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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Connal & Co. v. Daunt & Co. and Others [1868] ScotLR 5_694 (18 July 1868)
URL: http://www.bailii.org/scot/cases/ScotCS/1868/05SLR0694.html
Cite as: [1868] ScotLR 5_694, [1868] SLR 5_694
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SCOTTISH_SLR_Court_of_Session
Page: 694↓
Court of Session Inner House Second Division.
v.
Facts:
(1) Circumstances in which held that the law of Scotland was to he applied that certain warrants were transferable documents, hut that their indorsation required to be followed by intimation to the warehouse keepers to perfect the right of an indorsee as in a question with competing rights constituted by arrestment or otherwise. (2) Held, in accordance with the opinion of English Counsel, that the inspectors on Daunt's estate had not by the deeds in their favour any right which could compete with that of Loder; but, as Loder's averments as to the way in which he had become possessed of the warrants as to intimation were not admitted, proof allowed.
This is a competition as to a quantity of pig-iron situated in the stores of Connal & Co., warehousekeepers in Glasgow. In December 1865 Connal & Co. received into their stores in Glasgow 45,000 tons of pig-iron, for which they granted to W. H. Daunt & Co. of Liverpool a variety of acknowledgments or warrants in the annexed form:—
“Connal & Co., warehouse-keepers, Iron Yards, General Terminus and Green Bank, south side of Broomielaw; Hyde Park, north side of Broomielaw, and Port Dundas.
“Glasgow, 19th December 1865.
We have received into our stores and entered in our warehouse hooks in the name of Messrs W. H. Daunt Co.; and we now hold to their order five hundred tons pig-iron of numbers one and three, and we will deliver to their order by endorsement hereon, ‘free on board’ here, from our stores, that quantity of pig-iron—same number and brand, on payment of the charges noted at foot and return of this warrant. (Signed)— Connal & Co.,
Warehouse-keepers.
Charges,
Rent at ¾d. per ton per month.
Agency 1s. per hundred tons if transferred.
Exd. and entd. by A. Young.”
Daunt & Co. are alleged to have obtained from Mr Giles Loder, merchant in London, an advance of £150,000 on the security of this iron; and in order to constitute that security, they are said to have delivered to Mr Loder, along with their promissory notes for the amount, the acknowledgments or warrants which had been granted to them by Connal & Co., and which W.H. Daunt & Co. blank indorsed. These acknowledgments or warrants, when thus endorsed, were delivered to Loder on and prior to 27th February 1866. The indorsation or delivery was not intimated by Loder to Connal & Co. prior to 9th July 1866, but they are said to have been intimated to them on that day. In the meantime, on 5th May 1866, Daunt & Co., having become insolvent, executed for behoof of their creditors a deed of arrangement for winding up their affairs, under inspectorship, in virtue of the English Bankruptcy Acts. The iron is now claimed by Mr Loder, on the one hand, under the indorsed acknowledgments or warrants delivered to him, and by the inspectors of Daunt & Co.'s affairs, on the other hand, under the registered deed of arrangement which had been executed. There are also creditors of Daunt & Co. claiming under arrestments used in the hands of Connal & Co. subsequent to July 1866.
The Lord Ordinary had allowed parties generally a proof of their averments. Among others, a great variety of statements were made by Loder as to English law and usage, which he maintained fell to be applied in the determination of the rights of parties. On the other hand, Daunt & Co's inspectors and the arresting creditors contended that the effect of the indorsation and the necessity of intimation to complete Loder's rights, were to be fixed by Scotch law.
Parties reclaimed.
Young and J. Mair for Loder.
Gifford and Maclean for Daunt & Co.'s Inspectors.
D.-F. Moncreiff and Watson for arresting creditors.
The Court, after argument, took the opinion of English counsel on the title of Daunt & Co.'s inspectors under the foresaid deed of arrangement. The following were the queries put:—
“I. Supposing the warehouse-keepers' warrants import an obligation to deliver the specific iron received—
1. What is the effect of the deed of arrangement, according to the law of England, as to vesting in the inspectors whatever movable subjects may then have been the property of the bankrupts, or as to entitling them to recover and take possession of such property from the custodiers of the same; and if it would be thus vested, or might be thus recovered, for whose benefit and behoof would it be so?
2. What is its effect as to giving any preference in regard to moveable subjects in competition with other parties holding prior completed rights of pledge over the same, or parties holding prior Tights in reference thereto depending entirely on personal contract?
II. Supposing the warehouse warrants to import merely an obligation to deliver the like quantity of similar iron—
1. What is the effect of the deed of arrangement,
Page: 695↓
2. What is its effect in competition with a prior assignment from the bankrupts in security or absolutely, not followed by intimation of that assignment to the warehouse-keepers, where such intimation is necessary in law to complete the right of the assignee ?”
The following opinion was returned by Sir Roundell Palmer and Mr de Gex, the counsel consulted:—
“1. On this supposition, we think that the deed of arrangement has no effect, according to the law of England, as to vesting in the inspectors whatever movable subjects may have been the property of the bankrupts, or as to entitling them to recover and take possession of such property from the custodiers of the same under such circumstances as are stated in the case, or as to giving any preference in regard to moveable subjects in competition with other parties holding prior completed rights of pledge over the same, or parties holding prior rights in reference thereto, although depending entirely on personal contract.
2. On this supposition, we think that the deed has no effect, according to the law of England, as to entitling the inspectors to demand the delivery of the iron due under the warrants, or in competition with a prior assignment from the bankrupts in security or absolutely, although not followed by intimation of that assignment to the warehousekeepers.”
The Court unanimously held that the law of Scotland was to be applied in determining the rights of parties over the iron in question; that the warrants in question were transferrable documents, but that their indorsation required to be followed by intimation to the warehouse-keepers to perfect the right of an indorsee as in a question with competing rights constituted by arrestment or otherwise. They also held, in acordance with the above opinion of English counsel, that the inspectors on Daunt's estate had not by the deeds in their favour any right which could compete with that of Loder; but as the averments made by Loder as to the way in which he had become possessed of the warrants, and as to his having intimated to Connal & Co. that he held them, were not admitted, they allowed him a proof thereof, and to the competing claimants a conjunct probation.
Solicitors: Agent for Loder— John Wright, W.S.
Agent for Daunt & Co.'s Inspectors— Andrew Beveridge, S.S.C.
Agents for Arresting Creditors— Neilson & Cowan, W.S.