee on taking possession is entitled to all freight then unpaid, whether previously earned or not." This statement of the law is borne (1) (1784)1 H. Bl. 117, n. ; 2 R. R 721. (2) (1877) 2 App. Cas. 636. (4) (1864) 4 D. J. & S. 500. out by the authorities: see Rusden v. Pope (1); Brown v. Tanner (2); The Benwell Tower (3); Japp v. Campbell. (4) A mortgagee of land on taking possession can recover all back unpaid rents as well as the rents then accruing, and a mortgagee of a ship is in an analogous position with regard to unpaid freight: Wilson v. Wilson. (5) Hamilton, K.C., in reply. In all the cases cited for the defendants the freight claimed was being earned on the voyage during which possession was taken by the mortgagee, and any observations in these cases apparently enlarging the rights of the mortgagee are merely dicta. Cur. adv. vult. March 9. WALTON J. read the following judgment:-In this interpleader issue the question is whether a sum of 5271. 9s. 11d., which is in court, is the property of the plaintiff or of the defendants. The sum in question is a balance of freight which became due from the Brazilian Coal Company, Limited, to Woodruff, Shillito & Co., who were the owners of the steamship Craigearn, in respect of the carriage of a cargo of coals to Santos by such steamship. This balance of freight was earned and became due and payable on June 17, 1902. The plaintiff claims it as the assignee of the shipowners, Messrs. Woodruff, Shillito & Co. The defendants dispute his claim, and contend that they are entitled to the money in question as mortgagees of the steamship by a mortgage dated October 11, 1900. After discharging her cargo of coals at Santos the steamer loaded a cargo in the river Plate for Hull, where she arrived on August 14, 1902, and on her arrival the defendants entered into possession of the steamship as mortgagees. Although the freight in question had become due on June 17, it had not been paid when the mortgagees entered into possession on or about August 14, 1902. The defendants contend that they are entitled to all freight earned by the vessel and unpaid at the time when they entered (1) (1868) L. R. 3 Ex. 269. (2) (1868) L. R. 3 Ch. 597. (3) (1895) 72 L. T. 664. (4) (1887) 57 L. J. (Q.B.) 79. (5) (1872) L. R. 14 Eq. 32. 1903 SHILLITO v. BIGGART. 1903 into possession. The plaintiff, on the other hand, contends SHILLITO that, although the defendants are entitled to freight which became due after they took possession, they are not entitled to freight which became due and payable before, although it may not have been paid until after, they took possession. V. BIGGART. Walton J. It is somewhat surprising to find that the question which arises in the present case has not been settled by an express decision in some reported case. I am not satisfied that Chinnery v. Blackburne (1) is precisely in point. The judg ment of Parker V.-C. in Cato v. Irving (2) proceeds upon the assumption that the mortgagee of a ship is not entitled to freight unless he takes possession before the freight has accrued due. He says (3): "The authorities referred to in the argument establish that the mortgagee of a ship, who takes possession before the conclusion of the voyage, is entitled to the then accruing freight. It was contended by the defendants, that the present case does not come within this rule, because the plaintiffs did not take possession until the ship was in the Docks, and the voyage therefore concluded. I consider that a mortgagee who takes possession of the ship at any time before the cargo is discharged, comes within the rule. The right to the freight does not accrue until the goods are not only conveyed to their destination, but are also delivered; and a mortgagee who takes lawful possession of the ship while the goods are still on board, and is thereby entitled to deliver the goods and receive the freight, to the exclusion of the mortgagor, must be as much within the reason of the rule when the ship is in the Docks, as where she is only on her way to the Docks at the time when possession is taken." This was in 1852. In Brown v. Tanner (4) the Lords Justices in the year 1868 had to deal with a question as to a mortgagee's right to freight. In delivering the judgment of the Court Page Wood L.J. said (5): "It appears to us that this case must be determined in the appellant's favour on the ground of his having taken possession of the ship before the freight under the charter (1) 1 H. Bl. 117, n.; 2 R. R. 721. (3) 5 De G. & Sm. at P. 224. (5) L. R. 3 Ch. at p. 602. |