Chan. Div.] Mackenziev. Mackintosh.
unless driven by stress of circumstances, we should not be inclined to apply the lien to un
liquidated damages. I also wish to add that this cesser clause lends itse lf easily to this restricted meaning. I t does not say simply that the char- lla b ility *s cease, but the charterer’s lia b ility “ under this charter-party.” Those words seems to me to refer to payments made in accordance w ith the charter-party rather than to unliquidated damages for a breach of it. Though I should arrive at the same conclusion i f those words were not in the charter-party, s till I th ink they make the restricted construction of the cesser clause specially applicable. , ,
Appeal dismissed.
Solicitors for the plaintiff, Lowless and Go Solicitors for the defendants, Radford ' and Franklard.
[Chan. Div.
H IG H C O U R T OF JU S TIC E, C H A N C E R Y D IV IS IO N .
March 3 and 4, 1891.
(Before Kekew ich, J.) Mackenzie v. Mackintosh, (a)
Solicitor—Lien— Charge on money to he recovered in two actions—One action only successful—Lien of solicitor on money recovered fo r costs of both actions m p rio rity to cho.rge—Marine insurance.
A difference exists between the lien of a solicitor on a fu nd recovered fo r his client in an action and on deeds coming into his possession, inasmuch as in the former case he has no lien fo r all costs due to him. from his client, but only fo r the costs of recovering that particular fund.
A. having threatened to sue B. on a dishonoured b ill of exchange, B. agreed to give him a charqe on certain money which B.’s solicitors were taking proceedings to recover from two insurance com
panies on two separate policies of insurance on a ship. The charge was prepared by B.’s soli
citors, after an interview at which A. and B.
were also present, and the solicitors sent i t to A.
m a letter in which they undertook out of any moneys received by them from either the S.
Association or the M. Association under the policies to hand over to A. “ after payment of the legal charges ” so much of the amount recovered from the said associations as might be sufficient to repay him the amount secured by the charge.
ie proceedings against the M. Association were compromised on the association agreeing to pay a certain sum, and .B.’s solicitors then wrote to A.
saying he might consider himself secured. Some
time afterwards the S. Association obtained judq- ment in their favour.
Held, that i f the charge stood alone, B.’s solicitors would only be entitled to be paid their costs of recovering the fu n d in p rio rity to A .; but that the undertaking and surrounding circumstances showed that there was a bargain which entitled the solicitors to have their costs with reference to the proceedings _ on both policies out of any money received, in p riority to any payment being made to A. on his charge.
Tr ia lof action.
In 1886 Robert Wade, who was the owner of a ship called the Vigilant, effected a policy of
insur-(a) Reported b y E . A . Sc r a t c h l e y, Eaq., Barriator-at-Law.
ance w ith the Bristol Marine Insurance Associa
tion tor the sum of 1250Z. on the hull of that vessel, and also a similar policy w ith the South ot England General Club for Sailing Ships for a like sum; and also a policy w ith the South of England Freight Club for the sum of 300Z. on the freight of the vessel.
In Oct. 1886 the p la intiff was the holder of two acceptances given by Wade, one fo r 265?. 16s. 8d.
dated the 20th July 1886 and due on the 11th T 0/'- ,1o8o85 alld 1au0ther for m l ’ dated the 20th July 1886 and due on the 12th Oct. 1886.
The acceptances were drawn by the master of the Vigilant upon Wade in favour of Wade’s agent at St. Thomas, in the West Indies, in respect ot expenses there incurred by the agent. The latter acceptance having been dishonoured, the p la intiff was about to commence legal proceed
ings against Wade in order to recover the amount thereof, but i t was afterwards agreed that the legal proceedings should not be commenced in consideration of Wade securing to the p la in tiff the amount due to him by virtue of botli accept
ances by giving him a charge on the policies above-mentioned for the amount of both accept
ances, together w ith interest thereon.
, d'd® Vigilant at this time had been lost, and the defendants Lowless and Co. had been retained by Wade to act for him as his solici
tors to recover the sums due to him under the above-mentioned policies.
On the 21st Oct 1886 the p la in tiff’s managing clerk, Wade, and Nelson and one of the defendant firm, met at the defendants’ office, and the follow
ing charge was dictated by Nelson to a shorthand clerk, and was afterwards w ritten out and signed by Wade :
I hereby charge a ll my interest in a certain policy of marine insurance dated the 15
th
Feb. 1886 effected with the South of England General Club for Sailing Ships for tho sum of 12501 on the hu ll of The Vigilant, and also a certain policy dated the 15th Fob. 1886 effected w ith the South of England Freight Club for the sum of 3001.on the freight of The Vigilant, and also a certain policy of insurance current for the year 1886 effected w ith the Bristol Marine Insurance Association for tho sum of l-oOl. on the hull of The Vigilant, w ith the payment to you of the amount of two several acceptances of mine to the draft of John Sharpe, the master of The Vigilant
as follows : ’
1. I ’or 2651 i6s. 8d., dated the 20th July 1886, and dne on the 11th Nov. 1886.
r u if? 0 100i',’ datod 20th JllIy 1886. the draft of V ? £ « iu pe’od,u0on th,° 12fch Oct. 1886, making a total ot 3b5l. lbs. 8d., together with interest at the rate of 5 por cent, per annum from tho due date of the said t l Uu ^ pa-ynientand the notarial charges thereon, and 1 heroby agree and authorise my solicitors, Messrs Eowless and Co., or the said South of England Insurance Company, to pay out of such sums as I may recover against them by action at law or by arbitration to you the said D. Forbes Mackenzie and Co. the said sums so secured as aforesaid.
The charge was sent to the p la in tiif by the de
fendants Lowless and Co., together w ith the following letter of the same date, and signed bv
them : J
Dear Sir,—In pursuance of the inclosed w ritten charge signed by M r. Wade to-day, wo undertake out of any moneys received by us from either tho South of England Insurance Association or tho Bristol Marine insurance Association under the policies on The Vigilant referred to in M r Wade’s security to hand over to you alter payment of the legal charges so muoh of the amount recovered from tho said association as may be sumcient to repay you tho amount secured by M r. Wade or, m theovont of the same not amounting to the amount of the charge, the whole thereof.
M a c k e n z i e v. Ma c k i n t o s h.
The claims against the insurance companies were prosecuted by the defendants Lowless an Co. as solicitors for Wade, and that aga . Bristol Marine Insurance Association w , the 10th Nov. 1887, compromised by them.
On the 11th Nov. 1887 the defendants L w ® and Co. sent the following letter to the plaintm
solicitors: .. ,,
As promised, we beg to advise you th a t'° u r o'ie“on_
arbitration against the B ristol Associa (.jj0 eluded yesterday. The claim was -C1 ^ d l“ ore than association agreeing to pay a sum which narticu-cover your client’ s Charge. Please sendu*' P ^ 0r lars of this. Your clients w ill s till have to member3 Payment, a call w ill have to bo made upo . _on of the association to pay it, but they may loo* up
themselves as secured. .
On the 15th Nov. 1887 the defendants Low!
and Co. also sent the following let
p la intiffs solicitors: . - -l, We are obliged by your favour of if „ e c t S . r y you we will send to onr client, but it is quit tben onr should wait for collection of the money ,
olient has no means of paying yours. .. that the Our object in writing was to satisfy
money is at least secured. 1A7 „ qj On the 21st March 1888 the sum of 41W- '*■
was paid to the defendants Lowless andI b ^ respect of the policy in the Bristol the The p la intiff was not aware at that tim
money had been actually paid to the defendant Lowless and Co., and had not given consent to it being paid to them. . , ,, a„,nti, of
A n action was brought against th
England General Club for Sailing f,hLPs *0or ®°cted the amount of the policies, but, after P , j.ie litigation, the action resulted in favou
A question then arose as to the
Plaint i£E and the defendants Lowless a • . , j reference to the money recovered from
marine Insurance Association. , , . The plaintiff contended that he ^ a® \ gub.
he paid the amount of his charge t r 0’wiess ject to the taxed costs of the defend de-and Co. of recovering that sum; w , b W a n t s Lowless and Co. contended that Utey were also entitled to be paid the am i,'n„-iand costs of the action against the South o g h n General Club for Sailing Ships m P ^ ' t anything being paid to the Plal.n* .„: id get
° f which would be that the p la intift wou g The ^plaintiff then commenced this action to have the question decided. . . i„r was
On the 17th July 1889 a receiving order^was made against Wade, but the defendan ;nterest his trustee in bankruptcy, disclaime
m the money in dispute in this action. , The action was heard by Kekewic ’ . ' ’eYidence plaintiff’s managing clerk stated ■ Nelson that at the meeting on the 21st Oct I K » ^ eover stated that the policies could not , g and to the plaintiff, as the defendants L o w ^ a ^ Go. were collecting the money , ha he § give the p la intiff a letter undertaking to p y money when i t was received. .
, Renshaw, Q.C. and Biss for the money defendants have no general lien o . i t . hut only for their taxed costs of reco S
Lann v. Church, 4 Madd.; «e?.
Bozon v. Bolland, 4 My. & ’ H a ll v. Laver, 1 Hare, 571, «>77.
The same rule applies to money obtained as the result of a compromise:
S T l l E V “ B. 630, 42 Ch. D iv.
190,195. .
To some extent this is a question of construction.
u 'L eharms given by Wade is clear. The letter with which it is sent creates the difficulty. But in it the two insurance companies are separated, and the defendants undertake to pay out the money received from “ either ” and later on, after referring to the payment of the legal charges, thev refer to the “ amount recovered from the said association,” and not associations Therefore, af er the defendants have been paid the sum due to them for their taxed costs of recovering the received from the Bristol Marine Insur
ance Issociation, the plaintiff is entitled to the towards payment of the amount due to balance b P y W hen the defendants, in
t h e ir le tte rs o f t t u T i lt h and 15th N o v . to ld th e th a t he was secured the y made themselves trustees of th e m oney fo r th e p la in tiff sub je ct to ih e paym ent o f th e costs o f re c o v e rin g i t , w h ich are given th e m b y s ta tu te :
Tie Clark • Ex parte Newland, 35 L. T. Bep. N. S.
916; 4 Ch. Div. 515.
t, • ukelv that the p la in tiff would have consented in consideration of the charge to stay
^ p ro c e e d in g s he was about to commence tlie . ^ t Wade i f the agreement was that the 'm in ts were to have all these costs out of
£ fund, as they now contend, before he received The compromise was agreed to in T W h 1887 iust before the letter of the 11th of i l l ' month though the amount had to be
^ f w t e d from the members of the association, and waJ not actually ready for payment u ntil March 1888. I f th agreement was as is con- S for by the defendants, the p la intiff would unt have allowed the defendants after November to go on w ith the other action at his expense.
O C and Horace Nelson for the defen- da S Lo’w&ss and Co.-These defendants have
a general lien on the money m their hands : Basil M ontagu’s Summary of the Law of Lien, Mercer v. Graves, L . Hep. 7 Q. B. 499 ;
\ fzg Ts. iW WST t T m'?pm an’
C a L r t % L. T. Bep. N. S.
Fisher on Mortgages, 3rd ed. vol. 1, p . 158, sa. 201, Coteer v. Ede, 23 L. T. Bep. N. S. 884 ; 40 L. J.
Stokes on S o lic ito rs , p a rt 2, o. iv ., p . 138.
In the cases cited on the other side the money had not been received by the sohcitor. In the ease of Be C lark; Ex parte Newland (ubi sup.), the money had been provided by the surety for the purpose of paying the creditors, and it was the money of the surety, and the solicitor had .«nt a letter to the creditors saying be would pay.
W hen the defendants wrote the letters of the 11th and 15th Nov. the amount agreed on was 720Z They thought that would be sufficient; but it was reduced by calls due to the association from Wade. The words “ legal charges in the undertaking mean charges against Wade, and there is nothing in the letter to confine them to the particular company from which the
MARITIME LAW CASES.
Ch a n. Di v. ] Ma c k e n z i e v.
money is received. These defendants were aware of Wade’s pecuniary position, and it is not like ly that they would continue speculative actions in which the p la in tiff would have the benefit and they the responsibility.
B en ah aw in reply.—A part from the under
taking i t is clear that the p la in tiff would be entitled to the fund subject to the payment to these defendants of their taxed costs of recover
ing "ohe amount. There is a difference between the lien of a solicitor on documents in his posses
sion and the fru its of a judgm ent:
Lucas v. Peacock, 9 Beav. 177.
The cases cited on the other side do not touch this point. The book referred to, viz., Basil Montagu’s Summary of the Law of Lien, was published before the decision in Bozon v.
Bolland (ubi sup.). I f the p la in tiff had continued his proceedings, and recovered payment on the bills, he could have garnished the amount received from the Bristol Marine. He agreed to take the charge instead, and ought to have had the policies handed over to him ; but, as the defendants had begun the proceedings against the insurance companies, they were allowed to retain them, and that is the reason that this undertaking was given by them. I t was intended to meet the case of the defendants obtaining possession of the fund. I t is an undertaking severally applicable to both associations, and the words after “ legal charges” must be read distributively. “ Amount ” and “ association” are both in the singular. Though the money in Be C lark; Ex parte Newland (ubi sup.), was supplied by the surety, the judgment is that the solicitor was a trustee of it. These defen
dants obtained the money from the association behind the back of the plaintiff, and on giving an indemnity to the association, and can obtain no benefit from having i t in their possession :
Wickens v. Townshend, 1 Buss. & My. 361.
He also referred to Fisher on Mortgages, 3 edit, vol. i. p. 158; “ Lien of Solicitors,” s. 225.
Kekew ich, J.—The question is, what are the rights of the defendants w ith reference to the undertaking given by them on the 21st Oct.
1886 to the plaintiff. That undertaking cannot be understood w ithout reference to the charge of even date given by M r. Robert Wade to the p la in tiff; and that charge and undertaking can
not properly be construed without regard, of course, to the circumstances under which they were given, and to the law applicable to the subject-matter of such charge and undertaking.
M r. Robert Wade was a debtor to the plaintiff on bills of exchange. One b ill was due, the other was s till running, but the p la in tiff had a claim against M r. Robert Wade. He, on thq other hand, had claims against certain mutual insur
ance associations in respect of a ship and the freight of a ship, and he was w illin g to give the p la in tiff a charge on the moneys coming to him from those associations, so as to meet the debt due or to become due in respect of the bills.
I f Mr. Robert Wade had simply given the p la in tiff a charge, that charge m ight have been worked out in more ways than one. The m ort
gagee—that is to say, the person entitled to the charge—m ight have insisted on a rig h t himself to recover, or he m ight have given notice to the associations, and that ultim ately would have had the same effect as a garnishee order; or
’. Mackintosh. [Chan. Div. he m ight have authorised the mortgagor’s solici
tor to proceed and give them notice to pay over.
In either event what he would have taken over under that would have been what the m ort
gagor could give him—no more and no less, sup
posing the charge to be properly drawn. I appre
hend that what the mortgagor was entitled to give the p la in tiff was a charge as regarded each association on the money recovered from that association. Take fo r instance the Bristol Marine Association. I f the proceedings against that association had gone on in the usual way—either by action at law, or by arbitration, or by com
promise—and a certain sum had ultim ately been found to be payable to Mr. Robert Wade on his policy, that amount would have belonged to the mortgagee by virtue of the charge. But what were the moneys recovered P The moneys reco
vered of course are represented by the sum paid by the association, less the costs of obtaining payment. I t has been argued on behalf of the defendants that a client employing a solicitor to recover moneys from the debtor to him is not only liable to pay out of the moneys recovered the costs of the proceedings (which no one doubts), but that he is liable to pay out of those moneys all the costs which he happens to owe to the solicitor. That, according to my view, is not the law, and notwithstanding the citations from an ancient book—at least a book many years old, namely, Basil Montagu’s Summary of the Law of Lien—i t never has been the law w ith in the present generation. B u t there is a broad dis
tinction between the lien of a solicitor on his client’s deeds, documents, and papers, generally called a lien on deeds, which attaches to all his papers, and the lien on a fund recovered for his client in an action. There are really no modern cases (not one has been cited) going to show that there is a charge on the fund in the way of a general lien for all of the costs due from the client to the so licito r; whereas i t has been settled—beyond the time of legal memory I m ight almost say—that a solicitor has a lien on the deeds, documents, and papers in his hands. The
tinction between the lien of a solicitor on his client’s deeds, documents, and papers, generally called a lien on deeds, which attaches to all his papers, and the lien on a fund recovered for his client in an action. There are really no modern cases (not one has been cited) going to show that there is a charge on the fund in the way of a general lien for all of the costs due from the client to the so licito r; whereas i t has been settled—beyond the time of legal memory I m ight almost say—that a solicitor has a lien on the deeds, documents, and papers in his hands. The