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[Sheriff of Lanarkshire.
Held that a depositary for hire who has made no stipulation as to the period for which the deposit is to endure is not entitled to terminate the contract and insist upon the removal of the deposited goods except for a reasonable cause.
Circumstances in which a petition by a depositary for warrant to sell goods deposited with him for hire, on the refusal of the depositor to remove them, refused.
The following were the averments of the pursuer in this case:—“The defenders Millar & Young, in or about the month of August last, consigned, in name and for behoof of Devaux Frères & Cie., in the warehouse of the pursuer James Whyte, 13,021 pounds of yarn. Arrestments were on the 25th and 31st days of August last laid upon the said goods in the hands of the pursuer, in connection with an action at the instance of the defenders Millar & Young against the defenders Devaux Frères & Cie. The pursuer has frequently applied to each of the defenders to remove the goods from his custody and pay the store rent thereon. Said applications having always been refused, the present action has become necessary.”
The prayer of the action was for the Sheriff “to grant warrant of sale of 13,021 pounds of yarn, lodged in the pursuer's warehouse by the said Millar & Young, for behoof of the said Devaux Frères & Cie., in or about the month of August last, and that by public roup or otherwise, as the Court may ordain; the proceeds of sale, under deduction of warehouse rent, and all other claims incurred or to be incurred by the pursuer on account of the said goods, and of the expenses of this process, to be consigned in the hands of the Clerk of Court or otherwise.”
Devaux Frères & Cie. admitted that the yarn was stored in their name, but they denied that this was done on their behalf. They explained that they had no interest in the yarn, and stated that they were about to raise an action against Millar & Young for the price. But neither they nor Millar & Young objected to the yarn being
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removed to another store, provided that the removal did not invalidate the arrestments. The pursuer pleaded—“The defenders having refused to remove their goods from his premises, the pursuer is entitled to decree of sale.”
Millar & Young pleaded—“The pursuer having knowingly received the yarn into store, he is not entitled now to force a sale thereof.”
Devaux Frères & Cie. pleaded—“The defenders Devaux Frères & Cie. having no interest in the yarns in question, this application, so far as they are concerned, is unnecessary, and they cannot be prejudiced by it.”
The Sheriff-Substitute ( Erskine Murray) pronounced this interlocutor—“Finds (1) that the defenders Millar & Young, yarn merchants, Glasgow, having ordered from the defenders Devaux Frères, manufacturers, Belgium, certain yarns, they were forwarded to this country, when Millar & Young, considering them not to be according to order, stored them with pursuer James Whyte, storeman, Glasgow, in name of Devaux Frères, wrote to Devaux Frères rejecting them, and raised an action against them in the Court of Session, on which they arrested the yarns in pursuer's hands: Finds (2) that pursuer, finding that the yarns are inflammable, and that questions arise with his insurers regarding them, has called upon the defenders to remove the yarns, which they refuse to do: Finds (3) that thereupon pursuer has raised this action to have the yarns sold, and the balance, after deducting charges, consigned in Court: Finds (4) that defenders Millar & Young urge that he ought to remove the yarns to another store, to be stored in his name, which he declines to do; while Devaux, though putting in a defence that they have nothing to do with the matter, have not appeared further: Finds (5) that for the purposes of the case between defenders it seems proper that a fair sample be taken from the yarn to be preserved, and that this can be done without prejudice to parties' rights: Finds on the whole case and in law, that in the circumstances pursuer is not bound to retain the yarns, or to remove them at his expense and keep them in another store in his own name, and that he is entitled to warrant of sale as craved: Therefore grants warrant to Mr H. S. Macpherson, yarn merchant, Glasgow, to sell to the best advantage (except as after provided) the yarns in question; and ordains him to consign the proceeds of sale in the hands of the Clerk of Court within fourteen days after the sale, after deduction of warehouse rent, expenses of sale, and expenses of process, said proceeds to be consigned as a surrogatum for the yarns in question, and subject to any legal nexus laid upon the yarns in question by the arrestment of parties Millar & Young: Further, grants warrant to Mr Macpherson to inspect the yarns in question, and draw therefrom fair samples to the extent of one hundred pounds (100 lbs.), and store the same for the purposes of the case between Millar & Young and Devaux Frères, said selection to take place within six days, and the sale not to take place till after said inspection and selection: Remits the accounts of expenses to the Auditor of Court to tax and report, and decerns; reserving to pronounce further.”
The Sheriff ( Clark) adhered, adding this note—“The question here is, Is the pursuer bound to keep the goods for any time longer than he chooses to do so? I do not think he is. He has not undertaken to keep them for any specified period, and apparently for good reasons he now wishes to be relieved of their custody and to be paid his claim for storage. With this view he has required the defenders to take away their goods. This they have refused to do—in point of fact they refused to do anything. The pursuer has accordingly asked the Court to have the goods sold, the only alternative that remained to him. He seems fully entitled to this remedy; the sampling is a concession in favour of the defenders. I do not see that the Sheriff-Substitute could well have pronounced any other interlocutor than he has done.”
The defenders Millar & Young appealed, and argued—The contract being one without stipulation as to time, was for the safe custody of the goods as long as the person placing them in the warehouse chose and paid the rent.
Devaux Frères & Cie. (who alone appeared) argued—Such a doctrine would be a most inequitable one, and impossible to carry out. It would put a practical stop to the utility of warehouses if the warehouseman must either stipulate for a definite period of deposit or be liable to retain the goods for an indefinitely long period, no matter what changes of circumstances might take place in his condition.
At advising—
I do not think that the question is whether he is entitled to have the goods sold, because that question arises only when the defender refuses to remove them, and whether he is bound to do so or not depends on the nature of the contract between the parties. If the defender was not bound to remove the goods, then any pretence that the warehouseman is entitled to sell them is at an end.
Now, it may be observed, in the first place, that this is not a pure contract of deposit, because that is a gratuitous contract, and this is one for hire. As Mr Erskine says (iii. 1, 26)—“Depositation is a gratuitous contract on the part of the depositary. If any consideration is to be given him for his pains in keeping it, the contract resolves into locatio operarum.” This is the nature of the contract we are dealing with here. In the ordinary case there can be no doubt that it is for the interest of the warehouseman that the goods should lie in his warehouse as long as possible, that he may thereby get as large a rent as possible; on the other hand, it is for the interest of the owner of the goods to turn over his goods as rapidly as possible, and to make his money out of them, and therefore to pay as little rent as he can. Accordingly, such a case as the present is very unlikely to arise.
But when a warehouseman has received goods for custody it must be obvious that very important legal consequences follow bearing on the rights of third parties, and not merely of the parties to the contract. The goods by being deposited become liable to certain diligences to which they are not open when they are in the hands of their owner. They may be the subject of sale without actual delivery. That contract may in such circumstances be made real by constructive delivery, which would not have been the case if the goods had continued in possession of the owner. Now, to say that the warehouseman may thrust the goods out at once and without any reason, so as to defeat all the legal consequences which flow from the deposit would be a very strong thing. I should be very slow to give any sanction to such a doctrine. But in the present case the pursuer has been unable to show any justification for the course he proposes to follow. There is no ground for it upon the record. In the cases suggested by Mr Lang, I can very easily understand that the defender may be entitled to be relieved of his contract. If his title to the warehouse comes to an end he may no longer be bound to perform the contract, because it has become impossible for him to do so. And there may be other cases in which there may be a reasonable and therefore a valid ground for the contract coming to an end, but there is no such case here. The goods are yarns. One sees their nature. They may be inflammable, and may create risks and damages, but the pursuer knew that when he received them. There is nothing which he did not know then which he has since come to know. There was no reason in October for removing the goods which did not exist in August. I am very clear, therefore, that the view taken in the Inferior Court is unsound, and that the Sheriff's interlocutor ought to be reversed.
Here diligence has been used upon the goods within a month of the time when they were deposited. I do not very well see how the pursuer is to get rid of them. The Sheriff-Substitute proceeds on the ground that they are of an inflammable nature. This is not averred on the record, but if it had been averred, and were distinctly proved, I am not prepared to say that it would not have affected my view of the case.
The Court recalled the interlocutors of the Sheriff and Sheriff-Substitute respectively, and refused the prayer of the petition
Counsel for Appellants (Defenders)— Jameson. Agents— Webster, Will, & Ritchie, S.S.C.
Counsel for Respondents (Pursuers)— Lang. Agents— Hamilton, Kinnear, & Beatson, W.S.