Bryce v Ehrmann
| Jurisdiction | Scotland |
| Judgment Date | 28 October 1904 |
| Date | 28 October 1904 |
| Docket Number | No. 3. |
| Court | Court of Session (Inner House - Second Division) |
Lord Justice-Clerk, Lord Young, Lord Trayner, Lord Moncreiff.
SaleRight in SecuritySale on ApprobationGoods pawned by retail dealerTitle of pawnbrokerLoss arising by fraud on two innocent partiesSale of Goods Act, 1893 (56 and 57 Vict. cap. 71), sec. 18, Rule 4 (a).
Ehrmann, a wholesale jeweller, was in the habit of sending goods to Anderson, a retail jeweller, with the wholesale prices marked, with power to sell and deliver on his own account and for his own profit any articles he might sell, Anderson being liable only for the wholesale price. At the same time Ehrmann sent a printed notice headed approbation note, stating that the goods were to remain the property of the sender till invoiced by him to Anderson. Anderson having retained a diamond necklace for several months, Ehrmann in April 1903 urged Anderson to purchase the necklace himself, and offered to take bills for the price. Anderson agreed to do so, and the necklace was invoiced to him, and the bills were granted by him.
Anderson having subsequently become bankrupt, Bryce, a pawnbroker, with whom Anderson had in December 1902, without Ehrmann's knowledge, pledged the necklace, raised an action of multiplepoinding to determine the right thereto.
Claims were lodged by Ehrmann, by Bryce, and by Anderson's trustee, but the claim by the last was not insisted in.
Held (1) that as in December 1902 Anderson had been put by Ehrmann in a position to give a good title to a purchaser, he could validly pledge the necklace, and had validly pledged it to Bryce; (2) that as Anderson's trustee did not insist in his claim Ehrmann was entitled to delivery of the necklace after satisfying Bryce's claim.
Brown v. Marr, Barclay, &c.SC, 7 R. 427, approved.
In August 1903 an action of multiplepoinding was raised in the Sheriff Court at Glasgow by T. L. Bryce, pawnbroker, Glasgow, for the purpose of determining the right to a diamond necklace which had been pledged with him on 18th December 1902 by Robert Anderson, jeweller, 13 South Exchange Street.
The circumstances in which the action was raised were stated in a joint minute of admissions by the three claimants after-mentioned. (1) The claimant, Benzion Ehrmann, is a wholesale jeweller in London, and he was in the habit of sending articles of jewellery on sale or approbation to Robert Anderson, manufacturing jeweller, Glasgow. The terms on which the goods were so sent were that Robert Anderson was to endeavour to effect a sale of the same, and in the event of his doing so he was to be entitled to purchase them from Ehrmann at a price specified by the latter in an approbation note which accompanied each parcel of goods. It was further agreed that all such goods should remain the property of Ehrmann until invoiced by him to Anderson, and that until so invoiced such goods were to be returned to Ehrmann on demand. Each approbation note bore a printed memorandum to the effect that the foregoing were the terms on which the goods were supplied. (2) The claimant, Thomas L. Bryce, is a licensed pawnbroker and money-lender, and carries on business at 67 Oswald Street, Glasgow. A common and recognised branch of business among pawnbrokers and money-lenders consists in the occasional assistance of watchmakers and jewellers in the conduct of their business by the advance of money upon the pledge or pawn of goods to the extent of adequate security. For some years past Anderson has dealt with Bryce.
It was further stated that on 13th December 1902 Ehrmann sent to Anderson the necklace in question on approbation on the terms before set forth.(5) On 18th December 1902 Anderson, without the knowledge or consent of Ehrmann, pledged the necklace with Bryce against a loan. (6) Between 16th December 1902 and 24th April 1903 a correspondence took place between Anderson or his firm of Robert Anderson & Co. and Ehrmann. During the whole of the period covered by said correspondence the necklace was pledged with Bryce as aforesaid, but Anderson concealed this fact from Ehrmann, and led him to believe by his letter that he still had it and was endeavouring to sell it to a customer.
The correspondence produced included the following letters:
Ehrmann to Anderson.
London, E.C., April 21st, 1903.
With reference to the two dd. necklaces, 64 and 110 [the one in question], and two pendants, 31 and 30=235 in all, which has been so long in abeyance, I have to make the following proposal to you:
If you will accept invoice for these goods, I am prepared to draw for the amount at 3, 4, 5, or 6 months. This will enable you to take your own chance with your customer.
As far as I am concerned, I will on no account leave the matter longer in abeyance.
If you cannot get your customer to decide forthwith, or are not willing to agree to the above terms, I must ask you to return my goods without further delay.
Anderson to Ehrmann.
Glasgow, 22nd April 1903.
Dear Sir,Send the bills, and I will accept them.
(7) On or about 23d April 1903 Ehrmann invoiced the said necklace to Anderson as his absolute property along with certain other goods which had been sent to him on approbation by Ehrmann in the same manner. Bills of exchange were accepted by Ehrmann from Anderson in payment of the price of said goods, but the said bills have since been dishonoured and are still unpaid. (8) Anderson's estates were sequestrated under the Bankruptcy Acts on or about 9th July 1903, and the defender, William Brodie Galbraith, was thereafter elected and confirmed trustee thereon.
The printed approbation note bore:On approbation from B. Ehrmann, diamond merchant, wholesale and manufacturing jeweller.
The goods specified below remain my property until invoiced by me, you in the meantime being responsible for loss or damage. All uninvoiced goods to be returned on demand.
Claims were lodged for Bryce, for Ehrmann, and for Anderson's trustee in bankruptcy.
Bryce claimed to be entitled to retain the necklace till his claim was paid.
Ehrmann made the following alternative claims:To be ranked and preferred to the subject in medio as his absolute property; or, alternatively, to be ranked and preferred to the subject in medio as his property, subject to his repaying the amount advanced on the security of the same by the pursuer, with interest thereon to date of payment, in exchange for an assignation by the pursuer in favour of
the claimant of his (pursuer's) claims against the said William Brodie Galbraith and Robert Anderson.
He pleaded, inter alia;(1) The subject in medio not having been the property of the said Robert Anderson when he pledged the same with the pursuer, the said pledge was invalid, and the pursuer acquired no rights thereby. (2) This defender, having been induced to invoice the said necklace to the said Robert Anderson through material misrepresentations on his part, is entitled to repudiate the pretended sale.
For the purposes of this report it is unnecessary to specify the claim for Anderson's trustee, as he did not ultimately insist on it.
On 19th February 1904 the Sheriff-substitute (Boyd) pronounced an interlocutor, by which he repelled the claim for Anderson's trustee, and sustained the alternative claim for Ehrmann.
On an appeal by Anderson's trustee, the Sheriff (Guthrie), on 13th June 1904, pronounced this interlocutor:Finds that on 13th December 1902 the claimant Ehrmann, a wholesale jeweller in London, sent to Robert Anderson, jeweller, Glasgow, a diamond necklace, the subject in medio, on the terms specified in an approbation note, viz.That Anderson was to endeavour to effect a sale of the same, and, in the event of his doing so, he was to be entitled to purchase it from Ehrmann at a specified price; that the necklace should remain Ehrmann's property till invoiced by him to Anderson; and that, till so invoiced, it should be returned to Ehrmann on demand: Finds that on 18th December Anderson pledged the necklace and other articles as he had done when it was previously in his possession on the same termsfor a loanto the claimant Bryce; and that without the knowledge or consent of Ehrmann: Finds that after much correspondence, in which Ehrmann asked for the return of the necklace, and Anderson, falsely alleging that he was about to effect a sale of it, delayed to comply with Ehrmann's demands, an arrangement was made whereby the necklace was invoiced (along with other goods) to Anderson on 23d April 1903, Anderson granting bills for the price: Finds that these bills were dishonoured, and that Anderson became bankrupt, the claimant, Galbraith, being the trustee on his sequestrated estate: Finds that the said transaction on 23d April was entered into by Ehrmann in ignorance occasioned by Anderson's fraudulent concealment of the fact that he had fraudulently pledged the necklace to Bryce: Finds that Ehrmann is entitled to have the said transaction set aside, and to have it found, as it is hereby found, that the property in the necklace did not pass to Anderson: Finds that Anderson, having no property in the necklace, did not validly pledge it to the claimant Bryce: Therefore recalls the interlocutor of 19th February last; repels the claims of the party Galbraith, Anderson's trustee, and of the party Bryce, and prefers the claimant Ehrmann, to the subject in medio.*
Bryce appealed to the Court of Session. At the hearing of the appeal no appearance was made for Anderson's trustee in bankruptcy.
Argued for the appellant;(1) On a fair construction of the correspondence between Ehrmann and Anderson, and the admissions in the case, the property in the necklace had passed to Anderson by
being invoiced to him, and therefore, even if there were any defect in the original title of the pawnbroker, it was cured by accretion. That invoice stood, and must have effect until it was reduced. Further, there was no ground for reduction, because, although no doubt Anderson had made false statements to the effect that he was negotiating...
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