SHIPMENT OF GRAIN.

Otago Witness, Issue 2935, 15 June 1910, Page 9

SHIPMENT OF GRAIN.

AN INTERESTING CASE. THE POSITION OF CONSIGNORS. A case of considerable interest to shipS.M., in the Magistrate’s Court on the 9th. S.M.’, in the Magistrate’s Court yesterday. The point was whether a shipper, having purchased goods from another merchant, accepted a bill of lading, and paid the freight, could be held responsible for the value of the goods by the merchant if it wore shown that the goods wore put aboard the ship under circumstances that were not in accordance with the conditions of sale. The question was asked : Was the shipper entitled to disclaim liability in respect of the goods in question, or should he.haying accepted the bill of lading, proceed against the merchant claiming a breach of warranty ? The case was one in which J arnes Fotheringham, grain merchant, Dunodin, claimed from Corry and Co., merchants, Blenheim, a sum of £6B 11s 9d (less £lO 15s paid into court for storage, etc.), value of 100 sacks of barley, portion of a cargo shipped at the Bluff by the Cornwall for Avonmouth and Liverpool last September. —Mr P. S. K. Macassey appeared for plaintiff, and Mr Paul Lemon for defendant. Mr Macassey stated (hat in July. 1909, defendant was in Dunedin, saw Mr Fotheringhara in reference to the purchase of barley, and arranged to purchase a quantity. some of which was in Ward’s store at Invercargill. The contract was completed by telegram on August 9. Corry, when in Dunedin, impressed upon Fotheringham the necessity of giving him a full complement, because he had arranged for space on the boat. After the contract was made Mogridge (Corry’s clerk) saw the samples at Invercargill and said he was satisfied with them. Later, Nichol Bros., grain merchants (Bluff) sampled the barley on behalf of Corry. and received instructions to ship : t. They rejected 110 sacks, which was considered very severe at the time, but was accepted later. On September 23 Fotheringham, in order to meet Corry’s expressed wish that he should have a full complement, rang up Ward and Co. and asked them to enter 100 ■ extra sacks of barley to Corry’s lot. This was to replace the 110 rejected, and the 100 sacks were a superior lot of barley to that accepted for Corry by Nichol. It was true that Nichol Bros, had no opportunity of sampling the 100 sacks added, hut they rang up Ward and Co.’s, and Mr Mackintosh (the company’s salesman) assured them that fhc 100 sacks were superior. Nichol accepted the bill of lading (which included these 100 sacks), and paid froisrht. He notified Corry of this, and it was important to note that Corry must have received the letter (at the latest) on September 28, or two days before the Cornwall sailed from Wellington (with the barley); and he could have taken action had he wished. Counsel contended that in the first place Corry and Co were bound by the action of Nichol Bros., their agents. It was their duty, wbgn they knew that 100 sacks had been added, to say: “ We have had no opportunity of examining these sacks, and must have separate bills of lading for them.” But they relied upon Mackintosh’s statement, and accepted the 100 sacks in the same bill, of lading as the others. However, even if Corrv were not bound by Nichol Bros.’ action, ho was hound by his own. Ho knew before the boat sailed from Wellington that the 100 sacks were on board, and it was his duty then to telegraph to Fotheringham that he would have nothing to do with them. But he did nothing until the ship had left. Then, on the 30th September he wrote that he could not accept responsibility for these 100 sacks, and that Fotheringham must wait payment till they saw how the sale turned out at Home. Counsel read a long series of letters between the disputants, in which plaintiff urged that defendant was bound by his agents’ action He also p'ointed out that defendant had, at anyrate, had plenty of time to receive news of these 100 sacks. Mr Macassey pointed out that plaintiff sent Home to Glasgow by the Cornwall (Glasgow being her last port of call) a further quantity of barley. He received account sales in December, and the money was paid to his credit in February. This was the same boat and same trip as in the case under notice, yet the plaintiff had not yet even heard of the account sales of the barley sold to defendants. As a proposition of law, the delivery of the bill of lading and the payment of freight vested the property in the nurchaser. James H. Fotheringham, son of plaintiff, also gave evidence. He said that after N’chol B’*os.’ imnection 119 sacks were rejected out of 219—one of thi-ee lots. Bq- '■ --c Mr Mogrldge’-s inspection he forwarded delivery orders in favour of defendants to Ward and Co.. in whose store the barley was. The day before the boat sailed he got notice that Nichol Bros, wore, j.viiv He Instructed Ward and Co. to give Nichol Bros. 100 sacks of bai'lcy out of his (plaintiff’s) own lot in order to make up the lot that had been rejected, and so save defendants form short shipping, which they (defendants) were very anxious not to do. These 100 sacks of barley were superior (in value to the extent of 7d oer bushel) to the barley Nichol Bros, had accepted. He had nothing to do with the shipment after delivering to defendants. If his firm had received immediate advice of the objection raised by Nichol Bros, to the 100 sacks he would have got the shipping company co instruct its Wellington agents to make out two bills of lading—the 100 bags to his ■rt ~r>d t;V>o balance on account of Corrv and Co.. —and ‘ would have wired Corry accordingly. It was a common practice in Home shijpping thus to alter bills of lading. Defendants had no right to receive the bills of lading until they had paid, but they were handed to Nichol Bros, as defendants’ agents. The balance of the particular lot of barley from which the 100 sacks had been taken was sold to Corry and Co. later on at an advance of ?Jd per bushel, passed by the grader and shipped some time after the Cornwall had sailed. TKis had been paid for. Nichol Bros, were the recognised gradars *t the Bluff, where thfere was no

Government grader, and in conversation with witness Niohol said he had had no doubt that defendants would have accepted the 100 bags cn Messrs Ward and Co.’s assurance teat the grain was all right. To Mr Lemon; He was quite certain that defendants had asked that they should get the full quantity contracted for, and had explicitly stated that plaintiff could replace any rejects with grain that was up to sample. Either the Invercargill Govern- : mant grader or Messrs Nichol Eros, were I expected to grade all produce shipped. He i -would certainly have split the shipment ; and himself taken control of the 100 sacks i had Gerry wired him before the ship sailed, I that he was not satisfied with this line; : but be received no word until defendants’ 1 letter came to hand after the bills of lading were actually in the mail. It was too late then to do anything. Me was almost certain that he told Ward and Co. by telephone to get Nichol Bros, to sample the 100 line; but if he didn't Ward and Co. knew this line was of the sa,mo brand, by the same ship and for the same port, and therefore should have known how to act. Ward and Co., however, did not have the barley tested, and had altered the bill of lading so as to provide for the line of 100 bags. But Nichol Bros., as Messrs Corry’s agents, accepted this amended bill of lading H. L. Tapley, grain merchant and shipping agent, gave particulars of the general rules that governed the shipment of produce to Britain. Fourteen days were allowed as between merchant and merchant, for delivery, sampling, and payment. It was a common practice to alter the bills of lading before those documents were in tbs hands of the bank, or before they were posted; after that they could not be altered. It was customary to get word from a consignee in Britain as to the sale of produce within two months, or three months at the outside. To Mr Lemon: If a portion of the shipment were rejected it might account for a delay, but it was not likely to account for the extraordinary delay that had occurred in this case. James Dickson, shipping clerk for Messrs Turnbull and Martin, stated that the Cornwall left the Dominion on September 5'J, and was allowed 51 days’ passage. Robert S. Forsyth, salesman for the National Mortgage and Agency Co., gave evidence as to the practices obtaining m respect to the sale of grain. If he were acting as agents for shippers, with instructions to grade all grain for which he received a bill of lading, he would not accept a bill of lading for grain that was not sampled. Barley deteriorated with keeping; it had to be sold at once. James Tipping, Government grader in Dunedin, said that in November last he graded a quantity of barley sold by plaintiff to defendant, this being shipped from Port Chalmers in the Kia Ora. This was understood to be part o£_ the barley from which the 100 bags in dispute were taken. It was goed grain—up to the sample offered by plaintiff. To Mr Lemon: It was a most unusual thing- for anyone to get the bill of lading after it had been drawn up and the produce certified to by the grader, and make an addition to the document (in respect of produce which the grader had not seen) and hand it back after the ship had sailed. Under the circumstances, he would either have asked for a separate bill of lading or have wired to his principals for instructions. Mr Lemon put in the evidence, taken on commission, of J. J. Corry, Frank Mogridge, E. A. Niohol, and Henry Niohol, ard Mr Maoassey that of James Mackintish —all taken on commission. John Joseph Corry, in his evidence, said that full particulars of the arrival and method of disposal of the barley sent by the Cornwall should have come to hand months ago. He took up the position that he had never bought these 100 sacks,and was not responsible for them He was not so particular as to the full quantity being shipped as that it should be all up to sample. He did not think it had been possible to get a fresh bill of lading in plaintiff’s name for the 100 sacks, because the ship had sailed. He received cable advice from London that the shipment was of inferior quality and had been rejected, but ,his request for further particulars as to the disposal of the line had thus far been resultless. E. A. Nichol stated that the bill of lading came back to him with 100 bags added. He had not seen or graded this barley, but could not say whether the ship had sailed when he received the bills. On September 23 he posted them to defendants, with a letter of explanation. Ward and Company told him they had had instructions to put the extra 100 on board, and he had no authority to interfere. Mr Mackintosh (of Ward and Company) had told him that the 100 bags were superior barley to the other accepted lines, but he would not issue a certificate on that evidence. He did not telegraph for instructions when he found that the 100 sacks were on boardJa mes Mackintosh, salesmanffor Ward and Company, said the ICO sacks were put on board by plaintiff’s instructions. They were a good line and had cost more than any ether line of plaintiff’s barley in their store. The bill of lading was received on September 22, and altered accordingly. Mr Nichol raised no objection to the amended bill, otherwise he would have accepted a special, bill of lading for the 100 sacks. He did not communicate with Nichol Bros- before loading the 100 sacks, and the latter would get the bill of lading the day after the ship sailed. Counsel addressed the court at some length on points of law. Mr Lemon’s argument was that there had not been a contract of sale with regard to the 100 sacks of unsampled barley, and that defendants had from the first declined to acknowledge liability in respect thereto, as was shown by the correspondence. Defendant’s com tract was simply and solely for barley that had been passed by the grader and carried the grader’s certificate. Mr Macassey’s argument was that Nichol Bros., as defendant’s agents, accepted the bill of lading and paid freight, knowing

the circumstances, and thus formally togk possession of the goods. His Worship reserved his decision.