Scottish Court of Session Decisions

In the beginning of September 1864, D. & G. Black, bakers, Glasgow, sold to the now deceased Alexander Bannatyne, grain merchant, Glasgow, 200 bags seconds flour, 160 bags thirds, and 400 bolls bran, the expected produce in seconds, thirds, and bran of 2000 bolls of wheat. The wheat was then lying in the store of the Clayslap Mill, Glasgow, which belongs to the Glasgow Incorporation of Bakers. Bannatyne obtained a delivery-order from the sellers in the following terms:—“Glasgow, 3d September 1864. Mr Jno. Thomson, Clayslap Mill, give Mr Alexander Bannatyne all the seconds, thirds, and bran from the 2000 bolls wheat we are just putting on the mill. (Signed) D. & G. Black.” This order was intimated to Thomson, the head miller, about a fortnight after its date, and he thereupon made the necessary entry in his order-book. By this time part of the wheat had been brought from the store to the mill, and was being ground. The whole of the wheat was brought from time to time thereafter, but was not completely ground till November following. As it came off the mill it was weighed and put into bags belonging to the sellers, with the exception of 170 which belonged to Bannatyne, and were filled with bran, a note of the weight of each bag being sent to the sellers. Prior to 13th October 1864, Bannatyne had obtained delivery of a portion of the flour to himself, and part to his orders. On 13th October Bannatyne, who had stuff from other parties lying at the mill subject to his orders, transferred to Michael Rowan, baker and grain merchant, Glasgow, for onerous considerations, 145 bags seconds, 110 bags thirds, and 445 bags bran, quantities which corresponded with what remained of his purchase from D. & G. Black. On the same day Bannatyne wrote out a delivery-order, which was intimated by his clerk to Thomson, the miller, who thereupon wrote an acknowledgment to Rowan that he had transferred the flour and bran to his account, and would hold them to his orders. Bannatyne died insolvent on 18th December 1864, a large portion of the price (£176, 5s.) being then, and still, unpaid. The quantities of flour and bran last mentioned were still lying in the mill. On 14th January 1865 the law agents of D. & G. Black wrote to Thomson desiring him not to make any further delivery of the flour and bran. On the 16th January, however, a portion of the bran was delivered to a third party on the order of Rowan; and on the same day D. & G. Black presented a petition in the Sheriff-court of Glasgow praying to have the Incorporation of Bakers interdicted from delivering the remainder of the goods to Rowan, or any other person but the petitioners, until the balance of the price due by Bannatyne was paid. They alleged that by the terms of the contract of sale, and by the custom of the grain trade in Glasgow, they were bound to transfer the goods into the purchaser's own bags, and to deliver them at any place in Glasgow named by the purchaser, and pleaded that, the goods being still undelivered, the purchaser from them insolvent, and the price unpaid, they were entitled to stop delivery. Rowan alleged that when he purchased the goods they were in a deliverable state; weighed, set apart, and distinguished, and all ready for the purchaser's orders; nothing essential remained to be done by the seller or any one; and pleaded that, Bannatyne having got delivery of the goods by transfer order duly intimated, the pursuer could not insist in the action. A proof was taken in which the facts above stated were brought out; and it appeared that the practice in grinding and delivering grain at the Clayslap Mill and in Glasgow is as follows:—Members of the Incorporation of Bakers, to which the sellers belonged, are charged one shilling per boll for grinding the wheat and delivering the produce in Glasgow or the neighbourhood, the Incorporation having a contract with a carter to perform the cartages. For the same charge the Incorporation,

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if there be a sale, are bound before delivering to empty the flour and bran from the grister's ( i.e., the seller's) bags to those of the purchaser, which the latter is bound to provide. The Incorporation also, without additional charge, give the use of the mill as a store till the flour and bran are taken away, for which there is no fixed time. The accounts for “grinding and cartage” at the above rate were charged to and paid by the sellers. It also appeared that the flour and bran usually lie for a longer or shorter time in the seller's bags after being sold, and that whenever the purchaser sends his bags the miller turns over the stuff into them, and delivers them to the purchaser or his order at any place within the Incorporation carter's contract, and that without communicating with the seller. The bags, after being filled and weighed as the flour and bran came off the mill, were set aside, the seconds by themselves, and the thirds and bran among the general stock of the sellers. Thomson, the miller, stated that he had not made any entry of the transfer from Bannatyne's to Rowan's account, and had no books for the purpose, and that he had no authority from the Incorporation to grant the acknowledgment to Rowan, though he had occasionally granted similar documents to gristers of wheat, but that he would not have delivered the stuff to any one but Rowan or his order.

The Sheriff-substitute ( H. G. Bell) on 12th March 1866 pronounced the following interlocutor:—“Finds—(1) in point of fact, that on the 3d September 1864 the pursuer sold to the now deceased Alexander Bannatyne all the seconds, thirds, and bran to be obtained from 2000 bolls wheat they were then putting on the mill, conform to delivery-order, No. 18–2, in Bannatyne's favour: Finds that the said wheat produced 200 bags seconds, 160 bags thirds, and 400 bolls bran, all of which, as made, were deposited in the stores connected with Clayslaps Mill, Partick, belonging to the defenders, the Incorporation of Bakers: Finds that the cumulo price payable by Bannatyne for the goods was £345, and of that sum £176, 5s. remains unpaid, Bannatyne having died insolvent on 18th December 1864: Finds that on 13th February 1864 Bannatyne, for onerous considerations, transferred to the defender Rowan 445 sacks bran, 145 sacks seconds, and 110 sacks thirds, being all the bran and so much of the seconds and thirds he had bought from the pursuers, conform to transfer—note, No. 18–1, addressed to John Thomson, miller at Clayslaps Mill; and on the same date Thomson gave Rowan the acknowledgment, No. 12, that he had transferred as requested, and held the goods to Rowan's order: Finds that the whole seconds, thirds, and bran sold by the pursuers to Bannatyne were not finally gristed till 26th November 1864, and as they came off the mill they were put by the miller into the pursuers' bags, with the exception of 170 bags bran, which were put direct into Bannatyne's bags: Finds that at the date of the institution of this action 170 bags of the bran remained in the pursuers' bags, and the remainder had either been transferred to Bannatyne's bags, or been delivered on Bannatyne's and Rowan's orders: Finds that at the same date 145 bags seconds and 110 bags thirds remained in the pursuers' bags, and the rest had been delivered as instructed by No. 26–5: Finds it proved that it was a part of the bargain at the time of the sale by the pursuers to Bannatyne that the purchaser was to provide his own bags, and that the seller was to get the stuff tusked or turned over into said bags, and thereafter delivered free at any place named by the buyer within certain limits: Finds (2) in point of law, that where goods are, at the date of sale, in the hands of a third party, such as a wharfinger, miller, or storekeeper, notice to the custodier, whether he makes an entry in his books or not, operates as a transfer of the property, provided nothing remains to be done by the seller to put the goods in a deliverable condition, but if anything remains to be done, then no complete constructive delivery or transfer has taken place, notwithstanding that a delivery-order has been given to the buyer, and a transfer-entry made in the custodier's books: Finds that in the present instance there was no complete transference to Bannatyne as long as the goods remained in the pursuers' bags, it being a condition of the sale that they should be tusked by the seller, and at his expense, into the purchaser's bags, to put them into a deliverable condition, and till that was done the pursuers retained their right to stop in transitu, as against Bannatyne, in the hands of the custodier: Finds that when the vendee's right is incomplete, a second or sub-vendee can be in no better situation than his vendor in a question with the original seller, and it was accordingly expressly laid down in the case of Dixon, June 7, 1833, 5 Barn, and Ald., p. 313, that ‘it is a general principle of law that a man who has not the property and right of possession in goods cannot transfer them to a vendee, and therefore, if the original vendor chooses to retain or stop in transitu, a second vendee is in no better situation than the first:’ Finds, farther, that whatever claim Rowan may have against the storekeeper in consequence of the terms of the acknowledgment, No. 12, held by him, the obtaining of such acknowledgment being, as regards the pursuers, res inter alios, they are in no way bound by it: Therefore, and in as far as relates to the seconds, thirds, and bran still lying to the extent above set forth in Clayslaps Mill in the pursuers' bags, repels the defences, and continues and makes perpetual the interim interdict formerly granted; but, in as far as regards the bran, which has actually been transferred to Bannatyne's bags, Finds that complete constructive delivery of said bran has taken place, and the property in it has passed, so as to bar the pursuers' right to stop in transitu: Finds, as regards the seconds and thirds actually set out from the mill, that they are not within the conclusion for interdict; Therefore, in as far as said bran, seconds, and thirds are concerned, sustains the defences, and, as regards the bran, recals the interim interdict: Finds, as regards expenses, that the pursuers have been to a large extent successful in their contention, whilst the defender Rowan refused to admit that they had any right to interdict at all: Therefore finds said defender liable in expenses subject to some modification; allows an account thereof to be given in, and remits the same to the auditor to tax and report: Finds, as regards the defenders, the Incorporation of Bakers, that they had no interest in the question between the pursuers and Rowan, and as there was no conclusion for expenses against them, there was no occasion for them entering appearance, Therefore, finds no expenses due to or by them, and decerns.”

The Sheriff ( Alison), on appeal, pronounced this interlocutor:—

“Having heard parties' procurators under their mutual appeals upon the interlocutor appealed against, and made avizandum, and considered the

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record, proof adduced, and whole process, dismisses the appeal for the defenders, the Incorporation of Bakers, and adheres to the interlocutor appealed against in so far as they are concerned, for the reasons stated by the Sheriff-substitute, and upon the mutual appeals for the pursuers, and the defender Michael Rowan: Adheres to the interlocutor complained of in so far as the findings in point of fact are concerned; but finds, in point of law, that the original sale and transfer of the produce of the 2000 bolls of wheat by the pursuers to Bannatyne on the 3d of September 1864, and the subsale of a portion thereof by Bannatyne to the defender Michael Rowan by the delivery-order, 18–1, dated 13th October following, followed by the written acknowledgement of the same date, granted by the party Thomson, the keeper of the mill where the grain was stored, to the defender Rowan, No. 12, stating that he had transferred as requested, and held the goods to Rowan's order, was complete delivery, and that the mere circumstance of the grain not having been shifted from the pursuers' bags into bags of the defenders' own, was immaterial as in a question between the original vendors and vendees: Therefore, finds that the pursuers, the original sellers to Bannatyne, had no grounds in law for applying for an interdict against delivery to the defender Rowan of any portion of the grain so transferred to him: Sustains the defences for Rowan, and recals the interdict granted; and on the matter of expenses, in respect said defenders' pleas have in the end been entirely successful, Finds him entitled to expenses against the pursuers; Appoints an account thereof to be given in, and remits to the auditor to tax the Same, and report, and decerns.

(Signed) A. Alison.”

“ Note.—This case is of great, the Sheriff may say, without fear of exaggeration, of unexampled importance, for it involves the principles on which the sale of that extensive class of goods is to depend, which are sold and transferred without any actual delivery or change of possession following, or any farther implement of the transfer than an intimation of the sale to the warehouse-keeper of the store where the goods are stored, to be held for behoof of the purchaser, and at his risk. No one need be told how numerous are the transactions of this description in this great commercial city, and how frequent it is for great parcels of goods,—most frequently in commerce, such as iron, cotton, sugar, and grain,—to be sold upon a mere delivery-order, afterwards intimated to the storekeeper without any actual delivery or change in the possession of the goods taking place. It may safely be affirmed that, in the single article of iron, transfers of this sort, amounting to millions of pounds sterling, have taken place in Glasgow within the last six months. It is of the highest importance in a matter of such frequent and extensive mercantile usage, to have it distinctly understood what is requisite in law to complete the delivery, and make the vendor secure in selling, and the vendee in accepting the transfer and paying the price.

It is a well known principle of Scotch law, taken from the Roman traditionibus et usucapionibus, non nudis pactis dominia transferuntur. But though this rule is abundantly distinct, and solves all cases in which moveables pass from hand to hand by sale, it does not explain the cases in which goods are transferred in the hands of a third party, and never quit his possession or go out of his hands at all till finally delivered to the last of, possibly, a long chain of vendees. In reference to such cases the law has long ago been settled, both in Scotland and England, on the footing that delivery, though made not to the vendee himself but to some third party for his behoof, is held to be complete, and the right of stoppage in transitu on the part of the vendor barred, if the warehouseman or storekeeper, in whose store the goods are lying at the time of the sale, receives instructions to hold them for the vendee's behoof, and enters them accordingly in the store books, as held for the exclusive behoof of the vendee, and entirely at his risk. In this way goods lying in a bonded warehouse or public mill are held to be effectually transferred from a vendor to a vendee, provided, at the date of sale, the goods are separate and distinguishable in the hands of the storekeeper from other goods of the same sort, and nothing remains to be done as between the vendor and vendee to complete the entire cession of the whole rights of the vendor over the goods to the vendee. Where goods are in the hands of a storekeeper, or, as in the present case, of a miller, this completed transfer is effected by the intimation of the sale to the custodier of the goods, and the entry of the purchaser's name in his books as the owner. All this took place in the present case, and, in addition, the custodier addressed a letter to Rowan, the purchaser, intimating the entry of his name in the mill-books, and stating that the goods were held for his behoof, and at his risk.

So far both parties are agreed that this is the law in the general case upon which the practice of merchants in innumerable transactions is every day rested. But the pursuers contend, that in the present case something more was necessary to be done to complete the sale of the grain, which was lying in the mill for the purpose of being ground at the date of the sale by the pursuers, D. & G. Black, to the now deceased Alexander Bannatyne, on 3d September 1864, and the transfer by the latter to the defender Rowan on 13th October following, and the additional thing which they contend was necessary was a shifting of the grain or flour from the pursuers' bags into those of the purchaser from them. It is alleged that, by the custom of trade at Glasgow, such transference of grain or flour from the bags of the vendor into those of the vendee is necessary to complete the sale, and that where this shifting into the new bags has not taken place—which is the species facti in regard to part of the grain here—the sale is not complete, something requiring to be done to make the transfer equivalent to real and actual delivery, and that, meanwhile, the grain was liable to be reclaimed or stopped as in transitu by the original sellers, as still the owners. The Sheriff-substitute has given effect to this plea in regard to that part of the grain which was still in the original sellers' bags, although he holds the reverse, and that the delivery was complete in regard to those portions of the flour which had been transferred to the pursuers' bags. The Sheriff cannot see any solid ground for this distinction. He apprehends that it is not any local custom at Glasgow in regard to the shifting of bags, but the general principle of law applicable to real or constructive delivery which must regulate the matter, and that the transfer of the grain in question by Bannatyne to Rowan, and the intimation of the sale made to the miller, and the entry of that transfer in the mill books, followed by the written intimation of such entry having been made to the purchaser, completed the latter's right, and barred

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all further right to stop the goods, as in transitu, at the instance of prior owners.

When it is said that, on general principles of law in regard to delivery, it is to be held that the sale is not complete as long as one thing more requires to be done in regard to the goods, this means only that nothing more requires to be done as between the vendor and vendee. It is quite immaterial what requires to be done afterwards as between the vendee and the storekeeper, or any party to whom the goods may be afterwards transferred, in order to getting possession of them. The storekeepers, in the present case, are said to have a custom of charging new bags, along with their charges for grinding, against the purchaser, and to be bound to deliver the ground grain anywhere within the parliamentary limits of Glasgow for a charge of a shilling a bag. But all that is res inter alios as to the sale between the vendor and vendee. It was no part of their bargain that the grain should be put into new bags after being ground, nor is there any law which recognises the shifting of bags as the test of real and actual delivery. The test of that is to be found in the transfer of a delivery-order to a purchaser upon the storekeeper who holds the goods, and the entry of the transfer in the store-books. It is of no more consequence for the grain being put into new bags than whether those bags were white or grey. Be the bags new or old, white or grey, the flour they contain was, after intimation to the storekeeper of the transfer, and entry of it in the store-books, held by the storekeeper exclusively for behoof of the vendee, and as to him the delivery was final and complete, as much as the transfer of debt is by an intimated assignation, though the debt assigned has not been actually uplifted by the assignee. If any other rule were adopted, it would lead to incalculable confusion and litigation, and disturb mercantile transactions of the most important kind. The moment you depart from the principle that the test of real and completed delivery is not to be found in the fact that the goods have arrived at the end of their destination, or that they are put at the disposal of the purchaser, but that something ulterior requires to be done with the goods for behoof of the purchaser, and, under a local custom, or an agreement with the storekeeper, you are landed in an endless multitude of specialities depending upon local usage, or the whims of parties. In the present case, ‘the something additional’ is stated to be putting the flour in the miller's hands into different bags. In the case of a sale of iron lying in a yard, it might, with equal plausibility, be pleaded that the sale was incomplete, notwithstanding an intimated delivery-order, till the iron was put on the purchaser's carts. Sugar lying in a bonded warehouse might in this way be held to be undelivered, though it had passed through a hundred hands, till the last vendee shifted it into his own barrels. In short, there would be no end to the variety of local requisites that might be held to be requisite to complete the sale of an article in the possession of a third party. All these complications and all that confusion are avoided by a simple adherence to the general rule of law, that a sale is completed, and the right of stoppage in transitu by the seller barred, by the goods, if sold, in transitu, having arrived at their final place of destination as between vendor or vendee, or if sold, when in possession of another, by intimation of the sale to that other, that they are to be held for the purchaser's behoof, and an entry of the transfer made in the store-books.”

The pursuers advocated.