The Sun.
London, England, 1866-12-29 00:00:00

BILLS OF LADING.

(From the Solicitor's Journal.)
Thecase recently decided in the Court of Common
Pleas, and published in the last number of the Weekly
Reporter (15 W. R. 173), is one of interest and im-
portance as regards bills of lading ; and as it has we
believe given rise to some misapprehension in the
mercantile world, we think it right to draw our
readers' attention to what is really involved in the
decision. A bill of lading may be described as an
instrument signed by the master of the ship in
which the goods are loaded on behalf of the ship-
owner, and it contains an acknowledgment of the
receipt of the goods, and a contract to deliver them,
on payment of freight, at the port of destination, the
goods being made deliverable to the consignor or his
assigns. If the goods arc resold whilst at sea, it is ob-
viously almost impossible for the purchaser to take
possession of what he has bought, either actually
or constructively; and therefore it has been the
custom of merchants from very early times to attach,
as a master of convenience in business, peculiar
power to the endorsement and delivery of the bill
of lading itself, so that the transfer of it came to be
recognised by law as equivalent to an actual deli-'
very of possession of the goods to which it related.
A bill of lading, however, was not yet strictly nego-
tiable, for though the indorsement transferred the
property in the goods, it was held that it did not
pass the contract. This defect in its operation was
remodelled by 18 and 19 Viet., c. 111, which en-
acts that the consignee or Mclorsee to whom the
property passes by such consignment or indorse-
ment shall have the same rights of suit, and be sub-
ject to the same liabilities in respect of the goods,
as if the contract contained in the bill of lading had
been made with himself. Such is a brief history
of bills of lading, and a summary of their pro-
perties ; but cessante ration cessat tpsa lex,
and when the physical difficulty of transferring
possession of the goods is at at an end, the
peculiar powers of the bill of lading are at
an end also, and it becomes no more than a
delivery order, or a piece of waste paper. The ques-
tion raised in Meyerstein v. Barber was, at what
precise point this change takes place. The transac-
tions between the parties had been of a complicated
nature, but as far as our present purpose is con-
cerned the facts may be stated very simply. The
shipper who had consigned goods from Madras to
London drew against them on the consignee, and
then discounted the bills with a banking company,
annexing as security the bill of lading, which he had
drawn in three parts, one being accomplished the
rest to be void, the goods being made deliverable to
himself or assigns, and each paint being indorsed in
blank. After the arrival of the goods in London
they were warehoused by order of the consignee at
a sufferance wharf, and as he failed to pay freight
the master put a stop on them under the Merchant
Shipping Act of 1862. While the goods still re-
mained in this position the consignee paid off the
bills of exchange in the hands of the banking com-
pany, and obtained from them the bill of lading,
two parts of:whiehh e
efutlol vthaleupeloafintthiffe gasoodses:
gave
se-
curity for an advance to
A few days afterwards he got an advance to nearly
the same amount on the same goods from the de-
fendant, and gave him as security the third part of
the bill of lading. The defendant then, hearing
that the stop for freight had been taken off, took
his part of the bill of lading to the wharf, had the
goods transferred into his name, and got delivery
orders. The question was which of the two, the
plaintiff or the defendant, was to suffer by the con-
signee's fraud. For the defendant it was said that,
the goods having been landed, the bill of lading lost
its power before the plaintiff made his advance, and
that its transfer could no longer carry the possession
of the goods, but only a right to delivery ; that
quoad hoc neither the plaintiff nor the defendant
had a valid pledge to which possession by the
pledgee was essential ; but that the defendant, by
having the goods transferred into his name, and by
getting delivery orders, had obtained actual posses-
sion of the goods themselves, and so had perfected
his invalid pledge, and completed his title. The
Court, however, held that there had been a valid
pledge to the plaintiff, because, at the time when
the two parts of the bill of lading were transferred
to him, complete delivery had not been made to any
person claiming under it, and it was therefore an
operative instrument, with the specific qualities of
a bill of lading, as much as if the goods had been
at sea, so that its transfer passed the possession of
the goods. The fact of the bill of lading being in
three parts had nothing to do with the decision,
though it is obvious that, if the plaintiff had ob-
tained all three of them, the question never would
have arisen ; it seems, however, that he imagined
the third part was retained by the master to cover
freight. In the particular case the reason why the
goods had not been delivered under the bill of
lading was because a stop had been put on for
freight ; but the Chief Justice intimated that the
law applicable to the case would have been the same
if there had been no such stop. The result of the
case therefore is this—a bill of lading does not be-
come extinct on the landing of the goods,but remains
in full force till they are completely delivered to
some one claiming under it ; and so long as this has
not been done, from whatever cause, the transfer
of the symbol of the goods will carry the possession
of them. As bills of lading are so frequently used
to obtain advances ut,on, it is strange that
•
point should never have arisen for judicial
before; the operation of these instruments has uo
doubt been extended beyond the dicial
limitsdecision usually
the
as-
signed to it by merchants ; and for the future it
will be possible for goods to remain for a long time
after they have been landed in the same position as
if they were still afloat. We do not propose here
to discuss the merits of the decision, but we may
add that we do not expect, nor should we wish, to
ece a reversal of the last judgment delivered in the
Court of Common Pleas by its late illustrious chief,
fortified as it was by the elaborate opinion of so
sound a commercial lawyer as Mr. Justice Willes.