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Bill of lading – title to sue – indorsee / pledgee contracting with owners on same terms as bill of lading

The facts

Zinc ash was shipped in bags from Beunos Aires to Liverpool.

The shippers in South America  drew a bill of exchange (sight draft) on their London agents for 90% of the invoice price. The shippers thereupon discounted the sight draft and the endorsed bill of lading to their bankers who in turn presented the sight draft and the bill of lading to the London agents who took the bill as security and not with the intention of becoming owners of the cargo.

Upon examining the bills of lading which were clean, the London agents paid the draft.

The intention was that the London agents would on-sell the shipment for the full invoice price and earn, in effect a commission, of 10%.

The cargo suffered water damage during loading. Most of the bags were offloaded and shipped in a second vessel after an inexcusable delay on the part of the shipowners.

The London agents took delivery of the shipments and assumed the obligations contained in the bills to pay the freight. In addition they paid a sum under protest to the shipowners for reconditioning the zinc ash.

The London agents, as first plaintiffs, and the South American shippers as second plaintiffs, instituted action against owners for loss of profits caused by the drop in the price of zinc ash over the period of delay and return of the monies paid for the reconditioning of the zinc ash.


Greer J held that the London agents were entitled to succeed on the basis that by paying freight and taking delivery of the goods they had stepped into the shoes of the shippers.

The Court of Appeal (Bankes, Scrutton and Atkin LJJ) confirmed his decision.

Scrutton LJ held that the Bills of Lading Act 1855 did not apply because the London agents had “some” property but not all the property in the goods as required by the Act.

Scrutton LJ (Atkin LJ concurring) held further that the unreasonable delay on the part of the shipowners was tantamount to a deviation which disqualified them from relying on the exemption clause in the bills of lading.


Lord Diplock in the Albazero regarded this case as developing the law by regarding the agents as having entered into a contract with the shipowners in their own right.

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