Brunswick of Canada Limited (Plaintiff)
v.
The Ship Varda Her Tackle and Apparel and
Bay Moorings Limited (Defendants)
Trial Division, Gibson J.—Toronto, April 18 to
20; Ottawa, May 4, 1972.
Maritime law—Sale of ship—Vendor subsequently execut
ing general release of purchaser's obligations—Not intended
to apply to sale contract—Effect.
Plaintiff sold a yacht to defendant company under a
conditional sale contract. Subsequently plaintiff executed a
release of defendant's obligations to plaintiff which though
expressed in general terms was to the knowledge of both
parties not intended to release defendant company's obliga
tions under the conditional sale contract but only to other
matters.
Held, defendant company was not released from its obli
gations under the conditional sale contract.
L. & S. W. Rly v. Blackmore (1870) L.R. 4 H.L. 610,
applied.
ACTION.
A. J. Stone, Q.C. for plaintiff.
E. A. Du Vernet, Q.C. for defendants.
GIBSON J.—The plaintiff claims ownership
and possession of the defendant ship, being
Owens Concorde (Model 42) hull serial number
9196, her tackle and apparel.
What is at issue is whether or not a general
release executed and delivered by the plaintiff
to the defendant Bay Moorings Limited covers
or in any way relates to a certain conditional
sales contract in respect to the defendant ship
Varda.
The conditional sales contract is entitled "Re-
tail Instalment Contract—Marine Equipment",
is dated July 29, 1969, is between the plaintiff,
as seller, and the defendant Bay Moorings Lim
ited, as purchaser, and was registered in the
Office of the Clerk of the County Court for the
County of Simcoe on July 30, 1969, as Instru
ment No. 013387.
The general release (Exhibit 19) dated May
19, 1971, given to the defendants on a closing
on May 21, 1971 was in respect to the certain
matters which had been in dispute. At that time,
the plaintiff also received the general release
(Exhibit 20) executed by one Albert Melchior
and Bay Moorings Limited in favour of the
plaintiff and Brunswick Corporation.
The certain matters which had been in dis
pute concerned separate and different transac
tions having no relationship to the transaction
contained in the said conditional sales contract.
The main separate and different matter which
had been in dispute concerned the balance of
the money owing on the purchase of four
yachts out of an original purchase of twelve
yachts from the plaintiff by one Albert Melchi-
or under a distributorship contract in the
months of January, February and March, 1969,
which four yachts have hull numbers 9190,
9193, 9194 and 9202. The other of the certain
matters which had been in dispute were what
was termed an open account amounting to some
$788 and an account for Lawrence Warehous
ing, a bonded warehouse, in the sum of approxi
mately $1,600.
The plaintiff, through its officers and serv
ants, including its solicitors, after negotiations,
settled the dispute concerning not only the
matter of the purchase of these four yachts and
any storage and other incidental charges in
respect to them, but also the said two other
matters. In implementing the settlement, these
general releases were executed and exchanged.
At the time of this settlement which was in
the month of May, 1971, the defendant Bay
Moorings Limited was added as a party to the
release (Exhibit 19) during the negotiations at
the suggestion of the solicitor for the plaintiff
because these four yachts were stored on the
premises occupied by the defendant Bay Moor
ings Limited, and it was not known whether or
not there might be charges for storage and other
minor matters in respect to these four yachts.
But the whole purpose of adding Bay Moorings
Limited as a party to this release was to evi
dence the satisfaction of all obligations arising
out of the physical presence of these four
yachts on the premises of Bay Moorings Limit
ed at Penetanguishene in Lawrence Warehous
ing, a bonded warehouse.
At this trial, evidence was admitted of the
surrounding circumstances giving rise to the
execution and delivery of the said general
release (Exhibit 19) and the reciprocal general
release (Exhibit 20), namely, the matters con
cerning the four yachts, the open account and
the Lawrence Warehousing account, and also of
the fact that it had nothing to do with the said
conditional sales contract in respect to the
defendant yacht Varda or the defendant ship
Varda.
The defendant Albert Melchior and his solici
tor agreed in evidence that at no time during
any of the negotiations leading up to the settle
ment out of which arose the acts of executing
and exchanging of these general releases, was
there discussed with the plaintiff, its solicitors
or any of its representatives, the subject-mat
ters of either the said conditional sales contract
between the plaintiff and Bay Moorings Limited
in respect to the defendant yacht Varda, or the
defendant ship Varda.
The evidence also was that Bay Moorings
Limited had made all the monthly instalment
payments on the said conditional sales contract
up to and including the May 15, 1971 instal
ment; and that then in July, 1971, when
requested by an officer of the plaintiff by tele
phone from Chicago, why it (Bay Moorings
Limited) had not made the June 15, 1971 pay
ment, Albert Melchior (chief officer and sole
owner of Bay Moorings Limited) told such offi
cer he had in his possession for Bay Moorings
Limited, inter alia, a general release, and he
read to such officer over the telephone the
terms of the general release Exhibit 19 and
especially the reference to "all contracts". At
that time, Melchior, however, declined to say to
such officer of the plaintiff whether or not Bay
Moorings Limited was raising the general
release (Exhibit 19) as a bar to its obligation to
pay the remaining instalments due pursuant to
its terms on the said conditional sales contract
in respect to the defendant yacht Varda; but
instead Melchior told him that "for the time
being", he was "Mickey-Mousing around". (No
one explained what these words were intended
to mean.)
The defendant Bay Moorings Limited submit
ted that the general release (Exhibit 19) extin
guished its obligations to make the balance of
the instalment payments due after May 15,
1971 on said conditional sales contract in
respect to the defendant ship Varda, even
though such a result was not in the contempla
tion of the plaintiff or communicated to the
plaintiff by the defendant Bay Moorings Limit
ed at the time such general release (Exhibit 19)
was negotiated, executed and delivered by the
plaintiff.
The defence is untenable. The action should
not have been defended.
The applicable principle in respect to general
releases such as were executed here is stated in
Directors L. & S. W. Rly. v. Blackmore (1870)
L.R. 4 H.L. 610 by Lord Westbury at page 623,
in this way:
... The general words in a release are limited always to that
thing or those things which were specially in the contempla
tion of the parties at the time when the release was given.
And in Upton v. Upton (1832) 1 Dowling 400
at p. 406, Taunton J. expressed the matter this
way:
. the general words of a release may be limited by the
particular matter out of which the release springs, and the
particular intent of the parties by whom the release is
executed,....
There shall be findings that in executing and
exchanging the general releases (Exhibits 19
and 20), the only subject-matters which the
parties and their solicitors and other advisers
had in mind were the four yachts, and any
storage or incidental charges in respect to them,
the warehouse account of about $1,600 and the
so-called open account of about $788; and that
when these general releases were executed and
exchanged, no question or dispute had arisen
between the plaintiff and the defendant Bay
Moorings Limited as to the conditional sales
contract in respect to the 42 foot Owens yacht,
the defendant Varda, or as to the defendant
yacht Varda itself, and neither of these latter
matters were in the contemplation of the parties
in the sense already mentioned.
Judgment, therefore, will go in favour of the
plaintiff against the defendants for a declaration
that the conditional sales contract dated July
29, 1969 between the plaintiff as seller, and the
defendant Bay Moorings Limited as purchaser,
in respect to the defendant ship Varda her
tackle and apparel, which contract was regis
tered in the Office of the Clerk of the County
Court for the County of Simcoe on July 30,
1969 as Instrument No. 013387 is a valid condi
tional sales contract and is and has been in
default since June 15, 1971; that the general
release executed in this matter by the plaintiff
in favour of the defendant Bay Moorings Limit
ed and others, does not relate to the said condi
tional sales contract or to the defendant ship
Varda her tackle and apparel; for title and
possession of the ship Varda her tackle and
apparel; and for costs, which costs are subject
to the fiat also issued this date.
If any question arises as to the delivery of
possession of any of the tackle or apparel of the
defendant, the ship Varda, the matter may be
spoken to.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.