Scottish Court of Session Decisions

On 16th January 1884 Messrs Keddie, Gordon, & Company, manufacturers, Galashiels, delivered to the North British Railway Company at their station at Galashiels a bale of tweed cloth enclosed in three wrappers. The bale was addressed to Messrs John Sutcliffe & Son, commission, shipping, and forwarding agents, Grimsby. The cloth contained in it had been sold by Keddie, Gordon, & Company to Oppenheimer & Grabowsky, Berlin, and it was being sent to Sutcliffe & Son for transmission by them to Messrs Oppenheimer & Grabowsky. Keddie, Gordon, & Company paid the carriage. On the same day Keddie, Gordon, & Company sent an invoice to Oppenheimer & Grabowsky, also a note to Sutcliffe & Son asking them to forward the bale with all speed as it was wanted urgently. When the bale, which travelled over the Midland and Manchester, Sheffield, and Lincoln Railway as well as the North British Railway, arrived at Grimsby, which it did without any undue delay having occurred, it was found by Sutcliffe & Son that the wrappers had been chafed and torn, and with the result that the cloth inside was damaged by a hole being made in one breadth of it which was next the wrapper. In consequence Messrs Sutcliffe & Sons, according to their custom in such a case, instead of sending it on by steamer, declined to send it, and intimated to the Manchester, Sheffield, and Lincoln Railway Company's agent at Grimbsy that it must be returned for repairs to the sender, and they also intimated that they would hold that company liable in case of a claim.

The bale was then sent back to Messrs Keddie, Gordon, & Company at Galashiels, where it arrived on the 25th January. It was by them re-packed, in the hope and belief that as the damage to the goods themselves was not serious Oppenheimer & Grabowsky would accept them even if the price had to be abated, as was sometimes done, in their trade. They sent it back to Grimsby on the same day. On 4th February Messrs Oppenheimer & Grabowsky wrote to Messrs Keddie, Gordon, & Company that they had no notice of the bale having arrived at Hamburg, and that as it had been such a long time on the way they had now no use for the goods. The bale, after having been to Berlin, and come back as refused by Oppenheimer & Grabowsky, was redelivered at Galashiels on the 10th March 1884.

On 17th March, Keddie, Gordon, & Company sold the bale to Messrs Henry Lee & Company, merchants, Manchester, for £29, 14s. 9d., being the best price that could be got for it, as it had been specially made for Oppenheimer & Grabowsky, and did not suit the home market. On 21st January Messrs Keddie, Gordon, & Company had written to the North British Railway Company's station agent at Galashiels, stating that as the bale was urgently wanted by their customers they feared that in consequence of the delay in transmission it would now be of no use, and that they would hold the railway company responsible for any loss that they might incur by the delay. On 12th March they again wrote to him, stating that the goods had been returned to them, and that as the loss which they had incurred through having to sell the bale at a lower than contract price was occasioned by the fault of the railway company, they would hold them liable. They also enclosed a note of their loss. A correspondence ensued between the parties, as the railway company alleged that the Manchester, Sheffield, and Lincolnshire Railway Company were responsible for the damage done to the bale, but on 25th August the North British Railway Company's agent wrote to Messrs Keddie, Gordon, & Company stating that the English railway company had “definitely informed him that they cannot admit liability for the claim, for the reason that the damage by chafing referred to was not a sufficient cause for Messrs Sutcliffe & Son returning the bale, and as the claim is not for damage done, but for loss through delay that ensued, and as the Manchester, Sheffield, and Lincoln Company neither caused nor consented to the bale being returned they are not responsible for the consequences. Under these circumstances I regret I am instructed to decline the claim.”

Messrs Keddie, Gordon, & Company brought this action in the Sheriff Court of Roxburgh, Berwick, and Selkirk against the North British Railway Company for the sum of £36, Is. 2d., made up of £62, 1s., being the invoice

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price of the goods, carriage to Grimsby, thence to Berlin, and from Berlin, and insurance, but deducting the £29, 14s. 9d. got from Lee & Company on the re-sale.

The defenders alleged that they did not contract to carry the bale beyond Grimsby; that they had done this, and that Messrs Sutcliffe & Son wrongfully refused to take the bale into their possession, but instructed that it should be returned to Galashiels. They also alleged that the contents were in no way damaged.

The pursuers pleaded—“(1) The defenders having undertaken as general carriers to forward the goods in question safely and with due despatch, and they having failed to do so, they are liable for the consequences of such failure. (2) The goods in question having sustained damage through the fault of the defenders in their transit from Galashiels to Grimsby, and the pursuers having sustained loss and injury through said damage to the amount concluded for, decree should be granted with expenses.”

The defenders pleaded—“(2) The pursuers' agent, by giving orders for the disposal of the bale when first offered to them, having constructively taken delivery thereof, the defenders were freed from any claim for damage. (3) The defenders, when the bale was delivered to them on 25th January, having conveyed the same to Grimsby, and delivered it to Messrs Sutcliffe & Son, fulfilled their contract with the pursuers, and are therefore not liable in damages to them. (4) Any loss sustained by the pursuers being purely consequential, the defenders are not liable therefor.”

After a proof the Sheriff-Substitute ( Spittal) found that through the fault of the defenders the goods failed to reach Messrs Oppenheimer & Grabowsky in due time, and were justifiably rejected by them, and that consequently the defenders were liable to the pursuers in the amount of the loss sustained by the latter, and gave decree for the sum sued for, £36, 1s. 2d..

“ Note.—… On the merits it is clear that when the bale was sent off from Galashiels it was securely and strongly packed, and I think it is also clear that when it reached Sutcliffe & Son it had received considerable damage, the three wrappings having been chafed through, and a hole having been made in the contents of the bale. At what part of the journey the damage was caused does not appear, but most probably the chafing was a gradual process during the journey. Sutcliffe & Son naturally refused to accept delivery, and the bale was returned to the pursuers. The pursuers, in order to save time, as their customers' order for the goods was pressing, simply repacked the bale, and sent it off immediately by the same route as formerly. There was no detention of the bale at Galashiels, but their return and re-transmission of the bale necessarily caused a good deal of delay. Accordingly Messrs Oppenheimer & Grabowsky, not having received the bale by 4th February, or heard of its arrival at Hamburg, wrote the letter rejecting the goods. If this bale had been sent on direct it would have reached its destination timeously, and would, there is no reason to doubt, have been accepted by Messrs Oppenheimer & Grabowsky. The delay caused by the damage done to the bale in transit to Grimsby resulted in the rejection of the goods by Messrs Oppenheimer & Grabowsky. Loss has resulted to the pursuers in consequence of this rejection, and for this loss I think the defenders are clearly liable in damages.

“It was contended by the railway company that the damages sued for are consequential damages, and that it is only for direct loss that the company can in any view be made liable. But according to the view I take of the case the damages claimed are not consequential, but direct. The goods were in consequence of the delay thrown upon the hands of the pursuers, who obtained the best price for them that they could in the circumstances, and are merely suing for the difference between that price and the contract price. According to the defenders' view the pursuers' only claim would be for the cost of repairing the wrappings and the damaged cloth, a result wholly inequitable.”

The defenders appealed to the Sheriff ( Jameson), who found that the loss sustained by the pursuers in consequence of the goods not having been timeously delivered to Messrs Oppenheimer & Grabowsky was not a loss for which the defenders were liable to make reparation to the pursuers, and therefore assoilzied them from the conclusions of the summons.

“ Note.—This action is brought to recover the loss sustained by the pursuers through the rejection by their customers, Oppenheimer & Grabowsky, of a bale of cloth of the pursuers' manufacture sent from Galashiels to Berlin. The rejection was made by Oppenheimer & Grabowsky on account of the delay which occurred in forwarding the bale, and the pursuers contend that that delay was due to the fault or breach of contract of the defenders, and that they are liable to make good the loss sustained in consequence thereof. It is not maintained that there was any undue delay in the actual carriage of the goods by the defenders from Galashiels to Grimsby on either occasion. The delay was admittedly caused by the goods being sent back from Grimsby to Galashiels by J. Sutcliffe & Son, and the main question in the case is, whether the defenders are to be held responsible for the consequence of the goods being so sent back. I am of opinion that they are not. It is proved that the bale in question sustained some damage in its transit from Galashiels to Grimsby, but the evidence both of Mr Beales and Mr Gordon shows that the damage was of a slight description—so slight, indeed, that on receiving back the bale the pursuers simply put on fresh wrappings and sent it off again the same day, apparently confident that the damage was not such as would lead to the rejection of the goods. I fail to see any reason why the same operation could not have been performed at Grimsby by Messrs Sutcliffe & Son. This firm carry on the business of forwarding agents, and were (so far as the defenders know) the sole consignees of the goods in question. It appears to me that it was their duty as forwarding agents, after they had been advised by the pursuers that the goods required quick despatch, to have held an inspection of the goods along with the representatives of the railway company, and after taking, if they thought proper, a letter of indemnity from the railway company for the damage sustained, to have put on new wrappings on the bale and forwarded it at once to Berlin,

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The witness Reed, who was for thirty-seven years port-master at Grimsby, speaks to this as the practice appropriate to a case of slight damage. Instead of doing this or anything of the kind, J. Sutcliffe & Son sent the bale directly back to Galashiels, and hence the delay which gave rise to the rejection of the goods and the damage sued for in this action. The defenders, as practically insurers of the goods carried by them, are undoubtedly liable to make good any actual damage done to goods during transit over their own line, or the lines of companies for whom they are responsible, the measure thereof being the diminished value of the goods. But in the present case that damage was trifling, and it is not claimed in this action. In certain circumstances carriers may be liable for more remote consequences of their breach of contract, provided such consequences are the direct, necessary, or natural result of the breach. Now, I cannot hold that the sending back the bale to Galashiels was the direct, necessary, or natural consequence of the damage sustained during the carriage of the goods from Galashiels to Grimsby; and it is further to be observed that the defenders got no information from the pursuers as to the ultimate destination of the goods, or as to the purpose for which they were sold, nor were they told that there was any necessity for special despatch. All the defenders contracted to do was to carry the goods to Grimsby and deliver them there, and this they did with due despatch. This being so, I think that it must be held that the damage caused by the rejection of the goods on account of delay in their reaching Berlin could not have been in the contemplation of both parties at the time the contract was entered into, and was, as regards the defenders, remote and consequential, and therefore cannot be recovered from them. The loss which the pursuers have unfortunately sustained is, in my view, the direct result of the wholly unnecessary actings of J. Sutcliffe & Son, for whom the defenders are not responsible.”…

The pursuers appealed to the Court of Session, and argued—There were two questions here—(1) Did the responsibility of sending back the goods rest on Sutcliffe & Son or on the railway company? There was no doubt that the goods had been damaged in transit by the railway company, that owing to that damage they had to be sent back, and owing to the delay so caused they arrived too late for the Berlin firm to make use of them, and were accordingly rejected. The railway company could not contend that Sutcliffe had erred, as he was their agent as well as the agent of Messrs Keddie, Gordon, & Company, and they had ample information before he sent back the goods that he was going to do so. Sutcliffe had no right to unpack the bale, as the Sheriff thought he ought to have done, to see how far the damage extended, and see if he could get it repaired without sending it back to Galashiels. It was an elementary rule that a carrier is entitled to refuse to take goods for transmission if they are damaged— Collard v. South-Eastern Railway, May 24, 1861, 30 L.J., Exch. 393; Cox and Others v. London and North-Western Railway, 1862, 3 Foster and Finlason, 77; British Columbia Saw-Mill Company v. Nettleship, June 2, 1868, L.R., 3 C.P. 499; Horne and Another v. Midland Railway Company, February 7, 1873, L.R., 8 C.P. 131; Hadley and Another v. Baxendale, February 23, 1854, 9 Exch. 341. (2) The measure of the damages—The goods had been specially made for the Berlin market, and Messrs Keddie, Gordon, & Company were entitled to the sum they would have got if the goods had been duly sent to Oppenheimer & Grabowsky as originally intended. Such damages were not consequential, but the direct result of the conduct of the defenders.

The defenders argued—Sutcliffe & Son acted as agents for the pursuers, and not for the defenders. The railway company agreed to carry the bale to Grimsby and no further, and this they did, while Sutcliffe & Son were in possession of particular information, viz., that the goods were wanted to be sent abroad at once, which the railway company did not possess— Findlay v. The North British Railway Company, July 8, 1870, 8 Macph. 959. There was a difference between loss incurred by delay and loss by actual damage—Smith's Leading Cases, ii. 570; Hadley v. Baxendale, supra. The special damage claimed here was due to special circumstances not made known to the railway company— The British Columbia Company v. Nettleship, L.R., 3 P.C. 499; Horne and Another v. Midland Railway Company, February 7, 1873, L.R., 8 C.P. 131. The company might have had no answer if Keddie, Gordon, & Company had claimed only the expense of repacking and the actual damage done to the cloth, but that was no part of their claim. Sutcliffe was the person really in fault, as he ought to have repacked the goods and sent them to Berlin. The risk of the goods whenever handed over to the carrier was in the consignee, and Oppenheimer & Grabowsky were the proper persons to sue here. This defect of title could not be cured by the consent and concurrence of the Berlin firm, as the person to whom the right of action belongs, having been obtained— Dunlop v. Lambert, July 16, 1839, Maclean and Robinson 663; Hislop v. MacRitchie's Trustees, June 23, 1881, 8 R. (H. of L.) 95.

At advising—