OTHMAN v. JINADASA

032-NLR-NLR-V-29-OTHMAN-v.-JINADASA.pdf


( 149 )
Present: Schneider J. and Maartensz A.J.
1927.
OTHMAN v. JINADASA.185.—D. C. Colombo, 190.
Sale of goods—Delivery conditional on payment—Mate'a Receipt sent byvalue-payable post—Risk of loss in transhipment.
Where a seller shipped goods to a buyer and sent the male'sreceipt by value-payable post, thereby intending to make thedelivery of goods conditional on payment,—
Held, that the property in the goods did not pass to the buyer ondelivery to the carrier, and that the risk of loss in transport fellon the seller.
PPEAL from a judgment of the District Judge of Colombo.
The plaintiff sued the defendant for the recovery of a sum ofRb. 583.21, the value of goods sent by the plaintiff from Colomboin the ss. ** Lady McCallum ” to the defendant at Trincomalee.The steamer was wrecked and the goods lost. It was proved thatthe course of business adopted was that the plaintiff should send adocument called the mate's receipt by value-payable post to thedefendant, so that the latter was unable to obtain delivery of thegoods until he had paid their full value. The defendant resistedthe claim on the ground that the plaintiff had consigned the goodsat his own risk. The learned District Judge held in favour of theplaintiff.
H. V. Perera (with L. A. Bajapakse) for defendant, appellant.—Section 18 of the Sale of Goods Ordinance prescribes the rules forascertaining the intention of the parties as to when the propertyin the goods is to pass. But here there was no " unconditionalappropriation " of the goods to the contract. The property in the.goods would not pass until the appellant paid the value of the goodsand took delivery of the mate's receipt, which had been sent byV. P. P. The risk therefore was with the person in whom the titlewas at the time the “ Lady McCallum "-went down, i.e.r with theplaintiff. The appellant is therefore not liable for the value of thegoods;
Counsel cited 25 Hals. p. 181; Bryans v. Nix1; and Schuster c.Mc.Kellar.2
N. K. Choksyt for plaintiff, respondent.—As this was a sale atprices for delivery at the plaintiff’s stores, there was an unconditionalappropriation of goods to the contract, when the plaintiff selected* (1839) 4M.&W. 776.* i1857) 7 E. d- B. 704.
A
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1987. the particular articles for shipment to the defendant. The propertyOthmanv therefore passed to the defendant at that time. Or else, the propertyJinadaaa passed at the time the plaintiff delivered the goods on board andgot the mate's receipt signed, giving the name of the defendantas the consignee.
Even if the property bad not passed, the defendant must bedeemed to have " agreed " to take the risk (section 20, Sale ofGoods Ordinance). Although ordinarily the risk passes with theproperty it is possible to sever the two, and for. the risk to be in thebuyer whilst the property remains in the seller.
Where the buyer nominates the mode of conveyance and the*seller follows the buyer's instructions, the risk is with the buyer.Here the buyer requested the seller to send the goods by steamerleaving on a particular date, which was the* scheduled date of sailingof the “ Lady McCallum," and that was the only ship plying betweenColombo and Trincomalee.
Delivery to a carrier is delivery to the buyer, more especiallywhen the carrier is one “ specially pointed out by the consignee.Dunlop v. Lambert *; Chalmers’ Sale of Goods, p. 198; Benjamin onSale {6th ed.)t p. 452 ei %eq. and p. 459; Stock v. hx*jUs 10 App.Case 263.
There would have been a " reservation of the right of disposal "if the plaintiff had taken the mate's receipt in favour of himself orhis order. But here the plaintiff took it in favour of the defendant.Once the mate’s receipt was posted the plaintiff had no control overit. That was only a mode of recovering payment.
July 25, 1927. Schneider J.—
In this action the plaintiff sued the defendant for the recoveryof a sum of Bs. 533.21 as being the value of goods sent by theplaintiff from Colombo in the ss. “ Lady McCallum " to, be deliveredto the defendant at Trincomalee. The ss. “ Lady McCallum "was wrecked, and the goods lost. The defendant resisted theclaim on the ground that the plaintiff had consigned the goods at hisown risk, and that the terms of the contract for the sale of the goodswas " cash before delivery." The evidence proves that the plaintiffand the defendant had been doing business for some time, the plaintiffdespatching goods by the line of steamers to which the ss. " LadyMcCallum " belonged. It was not usual to obtain bills of lading forthe goods so despatched, the usual document being a mate’s receiptin the form of the document P 7, which states that the SteamshipCompany, Limited, had at Colombo " received on board thebs. 4 Lady McCallum ’ from M. E. Othman to G. H. Jinadasa the1 {1839) 6 Ct. and Firm at pp. €20-621.
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'under-mentioned goods for port of Trincomalee. The goods arethen described in detail. 1 Below appears—
Freight, Bs. 15.12 paid here by shipper.
“ This shipping order is issued subject to the clauses appearingin the Ceylon Steamship Co.'s, Ltd., bill of lading, whichcan be signed for these goods if desired ….Consigness will please arrange with the agents at thedifferent ports to take delivery of cargo immediately onarrival of steamer ….
1927.
Schneider
J.
Othmon v.Jinadata
" Notice.—Packages will only be delivered at port of destinationon presentation of thiSf document properly sigued . . . . M
This mate's receipt is usually sent by value-payable post, that isto say, the consignee is unable to obtain delivery of the goods untilhe, has paid the full value of the goods and obtained delivery of themate’s receipt from the Post Office. The plaintiff's manager, whohad sent these goods, in giving evidence stated, " I am entitled toask the Steamship Company to deliver these goods to any one I likeif I take the mate's receipt back. Unless the defendant takesthe mate's receipt, the Steamship Company will not give him* delivexy '. ” , He also stated in his evidence that the defendanthad asked that goods be supplied on credit, but that he had declinedto do so, but had offered to supply for cash before delivery, and thatit was in pursuance of this offer that the mate's receipt was forwardedby value-payable post for the goods which were sent by the line ofsteamers, which is the only steamship line carrying goods fromColombo to Trincomalee. The issues framed at the trial coveredthe dispute between the parties. The simple question is, whetherthe goods were being transported at the risk of the defendant.The learned District Judge held in favour of the plaintiff and gavehim judgment.
This appeal is by the defendant. Now, the general rule is thatin the absence of au agreement to the contrary the goods remainat the seller's risk until the property therein is transferred to thebuyer. But when the property therein is transferred to the buyerthe goods are at the buyer's risk, whether delivery has been made<>r not (see section 20 of the Sale of Goods Ordinance ^). Tt becomes,therefore, necessary to ascertain whether the property in thesegoods had passed to the buyer, and if they had not, whether therewas any agreement by which he undertook the risk during transport.The contract, I think, should be regarded as one for the sale ofunascertained goods. That being so, no property in them wastransferred to the buyer unless and until they were ascertained(section 16). The packing and delivery of the goods on boardthe ship should be regarded as an appropriation of the goods to the*0/141 No. 11 o/1896t.
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1927.
'SCHXEIDEB
J.
Othman v.Jinadaea
contract with the assent ol the buyer given before the appropriationwas made. If the plaintiff in delivering these goods did not reservea right of disposal of them, he would be deemed to have uncondition-ally appropriated the goods in question to the contract (section 18,rule 5). The question, therefore, for decision resolves itself intowhether the plaintiff reserved, or did not reserve, a right of disposaluntil a certain condition was fulfilled, namely, the payment for thegoods by the defendant. In my opinion he did reserve this right ofdisposal by forwarding , the mate’s receipt by value-payable post.As the plaintiff himself states,’he was entitled to obtain deliveryof the goods to any one he named so long as he held the mate'sreceipt. Section 19 of the Ordinance makes it clear that in such acase, notwithstanding the delivery of the goods to a carrier for thepurpose of transmission to the buyer, the property in the goodsdoes not pass to the buyer until the condition imposed by the selleris fulfilled; and that where the seller of goods draws on the buyerfor the price, and transmits the bill of exchange and bill of ladingto the buyer together to secure acceptance or payment of the bill ofexchange, the buyer is bound to return the bill of lading if he doesnot honour the bill of exchange, and if he wrongfully retains the billof lading the property in the goods does not pass to him. I amunable to see how the present case can be regarded as not comingwithin the provisions of section 19 of the Ordinance. There is noelement in this case showing that the buyer undertook the riskduring transport. The case is in nowise different from that inwhich a shopkeeper sends goods to a customer by value-payablepost. Supposing the parcel is lost in the post,there canbeno
doubt that thelosswould fall upqn the shopkeeper and notonthe
buyer. The buyer has no control of the goods and has no right tothem until he has paid the amount of the value of the 'goods. Itherefore allowthisappeal with costs, set asidethe decreeofthe
District Judge,anddismiss the plaintiff's'action,with costs.
/
Maartensz A.J.—
This was an action to recover the value of certain goods whichwere lost with the ss. “ Lady McC-allum, " and the cost of freight,cart hire, and loading charges.
The facts for the purposes of the appeal are not in dispute. Theyare as follows:—The defendant, a merchant in Trincomalee, byletter P 8 dated December 24, 1925, requested the plaintiffs, whotrade in Colombo, to send him by the steamer leaving on December29 the goods in question.
The only steamer due to sail from Colombo for Trincomalee wasthe “ Lady McCallum, M and the goods were put on board on December28, 1925. The cases containing the goods were marked “ G.H.J. "defendant's initials. Freight was paid by the shipper.
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The Steamship Company issued what is called a mate's receipt(P 7) for the goods.
The receipt runs as follows: —
Ceylon Steamship Company, Limited.
Colombo, December 28, 1925.
Received on board the ss. “ Lady McCallum ” from M. E. Othmanto G. H. JTinadasa the under-mentioned goods for port of
Trincomalee: —
Marksor Address.
1 case hurricane lamps 1/3…12 0
1 case vinegar 1/1…020
G. H. -J. 1 case umbrella soap 1/1…020
case sunlight soap 1/1…020
cases shop goods 1/3, 1/4…320
1 bundle mamoties (2 doz.) (5c. ft.) …02.0
7
(Kgd.) T. Hope Evans.
Chief Mate.
Freight, Rs. 15.12 paid.
Notice.—Packages will only be delivered at port of destination onpresentation of this document properly signed.
The defendant could not obtain delivery of the goods without themate’s receipt, and in accordance with the course of business betweenthe plaintiffs and the defendant, it was sent to him by a value-payableletter on, according to P 5 E, December 31. The amount payablefor the letter by the addressee was Rs. 533.31. This sum includedthe sum of Rs. 15 paid by the shipper as freight.
The goods were lost with the “ Lady McCallum ” oil the eveningon January 1, 1926. The defendant refused to pay for and takedelivery of the letter containing the mate’s receipt, which wasreturned to the plaintiffs.
The plaintiffs next sent it to defendant by ordinary post whoreplied bn January 10 that he would take delivery of the goodswhen they reached Trincomalee. The defendant by then was awareof the loss of the steamer and the goods.
It will be convenient here to refer to the evidence of the plaintiffs’manager as to the way in which he commenced doing business withthe defendant and the manner in which that business was conducted.
In 1924 the plaintiffs’, manager visited – Trincomalee, and anarrangement was come to by which the defendant was to purchasegoods from the plaintiffs for cash before delivery. The defendant's
1927.
Maartexsz
A.J.
Othman
Jinadasa
( l'>4 )
1927. request that he should have a month’s credit was not acceded to.Ma~vbtkn*sz Accordingly the mate’s receipt for goods ordered by the defendantA.O. was sent to him by value-payable post, and he used to pay theoilman v. amount due on the letter and take, delivery of the goods in exchangeJinatltMa for the mate s receipts.
The defendant was liable for the value of the goods cx store andthe cost of cart hire, loading, and freight paid for by the shipperin the first instance were debited against and included in theamount payable by defendant on the letter sent bv value-payablepost.
No difficulty had arisen before, but the plaintiff alleges that if thedefendant had not paid for and taken delivery of any parcel of goodshe would have had them sold in Trincomlee and recovered thedifference in price, if any, from the defendant.
The broad question in the case is, whether the plaintiff ordefendant is to suffer the loss resulting from the wreck of the steamercarrying the goods.
The learned District Judge has answered this question in favourof the plaintiff upon two grounds. He holds (1) that the propertyin th$ "oods passed to defendant when they left plaintiff’s store orwere put on board and a mate’s receipt taken out in favour ofdefendant, and that the, sending of the receipt by value-payable postwas not intended to be a conditional appropriation subject to ‘ohepayment of the price, but was sent in that way as usual as themeans by which the defendant was in the habit of transmitting theprice of the goods; (2) that even if the property had not passed, thedefendant had assumed the right to instruct the plaintiffs to despatchby any form of conveyance he chose, and the plaintiffs merely actedas his agents to give effect to his wishes and carry out hisorders, and that there was therefore an implied agreement by ‘ohedefendant to undertake the risk of the transport of goods toTrincomalee.
It was contended in appeal that the possibility of a loss hadnever- occurred to either plaintiffs or defendant, and that the factsdid not disclose an implied agreement that the property shouldpass to the buyer as soon as they were put on board, notwithstandingthe fact that the mate’s receipt could not pass to the buyer until hehad paid for the goods, and that by sending the mate’s receipt byvalue-payable post the plaintiffs reserved the right of disposal, whichprevented the property in the goods passing to the buyer.
I am uhiible to agree with the learned District Judge’s opinionthat the mate’s receipt was sent to the buyer for the sole purposeof enabling him to transmit the price and costs of freight, &c., to' the seller. This view of the case is quite inconsistent with themanager's evidence, that lie refused to give the defendant credit
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for the goods to be supplied and agreed to supply goods for cashbefore delivery, and that it was, in pursuance of that arrangementthat the goods in question were sent and the mate's receipt sent byvalue-payable post.
It is, I think, clear from this evidence that the defendant was notto have delivery of the goods before they had been paid for.
The immediate question in the case is : In whom was theproperty in the goods when the steamer was wrecked ? If in theplaintiffs, had the risk nevertheless passed to the buyer ?
The law as to the time at which the property in the goods passesto the buyer is clearly laid down in the rules formulated in section 18of the Sale of Goods Ordinance, 1896. The rules applicable to thiscase are rules 5 (1) and 5 (2). Buie 5 (1) lays down that “ unless a
contrary intention appeal's, where there is a contract for the sale of1unascertained or future goods by description, and goods of thatdescription and in a deliverable state are unconditionally appro-priated to the contract, either by the seller with the assent of thebuyer, or by the buyer with the assent of the seller, the propertyin the goods thereupon passes to the buyer. Such assent may beexpress or implied, and may be given either before or after theappropriation is made." Rule 5 (2) lays down that “ where, inpursuance of the contract, the seller delivers the goods to thebuyer or to a carrier or other bailee (whether named bj- the buyeror not) for the purpose of transmission to the buyer, and does notreserve the right of disposal, he is deemed to have unconditionallyappropriated the goods to the contract."
The goods in question were, in pursuance of the contract, deliveredto a carrier for transmission to the defendant and were thereforeappropriated to the contract, and in accordance with rule 5 (1) theproperty in the goods would have passed to the buyer if the plaintiffshad not reserved a right of disposal, The plaintiffs had in myopinion, reserved that right by sending the mate's receipt to thebuyer by value-payable post. The sending of the mate’s receiptin that way made delivery conditional on payment, and the propertyin the goods did not pass to the buyer until that condition wasfulfilled (section 19 (1)).
The respondent argued tha-t the buyer Had assumed the riskalthough the property in the goods had not passed to him and thecase of Stock v. Inglis 1 was cited in support of the proposition thatthere might be an assumption of risk apart from the transfer ofproperty. That case turned on the fact that the contract was anf.o.b. contract, and I cannot see its applicability to the presentcase where the risk of the carriage by sea -was never within thecontemplation of the parties and formed no part of the arrangement
»{WM) 12Q.B. D. 564.
1927.
Maartexsz
A.J.
Othman V.Ji nodosa
( 156 )
1927.
Maartknsz
A.J.
Othman v.Jinadasa
between them for the sale and purchase of goods. The ordinaryrule (section 20) that the risk remained with the seller must thereforeapply.
X accordingly hold that neither the property in the goods northe risk passed to the buyer, and that plaintiffs’ action should bedismissed, with costs in both Courts.
Appeal allowed.