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Held that a prior indorsee of one of a set of two bills of lading had by especial agreement with the indorser excluded himself from a preference in an action with a second indorsee for the value of the cargo.
The facts of this case, which was a suit at the instance of the first indorsee of one of a set of two bills of lading, against a posterior indorsee for the value of the cargo, are sufficiently set forth in the interlocutor of the Lord Ordinary of 13th November 1872.—“The Lord Ordinary having heard counsel for the parties, and considered the argument and proceedings, including the proof, Finds it established that an arrangement was, on or about the 29th of January 1872, entered into between the pursuers and Messrs Noble & Company, from whom the pursuers had sometime previously acquired the bill of lading on which they found in this action, whereby the pursuers, for valuable considerations, agreed to deliver back to Messrs Noble & Company the said bill of lading, and whereby it must be held that they gave up or renounced all right or benefit they had under the same: Therefore assoilzies the defender from the conclusions of the summons, and decerns: Finds the defender entitled to expenses, subject to modification in respect of the reservation in the Lord Ordinary's interlocutor of the 7th instant: Allows an account of said expenses to be lodged, and remits it, when lodged, to the Auditor to tax and report.
“ Note.—The pursuers, on or about the 19th of September 1871, obtained right from Noble & Company to one of a set of two bills of lading of a cargo of pyrites or copper ore, then on board the ‘Doris,’ on her voyage from Seville via Bremen to Newcastle, in security of a debt owing to them by Noble & Company. The vessel had sailed from Seville on the 2d of August, the date of the bills of lading, and arrived at Newcastle about the beginning of October thereafter, when her cargo was taken possession of and realized by the defender, in virtue of the other bill of lading, of the set which he had shortly before obtained from Noble & Company for an onerous consideration, in ignorance of the right which the pursuers had previously acquired.
Noble & Company became insolvent, and were sequestrated in March last, and the present action has been brought by the pursuers, founding on the bill of lading acquired by them, and concluding against the defender for the value of the cargo of the ‘Doris,’ or at least as much of it as will satisfy the balance of debt still owing to them by Noble & Company.
There can be no doubt that as a general principle of law, when goods are at sea, the parting with the bill of lading, which is the symbol of the goods, is parting with the ownership of the goods themselves; or, in other words, that the transfer of the bill of lading for value passes the absolute property in the goods. It is equally undoubted that in ordinary circumstances the person who first gets the bill of lading, though only one of a set of two, gets the property which it represents; that he need not do any act to assert his title, as that is rendered complete by the transfer of the bill of lading itself, and that any subsequent dealings with the other of the set are subordinate to the right passed by the transfer of the first. These well established principles of mercantile law were not attempted to be controverted at the debate; and at any rate are put beyond all question by the judgment of the House of Lords, affirming that of the Court of Common Pleas and Exchequer Chamber, in the case of Barber and Others v. Meyerstein, 21st February 1870, 4 Law Reports, English and Irish Appeal Cases, p. 317. .
It may be that a fraud was committed by Noble & Company in transferring, in the present instance, to the defender the second of the set of two bills of lading, after the goods which it was supposed to represent had been already transferred and made over by them for onerous causes to the pursuers. And had it not been for the agreement referred to in the preceding interlocutor, the Lord Ordinary might have felt himself constrained to decide against the defender, notwithstanding the good faith in which he appears to have acted, and the hardship which such a decision would have imposed upon him. The question, however, has come to be, whether or not the agreement referred to has been sufficiently established. If it has, the judgment of the Lord Ordinary assoilzieing the defender is right, and in that view it is unnecessary to enter upon a consideration of some other pleas which have been put forward by the defender.
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“After a full and careful consideration of the case, the Lord Ordinary has arrived at the conclusion that the agreement in respect of which he has assoilzied the defender has been sufficiently established. The delay which the pursuers allowed to elapse, not only after the 19th of September 1871, when they obtained right to the bill of lading on which they found, but again, and especially after the 29th of January following, till the insolvency of Noble & Company, without making the slightest inquiry at Newcastle as to whether the ‘Doris’ had arrived or not, is wholly unaccountable, except on the footing that in consequence of some such agreement as that in question they had ceased to have a right to the bill of lading or any interest in the cargo. And that an agreement in relation to the pursuers' debt was entered into by them and Noble & Company about the 29th of January 1872 is beyond all doubt, and was not disputed. The testimony of Junner, their own managing clerk, and that of Miller, Noble & Company's managing clerk, concur to this extent. Not only so, but it appears to the Lord Ordinary to be sufficiently proved that by the agreement so entered into the pursuers must be held to have engaged to return to Noble & Company the bill of lading in question, and to give up or renounce all right or interest they had in it. That this was so is also stated by the witness Miller explicitly enough. The Lord Ordinary, however, must own that he is not disposed to place much, if any, reliance at all upon that individual's testimony, except in so far as corroborated and confirmed by other unexceptionable evidence. He thinks that there is such other evidence. There is Miller's letter, written by him as Noble & Company's managing clerk to the pursuers on 29th January 1872, in these terms:—‘In accordance with the arrangement come to between us and your clerk as acting for you, whereby you were to accept payment of your claim against us by a present payment of £45 to account, and by our acceptance at 2 months for the balance of £100, we beg to hand you herewith a cheque for £45, and shall be glad to have draft for £100 for acceptance. We shall also be glad to have B./L. p. “Doris” as agreed.’ And there is what appears to be the only answer to this letter that was returned by the pursuers, of date 3d February 1872, in these terms:—‘We beg to hand you enclosed our draft upon you @ 1 mo/d., amounting as per account, also enclosed, to £101, Os. 4d., which please return at once, provided with the needful.’ In this answer the pursuers do not deny or contradict in any way the statement of Noble & Company, that it was part of the arrangement between them, or, in other words, that it had been ‘agreed,’ that the bill of lading in question should be returned; and this being so, the Lord Ordinary thinks they must be held to have admitted it. They not only do not deny or contradict Noble & Company's statement that it had been agreed that the bill of lading was to be returned, but they also kept the payment of £45 which Noble & Company sent them in implement of their part of the arrangement; or, in other words, they retained and profited by the consideration agreed to be given by Noble & Company for a return of the bill of lading. The Lord Ordinary is of opinion that the pursuers were not entitled so to act, except on the footing of their acquiescence in the statement made by Noble & Company in their letter of 29th January. If they had intended to repudiate that statement in any material respect, they were bound to have said so at once; and if they had done so, Noble & Company would, unless the matter were then otherwise arranged, have been entitled to insist on a return of the £45. It is no doubt true that the pursuers obtained an acceptance from Noble & Company for the balance of their debt at one in place of two month's date, and so far Noble & Company must be held to have released their rights under the agreement; but there is no sufficient reason, in the Lord Ordinary's opinion, for holding that they had also given up their right to a return of the bill of lading. It may be said that there is no very reliable evidence of Noble & Company having insisted or pressed for a return of the bill of lading, probably because they believed, as their managing clerk says, and on the assumption that there was such an agreement as that in dispute, as was the fact, that the bill of lading was no longer of any avail. And, in perfect consistency with this view, it has been proved that the pursuers did not, subsequent to the agreement, attempt to proceed in any way whatever to enforce the right they now pretend they had under the bill of lading. It was only after the insolvency of Noble & Company, in March 1872, that they gave any indication of their having such a right, or of their holding any bill of lading at all; and yet by that time six or seven months had elapsed from its date and the time when the ‘Doris’ was to have commenced her voyage from Seville—a voyage which it is proved does not usually take more than between two or three months at the longest, and which in the present instance did not take more than two months to accomplish. The extraordinary supineness on the part of the pursuers, especially after the date of the agreement in question, is altogether unaccountable, except on the assumption that they knew they had given up or renounced all right they ever had to the cargo of the ‘Doris,’ and had agreed to return the bill of lading in question to Noble & Company.
“Independently indeed of the statement in Noble & Company's letter to the effect that the bill of lading was to be returned—a statement which the pursuers, if they did not in so many words acknowledge to be correct, must be held by their silence to have acquiesced in—there is sufficient evidence otherwise in the letter to foreclose the pursuers from maintaining their present claim. The Lord Ordinary thinks, that having regard to the whole of Noble & Company's letter, and supposing that it contained no express allusion at all to the bill of lading, it must be held that it was arranged the pursuers were to accept payment of their claim ‘by a present payment of £45,’, which they received, and by the acceptance of Noble & Company, which they also received, for the balance of their debt. Such appears to the Lord Ordinary to be the only fair and reasonable meaning and effect of Noble & Company's letter to the pursuers of the 29th of January 1872, taken in connection with the pursuers' answer to that letter of 3d February, and the state of debt referred to in that answer, in which no reference whatever is made to the bill of lading, or any security or other right held by them under that document. And this view is also supported by the fact that the pursuers, in their affidavit to their debt in Noble & Company's sequestration, allude to the bill of lading as of no use to them, and evidently do not value it as a security held by them. And the Lord Ordinary
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may add that he is rather strengthened than shaken in the opinion he has now expressed by what he must characterise as the incredible and shuffling statements made by the pursuer Paterson and his clerks in relation to the letter of 29th January. They almost go the length of denying that it was ever received or seen by any of them, although it was recovered from or produced in process by themselves. These are the grounds upon which the Lord Ordinary has proceeded in holding that the agreement in question has been sufficiently established, and in respect of which he has now assoilzied the defender.”
The pursuer reclaimed.
Authorities cited— Barber, 4 L. R. (H. L.) 317; Dobbie, 1 Macph. 63: Bryant, 4 M. and W. 775.
At advising—
The Court adhered, with additional expenses.
Counsel for Pursuers— Thorburn and G. Smith. Agents— Boyd, Macdonald, & Lowson, S.S.C.
Counsel for Defender— Rutherford and M'Laren. Agents— Jardine, Stodart, and Frasers, W.S.