Scottish Court of Session Decisions

The Bills of Lading Act 1855 (18 and 19 Vict. cap. III), sec. 3, enacts—“Every bill of lading in the hands of a consignee or endorsee for valuable consideration, representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same, notwithstanding that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not been in fact laden on board: Provided that the master or other person so signing may exonerate himself in respect of such misrepresentation by showing that it was caused without any default on his part, and wholly by the fraud of the shipper, or of the holder, or some person under whom the holder claims.”

Tyzack & Branfoot Steamship Company, Limited, Newcastle-upon-Tyne, pursuers, brought an action in the Sheriff Court at Dundee against Frank Stewart Sandeman & Sons, spinners and manufacturers, Dundee, defenders, for payment of £175, 1s. 6d., being the balance of freight due in respect of the carriage of bales of jute for which the defenders held bills of lading by the pursuers' steamship “Fulwell,” of Sunderland.

The following narrative is taken from the opinion of Lord Salvesen, infra:—“The

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facts in this case lie within a short compass, and are not seriously in controversy. The pursuers' steamer ‘Fulwell’ loaded in Calcutta between 11th August and 1st September 1909 a cargo of jute in bales for conveyance to Dundee. The cargo was brought alongside in barges, and the bales of jute were hoisted in slings of five or six at a time direct from the barge into the hold of the steamer. Native tallymen were employed by the ship to tally the cargo at each hold, and to see that the number of bales stated in the boat-note handed by the bargee to the tallymen corresponded with the number unloaded from the barge. The boat-note, besides stating the number of bales on board, also described the marks on the bales. It was part of the tallymen's duty not to receive burst or wet bales; and where any such were returned, a note of the number and the reason for rejecting them was put upon the boat-note, as well as a jotting in pencil of the number of slings and the number of bales which each sling contained, with a summation of the total number received from each barge. The principal boat-note was retained by the ship, a copy being delivered to the bargee. A mate's receipt, made out in accordance with the particulars in the boat-note, was signed by the chief officer, and from this document a bill of lading applicable to the particular parcel was made out by the shippers, containing the same particulars, and signed by the ship's agent on behalf of the master.

The first of the two bills of lading with which we are concerned in this case was for a parcel of 254 bales of jute bearing to be shipped by Ralli Brothers, and having the marks ‘Registered, 400 lbs. J.P.S. Nairangunge, 1909–10.’ On end ‘R.B.’

Of this parcel 127 bales had the quality mark 2 in red, and 127 bales the quality mark 3 in green. The other parcel had precisely similar marks, but consisted of 246 bales of jute, one-half having the quality mark 2 in red and the other half the quality mark 3 in green.

The evidence shows, and indeed this was not disputed, that the loading was carried on in the customary way, and so that it was impossible for the tallyman to check the marks on each bale, although he had an opportunity of seeing, with regard to the top layer of bales in the barge, that the marks, generally speaking, corresponded with those indicated in the boat-note. If, however, occasional bales were unmarked or had different marks, this would almost inevitably escape detection. In order to enable the tallyman effectively to check the marks, every sling would have to be laid on deck and the bales turned over with the marked side uppermost, the markings being on a piece of gunny or sacking which is on one side of the bale only, and is held in position by a continuous rope wound round it. Such a method of conducting loading is unknown at Calcutta, and would greatly prolong the operation. The practice, therefore, is for the tallyman not to pay special attention to the marks on each bale, but to accept the description in the boat-note as generally confirmed by his own observation before commencing to unload the barge.

The cargo as described in the bills of lading consisted of 28,002 bales of jute consigned to thirty-seven different consignees, and included bales of many different marks. The ‘Fulwell’ had a prosperous voyage, and arrived in Dundee about the 14th of October, when the discharge was commenced and extended over rather more than a fortnight. The method of discharge was the one customary at Dundee. The ship's stevedores hoisted the bales in slings by five or six at a time on to a raised platform, from which they were slid singly down an inclined plane which extended to the nearest shed, where the bales were received by harbour porters employed by the consignees as a body and paid by them. These porters assorted the bales according to their marks, and they were then removed by the consignee to whom each lot belonged. The removal was checked by a shipping-clerk employed by the ship, by a merchant's clerk employed by the consignees, and by a shore-dues clerk on behalf of the harbour authorities. Of the thirty-seven consignees, thirty-three received their full consignments bearing the marks specified in their respective bills of lading. The defenders received 2470 bales out of a total specified in their bills of lading of 2476. Of the number received there were ten which bore the quality mark of 2 instead of the quality mark of 3, which is an inferior quality; but the defenders naturally made no demur to taking the superior quality instead. On the whole cargo there was a shortage of fourteen bales, and in addition there were eleven bales which on 30th October were discovered to have no marks except certain marks on the ends in individual cases. None of these bales can be identified as forming part of the parcels consigned to the consignees who did not obtain their full B/L quantity, and each of them refused to accept any of these bales as forming part of their consignments. The pursuers, while not admitting that there was any shortage in the quantity delivered as compared with the quantity actually shipped, had offered to account for the value of the fourteen bales. The question in the case is whether they are also bound to account for the value of the eleven bales which they actually carried and delivered over the vessel's side but which do not bear the mark described in the various bills of lading, whose holders have not received their full quantities.

The matter is somewhat complicated by the circumstance that there is a shortage, and that this falls to be distributed over four different consignees; as also that the same consignees must, according to the pursuer's contention, take the eleven bales among them in proportion to the shortage of their several consignments. I shall, however, for the sake of simplicity treat the case as if there had been one consignment only, and as if of that consignment the whole number of bales had been

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delivered except the eleven which were found to be unmarked. How the absence of marks occurred is not made the subject of direct evidence, as indeed it could scarcely have been. The marks might conceivably have been torn off in the course of stowing the cargo or of unloading it, but no suggestion of this kind was made at the time when the question first arose, and it was only long afterwards that an examination was made of the bales in the shed, when some of the defenders' experts say that the ropes had in some cases got slack in the middle, pointing to the possibility of the pieces of gunny on which the markings were stencilled having come off. How little importance is to be attached to this examination after the goods had been exposed to the risk of much handling in the shed may be judged from the fact that two of these bales each weighing 400 lb. had bodily disappeared, having apparently been stolen in the interval. I entertain no doubt that as the quality of the jute did not correspond with any of the consignments on which there had been a shortage, the marks were not on the bales when they were shipped at Calcutta, and that this fact escaped the notice of the tally-clerks owing to the manner in which the goods were loaded on board, and the obvious interest that the bargees acting either for themselves or on behalf of the shippers would have to conceal the absence of marks on a bale by placing it in the centre of the sling. I should further add that it was admitted by counsel for the defenders that the eleven bales in question had been received by the ship at Calcutta, and that there had been no exchange of bales either at Calcutta or at any of the ports at which the vessel called, a supposition which would in any case have been entirely excluded by the evidence.”

Both bills of lading contained, inter alia, the following clauses—“Shipped, in good order and condition, by Ralli Brothers on board the steamship ‘Fulwell’ whereof is master for this present voyage, lying in the port of Calcutta, and bound for Dundee.… Bales jute at 400 lbs. being marked and numbered as per margin; and to be delivered subject to the exceptions and conditions hereinafter mentioned, in the like good order and condition, … at the aforesaid port of Dundee.… (4) The number of packages signed for in this bill of lading to be binding on steamer and owners, unless errors or fraud be proved, and any excess of shippers' marks to be delivered. Any shortage to be paid for at the spot market value on the day of the arrival of the vessel. (5) The following are the exceptions and conditions above referred to—Weight, measure, quality, contents, and value unknown.… (7) The ship is not liable for insufficient packing, or reasonable wear and tear of packages; for inaccuracies, obliterations, or absence of marks, numbers, or description of goods shipped, leakage, breakage, loss or damage by dust from coaling on the voyage, sweat, rust, or decay, except through improper stowage. Fines and expenses and losses by detention of ship or cargo, caused by incorrect marking or by incomplete or incorrect description of contents or weight, or of any other particulars required by the authorities at the port of discharge upon either the packages or bills of lading, shall be borne by the owners of the goods.”

On 29th August 1911 the Sheriff-Substitute (J. C. Smith), after proof led, pronounced this interlocutor—“Finds that the defenders, Frank Stewart Sandeman & Sons, are, under bills of lading held by them, entitled to delivery from the pursuers of 2476 bales of jute, and that they have obtained delivery of no more than 2470 bales: Finds that the pursuers are bound either to deliver the six bales still undelivered or to establish a ‘valid excuse’ for their failure to deliver them: Finds that the pursuers have failed to establish any valid excuse for non-delivery of said six bales, and that therefore the defenders are entitled to deduct the value thereof from the sum sued for: Assesses the value of said bales at £15, 5s. 4d.: Decerns against the defenders for payment to the pursuers of £159, 16s. 2d. (being the sum sued for, £175, 1s. 6d., under deduction of the said sum of £15, 5s. 4d.), with interest thereon as craved.”

The pursuers appealed, and argued—(1) Under section 3 of the Bills of Lading Act 1855 (18 and 19 Vict. cap. III) the master of a vessel might be liable for misrepresentations in the bill of lading, but the section did not apply to the owners. In this case the owners had proved that they had delivered the actual cargo which they had received and in the same state in which they had received it, and beyond this they had no further liability at common law. As carriers they were not bound by the representations in the bill of lading— Cox v. Bruce, 1886, 18 Q.B.D. 147, per Lord Esher, at p. 151, Lindley (L.J.) at p. 153, and Lopes (L.J.) at p. 154; “ The Ida,” 1875, 32 L.T. 541; Craig & Rose v. Delargy, July 15, 1879, 6 R. 1269, per Lord President at p. 1275 and Lord Shand at p. 1284, 16 S.L.R. 750, at p. 755, 760; Moes, Moliere, & Troup v. Leith and Amsterdam Shipping Company, July 5, 1867, 5 Macph. 988, per Lord President at p. 991, 4 S.L.R. 169, at p. 170; Horsley v. Baxter Brothers &: Company, January 31, 1893, 20 R. 333, 30 S.L.R. 387. (2) In any event the bill of lading itself exempted the pursuers by clause 5 from liability regarding the external marks on the bales, and by clause 7 from liability regarding their internal contents, because the express declarations of a bill of lading could qualify what would otherwise be an admission of liability— Jessel v. Bath, 1867, L.R., 2 Ex. 267, per Kelly (C.B.) and Martin (B.) at p. 273, and Bramwell (B.) at p. 274; Lebeau v. General Steam Navigation Company, 1872, L.R., 8 C.P. 88, per Bovill (C. J.), at p. 93; Parsons v. New Zealand Shipping Company, [1901] 1 K.B. 548, per Collins (L.J.), at p. 565. (3) With regard to the delivery of the bales, the pursuers had discharged the cargo by the method of discharge customary at the port of Dundee,

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and had given complete delivery of the bales to the defenders— British Shipowners' Company, Limited v. Grimond, July 4, 1876, 3 R. 968, 13 S.L.R. 623; Knight Steamship Company, Limited v. Fleming, Douglas, & Company, July 1, 1898, 25 R. 1070, 35 S.L.R. 834. It was the duty of the consignees to apportion among themselves the eleven bales, and they should do it on the principle of general average— Spence v. Union Marine Insurance Company, 1868, L.R., 3 C.P. 427, per Bovill (C.J.), at p. 436; Smurthwaite v. Hannay, [1894] AC 494, per Lord Russell of Killowen, at p. 505.

Argued for the defenders and respondents—(1) The defenders were not bound to pay the freight until the pursuers had tendered to them the goods described in the bill of lading, and if the pursuers had not actually received at Calcutta the bales specified in the bill of lading the onus of proof was on them— M'Lean & Hope v. Fleming, March 27, 1871, 9 Macph. (H.L.) 38; Smith & Company v. Bedouin Steam Navigation Company, Limited, November 26, 1895, 23 R. (H.L.) 1, 33 S.L.R. 96. On the evidence, it was clear that the pursuers had accepted responsibility, not only for the correct number of bales, but also for the marks upon them. The representations in the bill of lading did not bind the pursuer with regard to the quality of the goods, but leading marks were different from quality marks— Cox v. Bruce ( cit.) ( per Lord Esher at p. 150)—and the expression “shipped in good order and condition “in clause 1 of the bill of lading was a representation that bales marked with certain leading marks had been shipped— Compania Naviera Vasconzada v. Churchill & Sim, [1906] 1 KB 237; Parsons v. New Zealand Shipping Company ( cit.). The decision in Craig & Bose v. Delargy ( cit.) had been doubted in Delaurier v. Wyllie, November 30, 1889, 17 R. 167, 27 S.L.R. 148. (2) With regard to the delivery of the bales, the pursuers had not delivered the bales to the defenders, because even if it were held that the pursuers had tendered them, there could not be delivery to a body of unincorporated persons. It was true that in Spence v. Union Marine Insurance Company ( cit.) the bales were held to belong to the consignees in common, but that was because in that case the bales were all of the same sort, and they had got mixed up on board while in transitu—Bell's Principles, section 1298 (2). That was quite a different state of circumstances from this case. Moreover, in Smurthwaite v. Hannay ( cit.) it was held that each of the consignees had a separate claim against the shipowners. The cases of British Shipowners’ Company, Limited v. Grimond ( cit.) and Knight Steamship Company, Limited v. Fleming, Douglas, & Company ( cit.) had no application to this case. They merely decided questions of the delivery of goods to a single consignee where the identity of the goods was not in dispute.

At advising—