Scottish Court of Session Decisions

The Sale of Goods Act (56 and 57 Vict. cap. 71), enacts, sec. 45 (1)—“Goods are deemed to be in course of transit from the time when they are delivered to a carrier by land or water, or other bailee or custodier for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee or custodier. (2) If the buyer or his agent in that behalf obtains delivery of the goods before their arrival at the appointed destination, the transit is at an end. (3) If after the arrival of the goods at the appointed destination the carrier or other bailee or custodier acknowledges to the buyer or his agent that he

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holds the goods on his behalf, and continues in possession of them as bailee or custodier for the buyer or his agent, the transit is at an end, and it is immaterial that a further destination for the goods may have been indicated by the buyer. … (7) Where part delivery of the goods has been made to the buyer, or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession of the whole of the goods.”

Mechan & Sons, Limited, engineers, Scotstoun Works, Glasgow, pursuers, raised an action in the Sheriff Court there against the North-Eastern Railway Company, defenders. They claimed payment of the sum of £61, 10s., being loss and damage sustained by them in respect of the defenders' wrongful delivery of a galvanised steel lifeboat sold by them to Sir James Laing & Sons, Limited, Deptford Yard, Sunderland, and consigned to them, but owing to the insolvency of said Sir James Laing & Sons, Limited, stopped by the pursuers in transitu while in the hands of the defenders. They averred that, notwithstanding the said stoppage in transitu, the lifeboat was subsequently delivered by the defenders to Sir James Laing & Sons, Limited, and that the price of the lifeboat had not been paid.

The circumstances of the case appear from the following narrative given in the opinion of the Sheriff-Substitute (A. O. M. Mackenzie)—“The boat was one of two built by the pursuers for Sir James Laing & Sons, Limited, of Sunderland. By the terms of the contract between Sir James Laing & Sons and the pursuers, the place of delivery was the Boathouse Shed, Deptford Yard, Sunderland, and the pursuers were bound to pay the expense of carriage to that place. The two boats were delivered to the Caledonian Railway Company at Whiteinch Station on 6th February for the purpose of being carried to the place of delivery named in the contract of sale, but were consigned at a rate which only covered the cost of carriage from station to station. The Caledonian Railway Company having carried the boats to Carlisle, forwarded them by the defenders' railway to Sunderland. The station on the defenders' railway to which goods for Sir James Laing & Sons were in use to be carried was Millfield Station, and the boats were accordingly conveyed by the defenders to that station, which they reached on the morning of Saturday, 8th February. Millfield Station is about one-and-a-quarter miles from Deptford Yard, and the practice was that goods arriving at the station for Sir James Laing & Sons were carted to the yard by M'Laren & Company, carting contractors, who had general instructions to that effect from Laing & Sons. On 8th February, the defenders' foreman informed the foreman of M'Laren & Company of the arrival of the boats, and told him that he would have them at the crane for removal on the morning of Monday, the 10th. On the morning of 10th February, the waggons on which the boats were loaded having in the meantime been taken to the crane, one of M'Laren's men brought a pole-cart to the station, loaded one of the boats, and carted it to Laing & Sons. He intended to return for the other, but in the meantime the defenders learnt that Laing & Sons had suspended payment. At this time Laing & Sons owed the defenders a considerable sum for the carriage of other goods, and by the contract between them the defenders were entitled, in the event of Laing & Sons suspending payment, to detain any goods belonging to them which might be in their, the defenders’, possession, and upon their premises. The defenders accordingly resolved to retain possession of the boat which had not been removed from the station, and informed the foreman carter that they would not allow him to remove it. Two or three hours later the defenders received notice from the Caledonian Railway Company, on behalf of the pursuers, to stop delivery of the boats, and a request for re-delivery to the pursuers of the boat remaining at Millfield Station was subsequently made. Notwithstanding this notice and request by the pursuers, the defenders delivered the remaining boat to the liquidator of Laing & Sons on 6th March. The pursuers, who have not been paid for the boat, contend that this was a wrongful act on the part of the defenders, and claim damages.”

The defenders pleaded, inter alia—“(3) The transit of the lifeboat, the price of which is sued for, having ended at Millfield Station, and that after arrival there the defenders being only custodiers thereof for the said Sir James Laing & Sons, Limited, defenders ought to be assoilzied with expenses. (4) Alternatively, the freight charged being at a special rate and covering only transit from Whiteinch Station to Millfield Station, the transit ended at said Millfield Station, and, in any event, ended after refusal of delivery by the defenders to the said Sir James Laing & Sons, Limited, the consignees. (7) The defenders having exercised their right of lien prior to the alleged notice of stoppage, and not having thereby enlarged the pursuers' right to stop in transitu, ought to be assoilzied with expenses.”

On 7th February 1910 the Sheriff-Substitute pronounced this interlocutor—“ Finds in fact (1) that the boat referred to was in course of transit to the buyers Sir James Laing & Sons, Limited, at the time when defenders received notice of the pursuers' claim to stop the same in transitu; (2) that after receiving said notice the defenders delivered the said boat to the buyers: Finds in law in these circumstances that the defenders are liable to the pursuers in damages; assesses the same at the sum of sixty-one pounds ten shillings: Therefore decerns against the defenders as craved.”

Note.—“The main question in this case is whether the boat referred to on record was effectually stopped while in the course of transit to the buyers.

The circumstances in which this question arises are as follows—“… [ After the

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narrative above quoted] …—The general rule as to the duration of the transit of goods consigned in pursuance of a contract of sale is that they ‘are deemed to be in course of transit from the time when they are delivered to a carrier for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier’—Sale of Goods Act 1893, sec. 45 (1). In the present case it is clear that the boat to which the action relates had not actually been delivered to Laing & Sons when the notice of stoppage in transitu was received by the defenders, for it was still in the defenders' station. But the defenders contend that there had been constructive delivery of the boat before that notice was received, and consequently that the transit was at an end. In support of this contention the defenders' agent founded, in the first place, on sub-section 3 of section 45 of the Sale of Goods Act. It is enacted by that subsection that ‘if after the arrival of the goods at the appointed destination the carrier acknowledges to the buyer, or his agent, that he holds the goods on his behalf, and continues in possession of them as bailee or custodier for the buyer or his agent, the transit is at an end, and it is immaterial that a further destination for the goods may have been indicated by the buyer.’ It appears to me that this sub-section is not applicable to the circumstances of the present case, because Millfield Station was not the appointed destination of the boats. The appointed destination in the sense of the section is the destination agreed upon between the seller and the buyer — Kendall v. Marshall, L.R., 11 QBD 356; per cur. in ex parte Cooper, L.R., 11 Ch. Div. 68—and as to what that was in this case there is no room for doubt, for Laing & Sons' order, which contains the terms of the contract between them and the pursuers, distinctly specifies the boat builders' shed at their yard as the place of delivery. The boats accordingly had not arrived at their appointed destination when notice of their arrival at Millfield Station was given to the foreman of the carting contractors, and consequently, even if that notice could otherwise be regarded as amounting to an acknowledgment in terms of the sub-section, which I do not think it can, it was not given under the conditions postulated by the sub-section. It follows that it could not have the effect of ending the transit.

The defenders' agent further founded on sub-section 7 of section 45 of the Act, which enacts that ‘when part delivery of the goods has been made to the buyer or his agent in that behalf, the remainder of the goods may be stopped in transitu, unless such part delivery has been made under such circumstances as to show an agreement to give up possession of the whole of the goods.’ He argued that in the present case the delivery of the one boat was given in such circumstances as to show an agreement to give up both. I cannot agree. There is a presumption against actual delivery of a part of a consignment of goods operating as constructive delivery of the whole, especially where as in the present case the goods are clearly divisible— ex parte Cooper, L.R., 11 Ch. Div. 68; Kemp v. Falk, L.R., 7 App. Cas. 573, per Lord Blackburn, at p. 586; Bolton, L.R., 1 C.P. 431, per Erle, C.J., at p. 440—and I cannot find in the circumstances of the present case anything to rebut that presumption. The defenders were no doubt ready to deliver both boats before they heard that Laing & Sons had suspended payment, and were even anxious that they should be removed as soon as possible. But I do not find in the evidence proof that there was a concluded agreement between the defenders and the carting contractor on the one hand to give up, and on the other to take possession of both boats. Further, the agreement, if there was any, was between the defenders and the servant of the carting contractor, and I do not think that the contractors' servant can be regarded as having been the agent of the buyers for the purpose of taking delivery. His sole duty was to cart the goods to the buyers' yard, and if delivery was made to him it was made in order that the goods might be forwarded to their appointed destination under the contract of sale. Until they reached that destination the transit in my opinion was not at an end.

For these reasons I am of opinion that the second boat had not been delivered either actually or constructively before the notice of stoppage in transitu was received by the defenders, and that the defenders were therefore in fault in delivering the second boat to the liquidator. It follows that they are liable in damages, and I think it proved that the loss sustained by the pursuers is equal to the sum sued for, being the price which Laing & Sons had agreed to pay them.”

On 7th June 1910 the Sheriff ( Gardner Millar) pronounced this interlocutor—“Recals the interlocutor of 7th February last: Finds in fact that the boat referred to in the petition was not in course of transit to the buyers, Sir James Laing & Sons, Limited, at the time when the defenders received notice of the pursuers' claim to stop the same in transitu: Finds in law that the defenders did not commit a wrongful act in subsequently delivering the said boat to the liquidator of the said company, and are not liable in damages to the pursuers therefor: Therefore assoilzies the defenders from the conclusions of the action, and decerns.”

Note.—“The agents for both parties stated that they accepted the statement of facts contained in the learned Sheriff-Substitute's note, with this exception, that the agent for the defenders maintained that the goods were not delivered to the Railway Company for the purpose of being conveyed to the place named in the contract, namely, the Boathouse Shed, Deptford Yard, Sunderland, but to Millfield Station of the defenders' company. Under the contract of sale undoubtedly the place of delivery was to be the Boathouse Shed referred to,

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but under the contract of carriage with the Railway Company it was the station, as the contract was for conveyance from station to station. It seems clear from the evidence that the Railway Company was not to do any carting either from or to the railway system. In my view of the case, the question of which of these two places was the place of delivery is not of any real consequence.

The first question of importance is, what was the position of the carting contractor who took delivery of the first boat, and came prepared to take delivery of the second? It is not averred that the pursuers made any arrangements for the conveyance of the boats from the station of the Railway Company to the Boathouse Shed at Deptford. It is proved that the Railway Company did not employ any carriers at all, and did not hold themselves responsible for the carting. No express contract for the conveyance of these boats from the station to the yard was entered into by the purchasers, Sir James Laing & Sons, Limited. It appears, however, that there was a firm of carting contractors at Millfield Station named M'Laren & Company. One of the partners, named Mr Gray, was in the employment of Sir James Laing & Sons, Limited, as iron-order clerk, and at the same time carried on an independent business as carting contractor. Laing & Sons were in the habit of putting all the carting they could in the way of Messrs M'Laren, of which Mr Gray was a partner. Messrs M'Laren without any special instructions were in the habit of taking any goods which arrived at Millfield Station addressed to Messrs Laing to their yard, and were paid by Messrs Laing. There seems, therefore, to have been a general mandate by Messrs Laing to M'Laren to convey all goods addressed to them from the station to their yard. Accordingly I think that Messrs M'Laren, in asking for these goods, were in the employment of Messrs Laing, and that for the purposes of this action it must be taken that their carts were the carts of the purchasers Laing & Sons. It may be that Messrs Laing would have a right to charge the pursuers for the cartage, in respect that the goods were to be delivered at their yard, but they would equally have had a right to do so if the cartage had been done by their own carts.

Now in order that a right to stop in transitu should be effectual, it is necessary that the goods should be in the hands of a third party, other than the buyer and seller, for the purpose of conveying the goods from one to the other. If the goods are in the hands of the carrier for any other purpose than that of carriage, either to warehouse them on behalf of the purchaser or as his agent for any other purpose, then the transit from the seller is at an end. So also, if the purchaser gives orders that the goods should be sent to a particular place, there to be kept till he gives fresh orders as to their destination to a new carrier, the original transit is at an end when they reach that place, and any further transit is a fresh and independent transit. Bethell & Company v. Clark & Company, 20 Q.B.D. 615, Lord Esher's judgment. Now in the present case the two boats arrived at Millfield Station on Saturday, and the foreman of the defenders' goods-yard — Warburton—gave notice to Bulmer, who was the foreman of Messrs M'Laren, that two boats had arrived at the station addressed to Messrs Laing, and that he would have them at the crane on Monday morning, when they could be carted away. On Monday morning a carter named Barnet, under direction of Bulmer, came with a pole-waggon and took delivery of one boat, between half-past eight and nine o'clock, and carted it to Messrs Laing's yard. Subsequent to the first boat leaving, the defenders received information that Messrs Laing & Sons had stopped payment. The officials at the station communicated with the head office as to what they were to do with goods consigned to Messrs Laing as to delivery. It seems that the Railway Company had a contract with Messrs Laing, which is known as a ‘ledger account.’ Under it the Railway Company agreed not to demand carriage for each consignment of goods before delivery, and on the other hand Messrs Laing granted the Railway Company a general lien over all goods in the Railway Company's hands consigned to them for any general balance that might be due to the Railway Company for freight. Accordingly when the notice of stoppage of payment by Laing & Sons reached the principal office of the Railway Company they gave orders that no goods were to be delivered to Messrs Laing. Accordingly when Barnet returned with the waggon for delivery of the second boat, about half-past nine, he was informed that the boat would not be delivered to him.

Now it seems to me that although the appointed destination in the contract of sale was the shed, nevertheless the purchaser was entitled to anticipate delivery at that shed, and that if he did so the transit was at an end. Accordingly when the carrier, who was in the employment of Messrs Laing, received delivery of the first boat in his cart, the transit was ended, and the pursuers could not have stopped the goods in transitu in his hands. If that is so, the same effect should be given to the fact that he returned and asked for delivery of the second boat, and that the defenders relying upon the contract for the general lien refused to give him delivery. Messrs Laing seem to have acquiesced in the position taken up by the Railway Company, and we have no evidence that they protested that the Railway Company had no right to retain the boat. Accordingly I think that when the carrier, on behalf of Laing & Sons, went to the Railway Company's yard and asked for delivery of the boat and was refused, on the ground of the contract for the general lien, there was constructive delivery so far as the contract of carriage was concerned. If that is so, then the transit was ended, and it is admitted that the notice of stoppage took place after this had been done.

This case is to be distinguished from the

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cases where a carrier retains the goods under his lien in the particular contract for the carriage of these goods. There the contract of carriage is not ended until it is fulfilled, and that is only done when the cost of the carriage of these particular goods is paid and they are delivered. The carrier there holds under the specific contract of carriage. In this case the railway did not demand payment of the freight for the boats, and they do not suggest that they were holding the second boat for the cost of the carriage of the two. Indeed, the freight for these boats was to be paid by the pursuers and not by Messrs Laing. What they did say was that they held the boats under a different contract, namely, the one of general lien, and that was one quite independent of this contract of carriage. Accordingly I am of opinion that the transit of these goods ended when the Railway Company refused delivery of the second boat, on the ground that they had a right to retain these boats, not as carriers but under a written contract with Messrs Laing to hold all goods consigned to them under a general lien. If that is so, the pursuers' notice of stoppage came too late, and the defenders were not guilty of any wrongful act in subsequently delivering the boat to Messrs Laing & Sons, liquidator. I think, therefore, the defenders must be assoilzied.”

The defenders appealed, and argued — The contract between the parties was for delivery of the boats at Laing's shed at Deptford Yard, Sunderland. It made no difference whatever that the pursuer consigned the goods with the Railway Company at a rate which only covered the cost from station to station. The transit was not over at Millfield Station, but lasted to the place agreed on between buyer and seller—Sale of Goods Act 1893 (56 and 57 Vict. cap. 71), sec. 45 (1); Kendall v. Marshall, Stevens, & Company, 1883, L.R., 11 QBD 356; ex parte Cooper, 1879, L.R., 11 Ch D 68. The place of delivery was beyond doubt Laing's shed. It could not, on the face of the evidence, be said that Laings had anticipated delivery at Millfield. This was a question of fact, and the Sheriff-Principal had erred in treating M'Laren & Company as agents of Laing. They were independent contractors. Section 45 (2) of the Sale of Goods Act ( sup. cit.) did not therefore apply, as M'Laren had no authority to take delivery at Millfield, and were not Laing's agents “in that behalf.” A contract with a carrier to carry goods did not make the carrier the agent or servant of the person with whom he contracted— ex parte Rosevear China Clay Company, 1879, 11 ChD 560, Brett (L.J.), at p. 570; Lyons v. Hoffnung and Others, 1890, 15 A.C. 391; M'Leod & Company v. Harrison, December 7, 1880, 8 R. 227, 18 S.L.R. 129; ex parte Watson, 1877, L.R. 5 ChD 35. It was thus well settled that constructive delivery to a carrier hired by the purchaser was not enough to defeat stoppage in transitu. There must be an actual agreement between the purchaser and carrier that the carrier from the date of the agreement was to hold the goods for behoof of the purchaser — Whitehead v. Anderson, 1842, 9 M. & W. 518, Parke (B.) at p. 535; Coventry v. Gladstone, 1868, L.R., 6 Eq. 44. Further, section 45 (3) had no application in the present case. The carrier here had not become custodier for the buyer, for the carrier could not change his character until the appointed place of destination, and the change of character had to be brought about by agreement. There was no such agreement. The sub-section was founded upon such cases as Kendall v. Marshall, Stevens, & Company ( sup. cit.); Black v. Cassells, May 30, 1828, 6 S. 894; see also Dunlop v. Scott & Company, February 22, 1814, F.C. Moreover, the defenders' contention under section 45 (7) of the Sale of Goods Act that part delivery had been made in such a way as to indicate agreement to give up the whole was unsound. The Sheriff-Substitute had very accurately stated the law on this point, and the cases upon which he proceeded— vide Sheriff-Substitute's note ( supra). The Sheriff-Principal was ill-founded in his view that the defenders' refusal to deliver the boat on the ground that they were entitled to hold it as security for their general lien operated constructive delivery to Laings as far as the contract of carriage was concerned.

Argued for the defenders—The Sheriff-Principal was right in the result at which he arrived. Section 45 (3) of the Sale of Goods Act 1893 ( sup. cit.) applied to the present case. The defenders were holding the goods as custodiers, and the transit was at an end. Pursuers had only paid rates for the transmission of the boats from Glasgow to Millfield, and there was no obligation upon the defenders to do anything but give delivery at Millfield. Section 45 (7) also applied. There had been part delivery here under such circumstances as to show an agreement to give up possession. Delivery of one boat was intended both by sellers and buyers to be delivery of both boats. But for the mere accident that another waggon was not forthcoming both boats would have been delivered together— Kemp v. Falk, 1882, L.R. 7, A.C. 573—Lord Blackburn at p. 586. Taking it upon the footing that there was stoppage in transitu, the defenders exercised their right of lien before any stoppage was effected. Right of stoppage in transitu was of the nature of a lien—Bell's Comm. (7th ed.), vol. i, 250. Therefore when the defenders gave notice of their lien to the buyers the seller was barred from coming in and exercising his lien—he was too late.

At advising—