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1835.

GRAVES

v.

HICKS.

were held to mean nothing, because the Charge had been created to secure a Debt. But that was not the case here. Then the Testator, when he disposes of the residue of his Personal Estate, says: "And, as to all the rest and residue of my Personal Estate and Effects, whatsoever and wheresoever, not hereinbefore specifically bequeathed, I give and bequeath the same, subject and charged with the payment of all my just Debts." If the words in the preceding part of the Will, which devised the Estates subject to the Charges and Incumbrances thereon, go for nothing, this direction that his Personal Estate shall be first applied for the payment of his Debts, must also go for nothing; as that must be the case, at all events, by operation of Law. The whole residuary Clause shows that the Testator meant his general Personal Estate to be first applied in payment of his Debts, then his Parliamentary Stocks and Funds, and then his residuary Real Estates. But the question still is what was meant by this word "Debts." Although it is perfectly true that the Covenant, which was merely auxiliary, made the 6,000 l., in a certain sense, a Debt, yet, for the purpose of determining the priority, you must consider whether it was a Debt at the time when the Security was created. In Ex parte Digby, Lord Eldon says: "The cases of Exoneration go upon the ground that the Money is the Debt of the Person making the Mortgage, at the time. The question here is, whether, at the moment the Charge was made, it was a Personal Debt of The Duchess's." And the question in this Case also is, whether, at the time when the Charge was created, it was the Personal Debt of the party, for which he was making provision; or whether he was not making a security for a Sum for which he gives this Covenant as an auxiliary security only. In Lanoy v. The Duke of Athol,

Lord Hardwicke, C. says: " But though there is this Covenant, it is truly said, by the Defendant's Counsel, that the Personal Assets are not the original Fund charged, and, in that respect, differs from a Mortgage or any other Incumbrance; for, there being a borrowing and a lending in the case of a Mortgage, the Real Estate is considered only as a Pledge; and the Personal Estate, which is the natural Fund, is liable in the first place : but this Rule has never been carried so far as to extend it to a Provision upon a Settlement."

My opinion is that the finding of the Master is right.

Exception over-ruled.

1835

GRAVES

0. HICKS.

GARDNER v. LACHLAN.

1833; 12th Dec.

Bankrupt.
Order and
Disposition.

IN 1831, John Scott employed the Plaintiff to act as his Agent in respect of some Ships of which he was the Owner, and Scott agreed that all Advances to be made, by the Plaintiff, for effecting Insurances on his A., on behalf of Ships or otherwise for the purposes thereof, should be the Owner of a secured by a Mortgage of the Ships and their Freight. Ship, entered In March 1832, the Defendant, Lachlan, a Ship-broker into a Charterparty with B., by on the behalf and by the authority of Scott, entered into which B. agreed

to pay to A. on behalf of the Owner, a certain Sum for the freight of the Ship, by Two Instalments, one to be paid on the sailing of the Ship, and the other, on the completion of the Voyage. The Owner being indebted to C., ordered, in writing, A. to pay to C. all Monies he might receive under the Charter-party; and, accordingly, 4. paid over the first Instalment to C. The Owner then assigned, by Deed, the remainder of the Freight to C., who gave notice of the Assignment to A., but not to B. The Vessel completed her Voyage, and afterwards the Owner became bankrupt. Held that the remainder of the Freight was not in his order and disposition at his Bankruptcy.

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port vot. F. 123. 4 th x br 129

Cooke & Pruning 36. Ref.. C.P.344

183.3.

GARDNER

D.

LACHLAN.

a Charter-party, with the Commissioners of the Navy, for the conveyance of Emigrants to Van Diemen's Land, in a Ship belonging to Scott called The Princess Royal. The Charter-party was dated the 20th of March 1832, and was made between two of the Commissioners of the Navy, of the one part, and Lachlan (on behalf of the Owners of the Ship) of the other part, and, thereby, Lachlan, on behalf of the Owners, entered into certain Covenants with the Commissioners, and, in consideration of those Covenants being performed by Lachlan on behalf of the Owners, the Commissioners, on behalf of His Majesty, agreed to pay to Lachlan, on behalf of the Owners, for the Hire and Freight of the Ship, at the rate of 37. 13s. per Register Ton, in manner following, (that is to say) one half of the Freight to be paid, by the Lords of the Treasury, on producing a certificate of the Ship having sailed on her Voyage, and the remainder also by the Lords of the Treasury, on producing certificates of the number of persons that were embarked in England, having been landed at Hobart's Town.

In April 1832, the Plaintiff, by Scott's direction, insured the Ship and Freight for 1,8007., and paid the Premiums on the Policies: and he retained the Policies in his hands as a security for the amount due to him from Scott.

Scott, in order to secure the repayment of some part of the Advances made by the Plaintiff for his use, signed and gave, to the Plaintiff, an Order dated the 25th of April 1832, directing Lachlan to pay to the order of the Plaintiff, all Monies he might receive on account of the Ship, under her then Charter to the Navy Board; and the Plaintiff delivered the Order to Lachlan.

Upon the sailing of the Ship, 1,100 7. became due as one Instalment of the Freight; and Lachlan received that sum from the Lords of the Treasury, and, with Scott's privity, paid it to the Plaintiff. After the sailing of the Ship, the Plaintiff continued to make Advances on Scott's behalf; and, in August 1832, a Balance of 800 l. was due, from him, to the Plaintiff. Scott having delayed to give to the Plaintiff a Security for his Debt, the Plaintiff followed him to Ireland, and sued out a Writ for the purpose of arresting him; and, ultimately, Scott, after considerable pressure, executed an Indenture dated the 13th of August 1832, and, thereby, after reciting that Scott was indebted, to the Plaintiff, in 800 l., Scott assigned, to the Plaintiff, all the Freight and Earnings of the Ship which might become due under the Charterparty, and all Policies of Insurance then effected or thereafter to be effected, in respect thereof in Trust to retain, thereout, the 800 7., with interest from the 28th of July then last. On the 27th of August 1832, the Plaintiff served Lachlan with a Notice of the Assignment, and desired him to hold the residue of the Freight to become due under the Charter-party, on his (the Plaintiff's)

account.

In September 1832, the Ship arrived at Van Diemen's Land.

On the 15th of January 1833, Scott became Bankrupt, and the Defendants Burn and others were chosen his Assignees.

The 800 7. still remaining due, the Bill was filed in July 1833, stating that the 800l. and upwards due for Freight,

1833.

GARDNER

V.

LACHLAN.

1833.

GARDNER

v.

LACHLAN.

was then payable by the Lords of the Admiralty (to whom all Contracts entered into by the Navy Board had been transferred by 2 & 3 Will. 4, c. 40) or by the Treasury upon the Certificate or by the direction of the Admiralty, to Lachlan, and that the Admiralty were willing to pay that Sum to Lachlan, or to give him the necessary Certificate for receiving the same, it being usual to pay the Freight to the Person in whose name the Charter-party is made, and to deal with such Person only that the Plaintiff was entitled, under his Security, to receive the 800 l. due for Freight, but the Assignees had, lately, set up a claim thereto, and had given Notice of such claim to the Admiralty, and required the Fund to be paid to them. The Bill prayed that the Plaintiff might be declared to be entitled, under the Assignment, to receive the Sum due for Freight, that Lachlan might be declared to be a Trustee thereof for the Plaintiff, and might be decreed to receive and pay the same to him, and that Lachlan might be restrained from paying the same to the Assignees, and that they might be restrained from receiving or demanding the same, and, if necessary, that a Receiver might be appointed thereof.

The Answer of the Assignees submitted that the unpaid Freight did not pass by the Assignment to the Plaintiff, for want of Notice to the Parties by whom the same was payable, prior to Scott's Bankruptcy.

The Plaintiff now moved that Lachlan might be at liberty to receive the Money due for Freight under the Charter-party, from the Lords of the Admiralty or the other Persons by whom the same might be payable, and might be ordered to pay it into Court, or that a

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