Bill of lading – indorsement and delivery effective to pass title
The facts
Corn was shipped from Rotterdam to Liverpool under bills of lading issued in a set of four.
The bills were issued by the master to the shippers, merchants in Zealand.
One bill was retained by the master and three issued to the shippers who, in turn, indorsed two in blank to purchasers of the corn in Rotterdam.
Rotterdam purchasers accepted a bill of exchange drawn on them by the shippers.
Rotterdam purchasers sold the corn and delivered one of the bills of lading to purchaser A in Liverpool.
Rotterdam purchasers became insolvent before the due date on the bill of exchange drawn on them.
To recover the price of the corn, shippers delivered the fourth bill of lading to purchaser B in Liverpool who obtained possession of the goods from the vessel on presentation of the bill of lading.
Purchaser A claimed redress from purchaser B.
Findings
The short point decided by the court (Ashhurst, Buller and Groser JJ) was that the prior regular indorsement and delivery of the bill of lading to purchaser A was effective to pass title and they were entitled to judgment against purchaser B.
The Exchequer Chamber per Lord Loughborough, held that a bill of lading was merely written evidence of a contract of carriage.
As part of his reasoning, he held that the indorsement of a bill of lading was simply a direction for the delivery of the goods and did not pass title to the indorsee.
Commentary
Buller J referred to as Lord Mansfield as the “father of mercantile law in England”.
Merchants both testified and sat on the jury.
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