Scottish Court of Session Decisions

This was an appeal from the Sheriff-court of Aberdeenshire for Messrs Alexander Pirie & Sons, paper-makers, Aberdeen, in an action at their instance against Captain John Warden, as owner, or representing the owner, and as master of the ship “Emily and Jessie,” of Liverpool, which, at the date of the summons, was lying in the harbour of Aberdeen. The summons concluded for delivery to the pursuers at Aberdeen of a cargo of 140 tons of Esparto, shipped on board the said vessel “Emily and Jessie” at Aquilas in Spain, to be delivered in Aberdeen, conform to bill of lading dated 25th January 1865, signed by the said defender, and endorsed to and held by the pursuers, and which bill of lading was signed in terms of a charter party, dated at Alexandria the 22d day of Nov. 1864, between W. J. Wynands, shipbroker, Newcastle-upon-Tyne, and the said defender; or otherwise, and in the event of the said defender failing to make delivery to the pursuer of the said cargo of Esparto within such space as might be appointed, then for payment to the pursuers of the sum of £1000, as the value of the said cargo, and for loss and damage sustained by the pursuers in consequence of the non-delivery and non-implement of the said charter party and bill of lading.

The circumstances of the case, so far as disclosed in the evidence were, as follows:—

In the course of the year 1864 the pursuers, Messrs Pirie & Sons, had agreed to purchase such esparto as Messrs G. & J. A. Noble, a London firm, could ship them direct to Aberdeen, and in January 1865 an arrangement was made between the two firms, whereby Messrs Pirie agreed to take, and Messrs Noble to supply, a cargo of 150 tons regularly per month. Messrs Noble having through their agents in Spain purchased the cargo of the 11 Emily and Jessie,” which arrived in Aberdeen on 28th February 1865, from the shipper, J. Fernandez Corredor, of Almeria, did, upon 8th March, telegraph to Messrs Pirie & Sons at Aberdeen as follows:—“‘Emily and Jessie.’ 140 tons Esparto arrived February 28th is for you. Bill of lading by post. 8th March 1865.” And upon the same day they wrote more fully:—“We this day sent you a telegram that ‘Emily and Jessie,’ 140 tons Esparto, arrived February 28th, is for you. We now beg to hand you the bill of lading and charter-party. We heard from our agent, the end of January, that a very good lot was being shipped by one of our friends, and we could not conceive why we had no advice of it, but we now find that as the shipper was come to England, and expected to be here before the ship arrived, he brought the bills of lading with him for the purpose of insisting on the difference infreight, this being unusually low. He has now, we expect, incurred more than that by demurrage,” &c. Upon inquiry, Messrs Pirie & Sons found that the cargo of the ship “Emily and Jessie” had been already discharged and delivered by the captain, the defender, John Warden, to another firm of paper-makers in Aberdeen, Messrs Tait & Sons, without the presentation of the bills of hiding or other documents. Pirie & Sons at once acquainted Messrs Noble of what had occurred, who accordingly wrote to Tait &Sons as follows:—“London, 10th March 1865.—We have just received advice from Messrs A. Pirie & Sons that you had received a cargo of Esparto ex ‘Emily and Jessie’ destined for them; how you had possession given to you we are not aware. We telegraphed to you this day to pay no one without our authority. Messrs A. Pirie & Sons hold the bill of lading for the delivery, and should have received the grass. We shall, of course, hold the ship and yourselves responsible for the amount, with any charges that may accrue upon it, and have given Messrs Pirie, as holders of the bill of lading, authority to settle for it. Will you write us how you obtained possession?” Messrs Tait replied:—“Inverurie Mill, 11th March 1865.—We are obliged by your favour of yesterday, just received. The Esparto per ‘Emily and Jessie’ was delivered to us by orders from the owner of the vessel, and we shall now hold it till the matter is settled.”

The present action was accordingly raised by Pirie & Sons against the master of the ship “Emily and Jessie,” founded upon the bill of lading and other documents in their hands.

In explanation of the circumstances of delivery, it was stated, and appeared from the evidence, that the vessel had been chartered at Alexandria on 22d November 1864 by W. J. Wynands of Newcastle, through his agent, Mr Hutchinson. The terms of the charter-party were as follows:—“It is this day mutually agreed between Captain John Warden, owner or master of the British or privileged good ship or vessel, the ‘Emily and Jessie’ of Liverpool, and W. J. Wynands, as agent to the freighter or freighters, as follows—viz., that the

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said ship, being warranted during the present voyage as classed and of 409 registered tons or keels of coals, now in Alexandria, and ready to load, and tight, staunch, and every way fitted for the voyage, shall, after taking in about 200 tons or more of bones, with all possible despatch, sail and proceed to her loading-place at Aquilas, and on arrival there, be ready for loading, and there take on board, as directed, a full and complete cargo of Esparto, not exceeding what she can reasonably stow and carry over and above her tackle, apparel, provisions, and furniture, and being so loaded shall, with all possible despatch, proceed to the port to which she gets orders to go with the bones, and there deliver the same, on being paid freight at and after the rate of, if at a port in Scotland, 20s. p. ton.… A brokerage of 6 per cent, on the amount of freight and primage on the quantity to be taken in, is due by the ship to W. J. Wynands, on signment of this agreement (ship lost or not lost). The vessel is to be reported by W. J. Wynands or his agent at the Custom House, the captain or owner paying the brokerage and all charges in cash, on receiving his dispatch on the vessel being loaded. The captain to sign bills of lading immediately the cargo is on board. This charter being concluded by W. J. Wynands on behalf of another party, it is mutually agreed that all liability of the charterer or his or their agents ceases as soon as the grass is shipped; and it is further agreed that the captain have and hold an absolute lien on the cargo for all freight, dead freight, demurrage, and all other claims arising from this charter-party. Penalty for non-performance of the agreement, estimated amount of freight.”

In terms of this charter-party the vessel proceeded to Aquilas, in Spain, where the captain had been instructed to communicate with D. Wentura, Gris & Co., merchants there, the agents of the above mentioned Juan Fernandez Corredor of Almeria, a place inland some sixty miles distant. Upon doing so the captain obtained his cargo from D. Wentura, Gris & Co., and upon 25th January 1865 signed a bill of lading in Spanish, of which the following is a translation:—

“I. John Warden, captain in second of the English barque, which God save, named the ‘Emily and Jessie,’ of the port of Liverpool, of the burden of 409 tons, which is safe and anchored in this port, and ready to follow her present voyage to Aberdeen, acknowledge to have received and hold within the said vessel, delivered from the warehouse of Messrs D. Wentura, Gris & Co., for behoof and risk of whom it may belong, 4620 faggots esparto Ganvillo, with 3086 Castilean quintals, otherwise 140 tons, marked as in the margin, which I promise and oblige myself, God helping me, to good safety, with the said vessel, at the said port, to deliver for you, and in your name, to your order, on payment of the freight, according to the contract, and to complete it thus, I oblige my person and goods, and the said vessel, freight, and apparel. In faith of this I put my signature. Aquilas, 29th January 1865.

“Weight unknown.

John Warden.

Received on account of freight of ‘Emily and Jessie,’ 154 dols. Spanish.

John Warden, Master.”

Upon the back of this bill of lading were endorsed the words “We place on the account of Mr Juan Fernandez Corredor de Almeria the amount of these goods.—Aquilas, &c.,

D. Wentura, Gris, & Co.”

This bill of lading was blank endorsed by J. Fernandez Corredor.

Upon the same date, 25th January, Corredor invoiced the cargo to Messrs Noble, to whom he had sold the cargo through their agents in Spain, and sent along with the invoice a bill of exchange at three months for the price, which was accepted, and duly retired by Messrs Noble. He did not, however, as already stated, send them the bill of lading, but being himself about to start for England, preferred to take it with him, and deliver it in person. This lie did not do until the beginning of March, as already narrated. At the same time, Wynands, who had had a series of transactions with Corredor, the nature of which did not appear from the evidence, but in the course of which he had been in the habit of making advances to Corredor upon cargoes of esparto, had advised Corredor of his having freighted the ship. What passed between them as to the cargo does not appear, but Corredor having as already described, dealt with it as his own, and as if Wynands was merely his ship-broker, with no farther interest in the vessel or cargo, and having disponed of it to Messrs Noble of London, Wynands also proceeded to deal with it as his property, and as if he had purchased it from Corredor, and shipped it on his own account at Aquilas. On this point all the information obtained was that Wynands had made considerable advances to Corredor, but none of them were appropriated to this or any other particular cargo. He, however, being under obligation to supply a cargo of like amount to Messrs Tait & Sons of Aberdeen, made use of this cargo to fulfil said contract, and also to cover his advances to Corredor. Accordingly, acting as charterer, he wrote the captain at Almeria, 30th January 1865: —“Sir,—By the present I beg to inform you that you must proceed with your cargo to Aberdeen, according to terms of charter-party, concluded with Mr Hutchinson in Alexandria in November last.”

On the arrival of the vessel at Aberdeen he wrote on 1st March to Messrs Tait & Sons as follows:

“Dear Sirs,—The owner of the ‘Emily and Jessie’ informs me that she has arrived at your port, and has instructed the captain to deliver the cargo to none but you, please therefore claim and land it at once. In reply to yours of the 25th ullo., the bones belong to Messrs M'Lean & Hope of Edinburgh, with whom confer. The captain signed b/1. Do not pay freight till cargo is in your possession, claim or take it legally in case of need.” On the same day he again wrote them:—“Dear Sirs,—Your telegram is to hand. The owner of ‘Emily and Jessie’ has sent orders to-day to the captain to deliver the cargo of esparto to you only. You must take delivery at once, and will hold you harmless in consequence of your so doing without having possession of bill of lading.” On 2d March he writes them:—“To-day I sent you the following telegram: ‘I suppose esparto ‘Emily and Jessie’ will be landed to-morrow. Hurry on with the discharge.’ The reason I sent you the above is on account of the shipper attempting to take a liberty with me. I trust therefore you will use the greatest despatch possible in the discharge.” Then there ensued the following correspondence relative to the delivery of the cargo to Messrs Tait & Sons, which disclosed the relative position in which the parties stood:—

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“ Inverurie Mills, 2 d March 1866.

“Mr W. J. Wynands.

Dear Sir,—The ‘Emily and Jessie’ arrived in Aberdeen yesterday morning, but we got no word till afternoon, when it was too late to go to Aberdeen, so we got nothing done till to-day. The captain required an advance of freight (£100) before commencing, to get his men paid off, and as we could not get on we had no help but give it—taking an obligation for repayment if the cargo was not delivered. Our agent, whom we had asked to look after the ship, being out of town, the captain had put himself in the hand of a broker, by whose advice he was acting. He spoke of landing the cargo under warrant, &c., which would have brought on various expenses. We did not get begun till afternoon, and have got out about twenty tons. The charter you sent us is of no use—there is another and quite different one for the esparto; if you have it, please send it down.—Yours respy,

“ Thomas Tait & Sons.

“ Newcastle-upon-Tyne,

“ Queen Street, 3 d March 1865.

Messrs Thomas Tait & Sons, Aberdeen.

Dear Sirs,—My letter of yesterday brought you invoice of esparto, per ‘Emily and Jessie,’ amounting to £757, 17s. 6d. I desired you to make all haste with the delivery, and being to-day without your communications I take for granted that by this time the cargo is in your possession, and have consequently taken the liberty to value on your good selves for £500, three months date, to my order on account, and doubt not but my draft will meet due honour. The owner has telegraphed Captain Warden to deliver the esparto to you, but in case of need, you will please inform him that Mr J. P. Schulz, at Alexandria, chartered his vessel as my agent, that I am the principal in the business, and it was according to my instructions handed him at Aquilas that he proceeded to your port.—Yours truly,

“ W. J. Wynands.”

“ Inverurie Mills, 4 th March 1865.

Mr W. J. Wynands.

Dear Sir,—We have your favour of the 3d. We have used every exertion to get out the cargo, but do not expect that there will be much over half of it out yet. We cannot get the Railway Co. to supply us with trucks. We have gone every day to town pushing it on, and hope to be about through by Tuesday afternoon. With regard to the draft you advise on us, we have to point out to you that although we have got or will get the cargo, we have no security that the captain will not reclaim it from us, and he expressly declined to say yesterday that he would not do so. From your letter received yesterday with the invoice, we infer that some difficulty will be raised or claim made. And besides, we have seen no original charter or any paper whatever connecting you with the cargo. As the bill will be coming forward, to save time and further correspondence we have written our friend Mr John Douglas, corn-factor, to see you, and arrange such a letter of guarantee from you to us as will save us from all trouble, and on receipt of this and his seeing the papers we shall honour the draft. Not being on the spot ourselves, Mr J. W. Barclay, merchant, Aberdeen, is taking care of the ship's matters for us.—Yours respectfully,

“ Thomas Tait & Sons.”

“ Newcastle-upon-Tyne,

“ Quern Street, 4 th March 1865.

Messrs Thomas Tait & Sons, Aberdeen.

Dear Sirs,—I had this pleasure yesterday, and in receipt of your favour of the 2d inst., this morning I sent you telegram as at foot, and fully calculate that the grass by this time is lodged on your premises. The fact is that I had agreed to advance the shipper a certain amount on grass against which he neglected to send bill of lading. He now owes me money, and I am compelled to protect myself. I have made him however a very reasonable proposition, and expect to terminate this business shortly and satisfactorily to all parties. I see that you have paid £100 on account of freight, what with £30 already paid in Alexandria, will represent the full amount due, therefore refer the captain to Messrs M'Lean & Hope if he wants more money. I enclose copy of the grass charter original in my possession; my clerk sent by mistake the bone charter. Pray use every despatch, and send me a telegram on Monday to say that the grass is out.—Yours truly,

“ W. J. Wynands.”

(Copy of telegram therein referred to.)

Wynands.

Tait & Sons, Aberdeen.

The esparto must be landed at once-work day and night.”

“ Newcastle-upon-Tyne,

“ Queen Street, 6 th March 1865.

Messrs Thomas Tait & Sons, Aberdeen.

Dear Sirs,—In reply to yours of the 4th inst.,

I had a call of Mr Douglas, to whose inspection I submitted original charter for esparto per ‘Emily and Jessie,’ of which you hold copy. The owner has already my guarantee with respect to the delivery in the absence of a bill of lading. The shipper is Bhaky; and because I would not give him an additional credit for about £600, withheld the bill of lading, but I am still in hopes of obtaining it shortly. Meanwhile, pray push the railway on, convert the grass into paper, and I shall take all the consequences on my shoulders.

“ W. J. Wynands.”

The cargo was all delivered before Messrs Pirie & Sons received the bill of lading, and took the steps above mentioned. In consequence of the circumstances under which the delivery was made, and the guarantee which the above correspondence contains, Mr Wynands found it necessary to sist himself in the action, and became the real defender.

The Sheriff-Substitute ( Comkie Thomson) pronounced the following interlocutor:—

Aberdeen, 27 th May 1870.—Having resumed consideration of the cause, Finds, as matter of fact that the ship of which the defender Warden was master, was chartered by the defender Wynands: That it was ordered to load Esparto on his behoof at Aquilas: That the Esparto in question was delivered on board on account, as the property and at the risk of the defender Wynands: That he effected insurances upon it: That he sold it to Thomas Tait & Sons, Inverurie: That on its arrival at Aberdeen it was demanded by and delivered to Messrs Tait: That after delivery bad been completed, a bill of lading for the cargo was sent by Messrs G. & J. A. Noble, of London, to the pursuers, endorsed to them: Finds, as matter of law, that the property of the cargo had not passed to the pursuers: That they are not entitled to insist in this action: Therefore dismisses the action, and

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decerns: Finds the defender entitled to expenses of process: Allows an account thereof to be given in, and remits the same when lodged to the auditor of Court to tax and report.

“ Note.—There does not appear to be much difficulty about the facts of this case. The defender chartered a vessel to bring Esparto to this port, insured the cargo, sold it to Messrs Tait, and when it arrived these gentlemen got delivery of it. The bill of lading was signed deliverable to order. It was indorsed by the shippers Wentura, Gris, & Co., to Corredor, the defenders' agent in Spain, the latter indorsed it blank and it came into the possession of Messrs Noble of London, who again handed it to the pursuers. It does not appear from the process what value was given by Messrs Noble for the bill of lading, and no value had been given by the pursuers.

“It is thought that where a cargo has arrived before the bill of lading and is delivered to the buyer and consignee, such delivery is good against all except endorsees of the bill of lading for value; such is the law as explained in our best authorities. It may be that Messrs Noble have a good ground of action against the defenders. They seem to think so themselves, as they have instituted proceedings in the English common law courts; but the Sheriff-Substitute is of opinion that the pursuers here have not succeeded in establishing a sufficient title to sue. The true owner of the cargo sold it to Messrs Tait. They had got delivery, and paid for it before the pursuers acquired the bill of lading, and the latter do not aver that they held it for value. The Messrs Noble are in a different position, of which apparently they have availed themselves in their own country.”

The Sheriff ( Jameson) adhered on appeal.

The pursuers accordingly appealed to the First Division of the Court of Session.

Lord Advocate ( Young) and Lancaster, for them, contended that an onerous indorsee is entitled to communicate a bill of lading gratuitously if he pleases. If he does so gratuitously the document is liable to any latent defect which might be pleaded against the indorser, but not so if the indorsation be onerous and not gratuitous. They farther disputed the proposition that the indorsation of a bill of lading after delivery of the cargo is inoperative—it may be so after lawful delivery to the right person when other badges and symbols of possession must be resorted to, but that is not the case here—and they submitted that they were entitled to take their stand upon the bill of lading alone, without entering into any of the questions which might arise between other parties connected with the ship and cargo.—Abbott's Law of Shipping, 11th ed., p. 284 et seq.

Solicitor-General ( A.R. Clark) and M'Laren, for the respondents and defenders, referred to the case of Schmaltz v. Airry, 16 Q. B. 655, and Smith's Leading Cases, 6th ed., vol. 2, 356, on the question whether, looking to the clause at the end of the charter party, Wynands could still represent himself as principal, which they contended he could. They then submitted—(1) That the indorsee of a bill of lading is subject to latent defects arising out of the title and authority of the indorser, a bill of lading being on a different footing from a bill of exchange; and (2) that a bill of lading is only of use while a vessel is at sea, and cannot transfer the cargo after it has arrived. On these points, they referred to 18 and 19 Vict. c. 111, sec. 1; Smith's Mercantile Law, 7th ed. p. 306; Gurney, 23 Law Jour., Q. B. 265; Barber, L. R. Eng. and Ir. Ap. 4, 317. They farther submitted that the use of a bill of lading is to enable the holder to vindicate the property of the cargo, which is his by another right and title; that it was not the case, as the pursuers argued, that the right of property was transferred by the simple indorsation of the bill of lading. That in the present case the cargo was not in a general ship, where the bill of lading certainly is the ruling document, but in a ship specially chartered by Wynands; that here the charter is the leading document, subject indeed to be overruled in some circumstances by the bill of lading, but not to the same extent as in a general ship. That the master was in this case the servant of the charterer, and his primary obligation was under the charter party, and that this obligation could only under certain circumstances be displaced by the bill of lading. They then went into the evidence of the nature of the transaction between Wynands and Corredor, to show that the real right of property was in Wynands; that there had been fraudulent conduct on the part of Corredor, which could not affect this real right of property, and they agreed that Messrs Pirie& Sons could only sue under this bill of lading if by its indorsation the property had been passed, which was not the case in consequence of their fraudulent proceedings, which amounted to latent defects, such as a bill of lading is subject to.

At advising—