Supreme Court
Action No. 74 of 1976
21st August, 1980
Staine, J.

Mr. E.W. Francis, Q. C. for the Plaintiff.
Mr. J.C. Gray for the Defendants.

Bill of Sale - Defendants executing Bill of Sale with Plaintiff Bank in respect of a boat - Defendants failing to discharge obligations to Plaintiff Bank - Plaintiff Bank seizing boat for auction but Defendants again obtaining possession of boat until boat finally sank - Defendants liable under Bill of Sale - How a Bill of Sale can be discharged.

J U D G M E N T

This Action was commenced by a Writ of Summons, with the Statement of Claim attached specially endorsed. That is to say by this Statement of Claim, the plaintiff claims recovery of a specific amount. The amount in question is, as outlined in the Statement of Claim, the sum of $88,709.11.

The Action arises in this way. By a Bill of Sale executed on the 11th of May 1973, in favour of the plaintiff, the Defendants jointly and severally covenanted to repay the sum of seventy thousand dollars borrowed from the Plaintiff, which is a Bank established in this country, the sum aforementioned, and secured by the mortgage of the chattel the boat vessel Tamara K, the property of the Defendants. In the Bill of Sale the Defendants covenanted to repay the money borrowed by certain specific instalments monthly, that is to say the sum of $1,205.00 per month, the first of such payments to be made on the 29th December, 1973 and thereafter a like sum on the 29th day of each succeeding month.

The Defendants having thus covenanted commenced to make payments, roughly in consonance with their obligations; but after a while payments ceased to be made, and there is now outstanding on behalf of the principal sum, the sum of $56,431.75. To this has been added the sum of $5,614.44,which the plaintiff claims represents interest up to the date June 10th, 1976. I would say by way of observation that it was also a part of the covenant that the principal sum should bear interest at the rate of ten per centum per annum.

In addition to claiming the balance due on account for principal and interest, the plaintiff is claiming by this action payment of other sums. These sums represent amounts expended on account of insurance premiums due in respect of the boat "Tamara K", as well as sums expended and connected with legal expenses, and the cost of advertisement, as well as interest on the amounts expended in respect of insurance premiums paid.

At hearing of this matter two witnesses gave evidence on behalf of the plaintiff. They were Mr. Isaack Perrera and the Manager of the Bank Mr. Gustavo Aguilar.

After having deposed to the circumstances under which the loan on mortgage was made, Mr. Perrera gave evidence of the payment of the various sums expended in respect of insurance and a survey of the boat "Tamara K". He also gave evidence in respect of those sums paid on account of insurance premium, as the premium fell due. Additionally Mr. Perrera in evidence deposed to the fact that interest was charged in respect of the amounts paid on account of the insurance premium and these sum together made up an aggregate of the plaintiff's claim which mounted in the final analysis to $88,709.11.

Under cross-examination by Counsel for the Defence Mr. Perrera agreed that the sums expended in respect of advertisement charges, were not expended by virtue of any agreement with the plaintiff. In respect of the sums paid to Mr. Conrad Jones the Auctioneer when the auction of the boat was contemplated, Mr. Perrera said that it was customary that where the Bank takes a Bill of Sale in respect of a chattel and, a watchman had to be hired, the Bank had paid the watchman regardless of whether the boat had been seized, and notwithstanding the absence of an agreement. He said in evidence that the Bank had ordered sale of the boat because the debt owed in respect of the mortgage, was not being paid. Further, he said that apparently the owners had no interest in the boat. Mr. Perrera further agreed that the Bank had exercised its right of sale because the Defendants had failed to pay the sums which fell due for payment, but reiterated that the Bank had not seized the boat.

Continuing his evidence under cross-examination, Mr. Perrera said that charging interest on the sums which have been paid in respect of insurance, was going outside of the agreement. He said that the interest had not been compounded. He finally ended by saying that the boat was not sold by private sale.

In re-examination Mr. Perrera said that the receipt of the 10th of May, 1973 in respect of the payment of insurance premium in the sum of $4,332 was paid and the receipt was put in the name of the Northern Fishermen's Cooperative. This had been so because the records at the Insurance Company had not shown the change of ownership of the boat. The Policy of insurance on the "Tamara K" was issued on the 18th of December, 1974 for and on account of Santiago Marin. And the premium in respect of this period was paid on January 8, 1975. This was for the sum of $8,664.

On further examination by Mr. Grey, Mr. Perrera said that on the 9th of June the Bank released the boat to the Defendants, but the note did not say which of the Defendants had made the request for such a release. No auction sale was held on the 4th of June, 1975. On the 9th June a letter was written to the owners by the General Manager of the Bank and this letter was addressed to all the owners of the boat.

In answer to a question from the Court, Mr. Perrera revealed that the original request was that the boat was to be released to the owners for repairs and repainting, in order to obtain a better offer at a subsequent auction sale. However, it turned out that the boat so having been released on that condition, the owners or the Defendants began again to use the boat for their own business. It appears that the boat was never repainted nor repaired.

Mr. Aguilar's evidence was to the effect that he dealt mostly with Santiago Marin in matters concerning the boat, and it was Santiago Marin who offered to repair and repaint the boat. The original offer realized at the auction was between ten thousand and eleven thousand dollars - thereafter some of the Defendants went to the bank and said that if they accepted the sum offered at the auction, they would suffer a loss. So they wanted to paint it and put it in a good condition and make it substantially more attractive for sale. Mr. Aguilar arranged everything to their satisfaction, and they took possession of the boat. The boat was at that time near the Customs Wharf. Thereafter Mr. Aguilar received a letter from Mr. Heredia as well as a payment but with a complaint that they were having trouble with the boat around Turneff Islands and that the Captain and crew were in danger. Mr. Aguilar said that they at the Bank informed them to inform the insurers as soon as possible. On the following day said Mr. Aguilar, Mr. Marin came to his office and informed him that they were trying to get a form from the insurers to fill out. Thereafter several letters followed and the "Tamara K" finally sank.

When the boat sank it was in possession of persons appointed by the Marin brothers, Defendant to this action.

Mr. Aguilar finally said that he did not get any word from the insurers, and that the purpose of the original survey was to know exactly the condition of the boat and its value at that time. But the Defendants had not asked him to make the survey.

In giving evidence for the Defence, Santiago Marin admitted that he was a party to the giving of the Bill of Sale, and that if the boat had not been seized, he would have had to pay the Bank. But he attempted to show that the boat had been released to Heredia alone, and that thereafter the Marin brothers ceased to have anything to do with the boat.

This evidence was in strong contrast to that of Mr. Aguilar.

I accept the arguments of Mr. Francis that a Bill of Sale can be discharged only by a Memorandum of Satisfaction, and it was admitted in evidence that the Defendants were at all material times in possession of the boat.

Furthermore, it was a condition of the Bill of Sale that the Defendants would at all times keep the vessel insured, and if they did not pay the premium, the Bank would. Therefore it seems to me that the Bank can recover the sums paid in respect of insurance, except the sum of $4.332.00 paid on 5th April, 1973, a date prior to the execution of the Bill of Sale. It is true that there was no agreement for the payment of interest on sums paid in respect of insurance but the Bank is a lending institution and it follows that it must have been in contemplation of the parties that if the Bank expended sums of money in securing their property, those sums would bear interest, and I allow interest at 10%.

I would however disallow the sum of $86.00 paid for Survey of the "Tamara K." I regard this expenditure as solely in the Bank's interest.

I cannot accept the argument that seizure of the boat put an end to the Bill of Sale. The borrowing of the money having been admitted, and the Defendants being at all times in possession of the boat, I find that they are liable. I do not accept the submission that only Heredia is liable. This clearly is an argument of convenience, since evidence produced showed that Heredia died on 11th September, 1976 and application was made to strike his name from the list of Defendants. This application was granted.

Judgment in therefore given for the plaintiff in the sum claimed except the sum of $4,332.00 I mentioned and interest thereon, and the sum of $86.00 in respect of the cost of Survey. The several sums are to bear interest at 10% per annum until judgment is satisfied. The costs of this action are to be taxed.

----------OO----------