Sale, when completed. - Price not stipulated. - Where the Buyer's faith is followed.
Arnots v. Boyter
Date: 24 November 1803 Case No. No 40.
A foreign merchant from whom goods are commissioned, is entitled to send the bill of loading to his own agent, and to demand security from the purchaser that the price will be paid when due.
On failing to grant such security, the purchaser must answer for the loss arising from non implement.
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Moens and Son of Rotterdam, Having shipped goods to the amount of L. 225:8:3, which had been commissioned (26th November 1802) by Stewart Boyter, merchant in Dundee, the invoice was sent to him; but they sent the bill of lading to Peter and George Arnots, their own agents in this country. Four months credit was to be allowed.
When the goods arrived, (14th December), Boyter had become embarrassed in his circumstances, although there was no insolvency. Accordingly, Messrs Arnot took a protest against him; and “declined delivering the said goods, unless Mr Boyter would give sufficient security for paying the value thereof, at the expiry of the credit specified in the invoice,” otherwise that he should be liable for any deficiency of price upon a sale of the goods. Upon the idea that he was not obliged by his bargain, and that it was not consistent with mercantile practice to find security, he declined complying with their demand. The goods were lodged in a warehouse at Perth, and application was made by Messrs Arnot, to the Judge-Admiral, (January 27. 1803), praying that he should “decern and ordain the said Stewart Boyter immediately to find security for the said price of L. 225:8:3, payable as aforesaid, (that is, at four months from the date of the invoice); as also to make payment of L. 8:4:2½, as the amount of freight, duty, and shore-dues, paid by them, conform to account thereof on the back of the bill of lading herewith produced, and all other expenses attending the said goods, or otherwise; and in case of his failing or delaying so to do, to grant warrant for selling by public roup the said goods, upon such articles and conditions as shall be approved of by your Lordships; and to report the sale thereof into Court, with an account of the charges attendant thereon; to appoint the free proceeds to be paid over to the petitioner, as agent aforesaid; to decern and ordain the said Stewart Boyter to make payment to the petitioner of whatever deficiency, if any, shall arise upon account of the price, and all charges, and the net procedure of said sale; and also to make payment to the petitioner of the expense of this application, and all consequences to follow hereupon.”
This petition was followed with answers and replies, and the Judge-Admiral decerned (25th February 1803) in terms of the prayer of the petition, and found expenses due.
A warrant was also obtained for selling the goods, upon which a loss arose of L. 90:13:2.
The Judge-Admiral adhered, (13th May 1803), by refusing a reclaiming petition.
A bill of advocation against this judgment was presented, and refused, (17th June 1803).
Boyter reclaimed and,
Pleaded; By the terms of the bargain, no security was stipulated; the purchaser's credit was trusted for the price; and he was willing to proceed in fulfilling the contract on its original terms. If the purchaser bad become actually bankrupt, the seller might have stopped the goods in transitu; and this is certainly the most unfavourable case for the purchaser in which the question can be considered. The seller might have held the goods against the creditors, and insisted on taking the full advantage which the disposal of them on his own account could give him, unless they found security for the price; but if the creditors did not choose to find security, or pay the price, he must content himself with taking the goods. The seller having exercised his right of stopping in transitu, having assumed the character of proprietor rather than trust to the dividend or the usual diligence as a creditor, cannot again assume the character of creditor, raise up the contract into full force, as if it had never been rescinded, and claim for a loss upon the sale, as for a balance of the price remaining unpaid. Although it may have been lawful to stop the goods in transitu, it was not lawful for the seller also to insist upon security; and he cannot therefore have any claim for damages on account of the failure to give security. By stopping the goods in transitu, the contract is rendered null, consequently no action can possibly arise out of that contract which no longer subsists; Kincaid against Murray and Henderson, summer-session 1799*.
Answered; The foreign merchant, and his agent in this country, by offering to deliver the goods on security for the price, have fulfilled their part of the mutual engagements, and are entitled to indemnification by an actio mandati contraria. For upon just grounds of suspicion, factors are entitled to retain possession of goods belonging to their employer, not only in security of their engagements for the price of these particular goods, but even in security of any general balance of the price of goods formerly purchased; and even though it should be admitted that a factor, upon delivering the goods to a carrier or shipmaster, could not reclaim or stop them in transitu, upon a mere supposition of insolvency, this would not decide the present case, for there was here no stopping in transitu; the goods were never delivered, but sent by the foreign merchant to his own agent in this country, in whose possession they were to remain till the ultimate delivery should take place. When the commission was accepted, no security it is true, was stipulated; but circumstances afterwards arose sufficient to destroy their confidence in his credit, and entitling them to make the finding security for payment a condition suspend sive of delivery. This being the ease, they had a right to send the goods to their own agent; and the result of the purchaser's failure in due implement of his contract, must be to subject him in the damages thence arising.
The Court, (24th November 1803), upon advising a petition with answers, adhered.
Lord Ordinary, Dunsinnan.Act. Geo. Jos. Bell.Agent, Jo. Peat.Alt. Forsyth.Agent, Jo. Macglashan.Clerk, Home.
Fac. Col. No 123. p. 272.
