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Smart's

Trustee.

delivery have been freely admitted. Thus in Hogarth v. Sect. 19. Smart's Trustee2 (1882), a millwright sold a thrashing Hogarth v. machine and erected it on the buyer's farm under a verbal agreement that the machine should remain the seller's property until the buyer was able to pay the price, and that meantime the buyer should pay a reasonable yearly sum for hire. The condition was held to suspend the passing of the property and to exclude the buyer's creditors.*

The second sub-section restricts the ordinary effect of a bill of lading in passing the property. A bill of lading both at common law and by statute is a document of title.5 "A cargo at sea," says Bowen, L. J., " while in the hands of the carrier, is necessarily incapable of physical delivery. During this period of transit and voyage the bill of lading, by the law merchant, is universally recognised as its symbol, and the endorsement and delivery of the bill of lading operates a symbolical delivery of the cargo. Property in the goods passes by such endorsement and delivery of the bill of lading whenever it is the intention of the parties that the property should pass, just as, under similar circum

1 COм., Sect. 17 ante, p. 83.

29 Ret. 964.

3 It is interesting to note in this case the influence of English law and practice. In a proof led before the Sheriff-Substitute of Berwickshire the pursuer (Hogarth) deponed, "I hinted that it was most likely that I would have to put my name on both mill and engine as proprietor, and he (the buyer) had no objection to that. I considered that essential, and also I had seen the same thing done by English makers on machines that had been working for some years." In point of fact cards were affixed to both engine and mill inscribed "Andrew Hogarth, engineer, proprietor, Kelso." It is to be observed, however, that the English practice was designed to overcome the statutory reputed ownership which had no existence in Scotland. See COм., Sect. 17 ante, p. 83.

4 See also Murdoch and Co. Ltd. v. Greig (1889), 16 Ret. 396. But such cases of hire-purchase are within the operation of Sect. 25 (2). The subject is referred to ante, p. 83.

5 "The assignee of a bill of lading trusts to the indorsement; the instrument is in its nature transferable; in this respect, therefore, it is similar to the case of a bill of exchange. If the consignor had intended to restrain the negotiability of it he should have confined the delivery of the goods to the vendor only; but he has made it an indorsable instrument."-Per Ashhurst, J., in Lickbarrow v. Mason (1787), 2 T.R. 63 at p. 71. But see Lord Loughborough's opinion contra in the same case (1790), 1 H. Bl. 357 at p. 359. The latter judgment was, however, reversed by the House of Lords (1793), 6 East 21. In the Factors Act 1889 [52 & 53 Vict. c. 45, Sect. 1 (4)], a bill of lading is expressly included in the expression "document of title." See also Bills of Lading Act 1855 (18 & 19 Vict. c. 111), App. post, p. 293; and Coм., Sect. 25 post, p. 126.

Sub-sect. (2).

Effect of bills

of lading.

Sect. 19.
Law of Scot-

of lading.

Arnots v. Boyter.

stances, the property would pass by an actual delivery of the goods." The law of Scotland, so far back as the middle of land as to bills the eighteenth century, recognised an assignment of a "bill of loading" as operating constructive delivery, and at least before the end of the century it further recognised an assignment by way of indorsation.3 The case of Arnots v. Boyter (1803) illustrates this sub-section. A seller who shipped from abroad, instead of forwarding the bill of lading to the buyer in this country, sent it to his own agent at the port of consignment, and the buyer's circumstances being suspicious, the agent was held entitled to insist upon security for the price before giving actual delivery. It has, however, been held in England that where the seller's object in taking the bill of lading to his own order was merely to guard against a threatened breach of contract by the buyer, which did not in point of fact take place, there was no reservation of the right of disposal.5

Apparent exceptions to general rule.

Sub-sect. (3). Law of Scotland

v. Dickson.

The law of the third sub-section seems to have been established in Scotland before the passing of the Act. Brandt and Co. Brandt and Co. v. Dickson (1876), goods were forwarded on the evening of a Friday, and were delivered at the buyer's warehouse in his absence on the following day. The bill of exchange was posted for acceptance on the Saturday, and was received by the buyer on Monday morning. The same post brought the buyer intelligence, upon which he resolved to stop payment, and he therefore refused to accept the bill. It was held that the property

Clarke and Co. had not passed. On the other hand, in Clarke and Co. v. Miller and Son's Trustees (1885), the property was held to

v. Miller and Son's Trustee.

1 In Sanders v. Maclean (1883), 11 Q.B.D. 327 at p. 341. See also to the same effect Lord Medwyn in M'Clelland v. Rodger and Co. (1842), 4 D. 646 658. 2 Buchanan and Cochran v. Swan (1764), Mor. 14208. Bogle v. Dunmore and Co. (1787), Mor. 14216, and other cases in Appendix II. IV. (1) post, p. 331. See also cases where effect was denied to a bill of lading, Appendix II. IV. (2) post, p. 333. 4 Mor. 14204.

at f

Joyce v. Swan (1864), 17 C.B. N.S. 84. See also Browne v. Hare (1859), 4 H. & N. 822. In such cases the seller is deemed to be the buyer's agent, but the question is one of fact to be determined by judge or jury-Van Casteel v. Booker (1848), 2 Ex. 691.

Brodie v. Todd and Co. (20th May 1814), F.C.; Carnegie and Co. v.
Hutchison (1815), Hume 704; Hills v. Buchanan (1786), Mor. 14200; Affd.
H.L., 3 Pat. App. 47; but see Colvin v. Short and Co. (1857), 19 D. 890.
8 12 Ret. 1035.

7 3 Ret. 375.

"2

have passed, and the goods were effectually claimed by the Sect. 19. buyer's general creditors. In this case there was a delay of two days in forwarding the bill for acceptance, which was explained by the circumstance that the seller's agents, through whom the sale was arranged, had, in accordance with their usual practice, advised their principals in London of the sale so that they might forward the bill direct. Lord Justice-Clerk Moncreiff, who delivered judgment, and who had also given the leading opinion in Brandt and Co.'s Case, attempted to distinguish between the terms of the respective contracts; but a much sounder distinction is embodied in the following dictum of the same learned judge in Brandt and Co.'s Case-"I think the despatch of the goods by rail, and the sending of the invoice and bill by post, were in law contemporaneous acts." But if the third sub-section is declaratory of the law of Doubts as to Scotland, it is not equally certain that it represents the previous law of England. previous law of England. The rule of the sub-section is perhaps intended to embody the result of the House of Lords judgment in Shepherd v. Harrison (1871), but in Shepherd v. that case the seller took the bill of lading to his own order, and forwarded it indorsed to his own agents, by whom it was sent to the buyer along with the bill of exchange for acceptance. Great importance was attached, in that and other cases, to the fact that the indorsed bill of lading was not sent to the buyer direct.1 In the Court below, in Shepherd v. Harrison, the effect of direct transmission was thus stated in Cockburn, C. J. [The cases cited are] "certainly very strong indeed, and conclusive to show . . . that where the consignor sends these documents" [bill of lading and bill of exchange] "direct to

3

1 In Brandt and Co.'s Case the words were: "We confirm the sale made to you. . . draft at four months from this date." In Clarke and Co.'s Case the words were slightly varied, thus: "We confirm the sale made this day payment by draft at three months."

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23 Ret. at p. 381. See opinion of Lord Craighill in Clarke and Co.'s Case, 12 Ret. at p. 1044. 3 L.R. 5 H.L. 116.

4 E.g. by Lord Chelmsford in Shepherd v. Harrison, L. R. 5 H. L. at pp. 123, 124; by Mellish, L. J., in Ex parte Banner (1876), 2 Ch. D. at p. 287; and by Cotton, L. J., in Mirabita v. Imperial Ottoman Bank (1878), 3 Ex. D. at p. 172.

Harrison.

Sect. 19.

Effect of sub

sect. (3) upon previous law.

Sect. 20.

RISK PRIMA
FACIE PASSES
WITH PRO-
PERTY.

the consignee that ought to lead to the inference, and properly lead to the inference, that he intended the consignee should have at once the disposal of the property and possession of the goods consigned, leaving to him, as a matter simply of obligation under the contract, to return the bills of exchange accepted, not as a condition precedent to the property vesting, but simply as a matter of contract." 1 If this is a correct statement of the law of England prior to the Act, the third sub-section has introduced a change, and effected assimilation to the law of Scotland. The alteration seems in accordance with true principle. Why, it may be asked, should the fact that the documents have been sent to the buyer by an agent of the seller infer a legal result different from that where they have been sent by the seller to the buyer direct? Qui facit per alium facit per se. "I think," says Lord Westbury, "the truth of the case case" (Shepherd v. Harrison) " was this, that the two documents were originally intended to be dependent the one on the other, and that they were sent together under the conviction and in the confidence that the bill of exchange would be accepted and returned to the sender in consideration of the bill of lading."2 In this statement no distinction is drawn between the act of a principal and that of an agent, and it is submitted that no such distinction should exist.3

20. Unless otherwise agreed," the goods remain at the seller's risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the

1 L.R. 4 Q. B. at p. 203. Messrs. Ker and Pearson-Gee strongly urge that the law of England is changed by the sub-section now under notice. See their Commentary on the Act, pp. 140-142.

2 L.R. 5 H.L. at p. 130. See also Lord Cairns at pp. 132, 133.

3 In Godts v. Rose (1855), 17 C.B. 229, the seller sent to the buyer a warehouse-keeper's acknowledgment to be exchanged for a cheque. The buyer kept the acknowledgment, and by its means obtained delivery, but he refused the cheque. It was held the property did not pass. The case is an illustration of sub-sect. (1), but the principle equally applies to sub-sect. (3).

buyer's risk whether delivery has been made or Sect. 20.

not.

Provided that where delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault.

Provided also that nothing in this section shall affect the duties or liabilities of either seller or buyer as a bailee or custodier of the goods of the other party.(h)

NOTES.

(a)" Unless otherwise agreed." There is nothing to prevent the parties making a special bargain inconsistent with the general rule (Sect. 55). Thus the seller may agree to take the risk for a definite period irrespective of the passing of the property,1 or the buyer may take the risk of specific goods which have still to be weighed, and the property in which has not yet passed to him. In the latter case the buyer must pay the price although the property has not passed. See Sect. 49 (2).

(b) "Property." Defined Sect. 62 (1).

(c) As to transfer of property to the buyer, see Sects. 17 and 18.

(d)" Delivery." Defined Sect. 62 (1).

(e) "Fault." Defined Sect. 62 (1)

66

(f) "Might not have occurred." 'Might" was substituted in committee for "would," and seems more accurate. See Pothier, Vente No. 58; French Civil Code, 1302, 1303; Stair, i. 17. 15; M. P. Brown, p. 366. If goods perish in the hands of the seller when they ought to have been in the hands of the buyer, it may

1 As in Martineau v. Kitching (1872), L.R. 7 Q.B. 436.

2 Martineau v. Kitching (supra). In this case the goods were paid for according to an approximate estimate, which would have been corrected by weighing had the goods not been consumed by fire. The same principle may be pushed still further. "I see no reason why a person should not agree to buy and pay for a portion of a cargo, say of sugar in bags or corn in bulk, although the actual sugar or corn to be delivered may not be ascertained before the ship is unloaded."-Per Lindley, L. J., in Stock v. Inglis (1884), 12 Q.B.D. 564 at p. 577.

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