E. Clemens Horst Company v Biddell Brothers
| Jurisdiction | England & Wales |
| Judgment Date | 21 March 1911 |
| Date | 21 March 1911 |
| Court | Court of Appeal |
Court of Appeal
Vaughan Williams, Farwell, and Kennedy, L.JJ.
Biddell Brothers v. E. Clemens Horst and Co.
Ireland and others v. LivingstonDID=ASPM 1 Asp. Mar. Law Cas. 389 (1872) 27 L. T. Rep. 79 L. Rep. 5 H. L. 395
Gibson v. Small 1852, 4 H. L. Cas. 353
Hutton v. WarrenENR 1836, 1 M. & W. 475
Sanders v. MacleanELR 1883, 49 L. T. Rep. 462 11 Q. B. Div. 327
Edie v. East India Company 1761, 1 W. Bl, 295
Brandao v. Barnett 1846, 12 Cl. & F. 787
Polenghi v. Dried Milk companyUNK 10 Com. Cas. 42
The MoorcockDID=ASPM 6 Asp. Mar. Law Cas. 357 (1889) 60 L. T. Rep. 655 14 Prob. Div. 64
Hamlyn and Co. v. Wood and CoELR 65 L. T. Rep. 287 (1891) 2 Q. B. 488
Gibson v. Small 4 H. L. Cas. 353
Startup v. MacdonaldENR 1843, 6 Man. & G. 593
Parker v. Schuller and another 17 Times L. Rep. 299
Crozier, Stephens, and Co. v. AuerbachELR 99 L. T. Rep. 225 (1908) 2 K. B. 161
Mirabita v. Imperial Ottoman Bank 38 L. T. Rep. 597 1878, 3 Ex. Div. 164
Tregelles v. SewellENR 1862 7 H. & N. 579
Dunkirk Hall Colliery Company v. Lever 39 L. T. Rep. 239 9 Ch. Div., at p. 25
Sales of Goods Act 1893 (56 & 57 Vict. c. 71), ss. 28, 32, 34.
Sale of goods — C.i.f. contract — Payment
REPORTS OF Cases Argued before and determined by the Superior Courts RELATING TO MARITIME LAW. CT. OF APP.] BIDDELL BROTHERS V. E. CLEMENS HORST AND CO. [CT. OF APP. Supreme Court of Judicature.. COURT OF APPEAL. Jan. 30,31, Feb. 1, and! March 21,1911. (Before Vaughan Williams. Farwell, and Kennedy, L JJ) Biddell Brothers v. E. Glemens Horst and Co. (a) APPEAL FROM THE KING'S BENCH DIVISION. Sale of goods - C.if. contract - Payment - Tender of shipping documentsSale of Goods Act 1893 (56 & 57 Vict. e. 71), - . 28, 33,34. Where a parcel of hosps was told under a e.if. contract and for "net cash" and the contract did not provide for " payment against shipping documents" : Held, reversing a decision of Hamilton, J. [reported 103 L. T. Rep. 661; 16 Com. Cos. 14) by Vaughan Williams and Farwell, L.JJ., Kennedy, L.J. dissenting, that the buyers were not bound to pay for the hops on tender of the shipping documents, hut were entitled to refuse payment until they had been given an opportunity to inspect the parcel. Observations on the effect of the law merchant upon the construction of commercial documents. Appeal by the plaintiffs from a decision of Hamilton, J. in an action tried by him without a jury. The plaintiffs' claim was for damages in respect of breaches of two agreements. On the 13th Oct. 1904 the defendants entered into an agreement with Messrs. G. Vaur. and Sons Limited (hereinafter called the buyers) whereby the defendants agreed to sell to the buyers 100 bales equal to or better than choice brewing Pacific Coast hops of each of the crops of the years 1905 to 1912 inclusive. The hops were to be shipped to Sunderland, and the buyers agreed to pay for the said hops at the rate of 90s. sterling per 112lb. c.i.f, to London, Liverpool, or Hull- Terms, net cash. It was agreed that the contract was to be sevarable as to each bale, and the agreement contained a clause That the tellers may consider entire unfulfilled portions of this contract violated by the buyers, in case of refusal by them to pay for any hops delivered and accepted hereunder, or if that contract or any part of it is otherwise violated by the buyers. Time of shipment to place of delivery or delivery at place of delivery during the months inclusive of October to March following the harvest of each years crop. On the 21st Deo. 1904 the defendants entered into a further agreement with the buyers whereby they sold them fifty bales of British Columbia bops equal to or better than choice brewing Pacific Coast hops of each of the crops of the years 1906 to 1912 inclusive, the material terms of which were identical with those of the former contract On the 11th Aug. 1908 Messrs. Vaox and Sons Limited assigned all their rights and benefits under these contracts to the plaintiffs. On the 29th Jan. 1910 the defendanta, by letter of that date, offered to ship to the plaintiffs 150 bales of hops of the 1909 crop according to the agreement, and they alleged that the plaintiffs on the 1st Feb. 1910 required them as a condition precedent to the shipment of the said hops to submit samples of the hops to be so shipped, and said they would only pay for the hops against the examination of each Dale. The plaintiffs alleged that they required the defendants to ship and deliver the hops in accordance with the terms of the two agreements, but that the defendants refused to ship or deliver the hops to the plaintiffs, and they claimed 1871.10s. damages. By their defence the defendants alleged that, as the contract was a c.i.f. contract, payment was to be net cash against documents, and they alleged that by reason of the plaintiffs' violation of the entire unfulfilled portion of each of the agree-mentu, the defendants refused, by letter of the 5tb Feb. 1910, to perform the agreements further. The defendants counter-claimed 5251. damages for the plaintiffs' refusal to take and pay for the 150 bales of the 1909 crop in accordance with the agreement. The Sale of Goods Act 1893 (56 & 57 Viet. o.71) provides: S ot 28. Unless otherwise agreed, delivery of the goods and payment of the price are concurrent con-ditions - that is to say. the seller most be ready and willing to give possession of the goods to the buyer in exchange for the prior, and the buyer must. be ready and willing to p - y the price in exchange for possession of the goods. Sect. 32(1): Where, in pur-uance of a contract of sale, the seller is authorised or required to send the goods to the buyer 2 MARITIME LAW CASES. CT. OF APP.] BIDDELL BROTHERS V. E. CLEMENS HORST AND CO. [CT. OF APP. delivery of the goods to a carrier, whether named by the buyer or not, for (he purpose of transmission to the buyer is primd. facie deemed to be a delivery of the goods to the buyer. Sect. 34: (1) Where goods are delivered to the buyer, which he has not previously examined, he is not deemed to have accepted them unless and until he has bad a reasonable opportunity of examining them for the purpose of ascer taining whether they are in conformity with the contract. (2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he is bound, on request, to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract. Hamilton, J. held that where goods were sold under the terms of a c.i.f. contract and for " net cash " the buyer was bound to pay for the goods on tender of the usual shipping documents, even when the goods had not arrived at their first destination, and he gave judgment for the defendants. The plaintiffs appealed. The arguments submitted in the court below were substantially repeated, and the cases there cited were again referred to. Shearman, K.C. and Eustace Hills (Leslie Scott, K.C. with them) for the plaintiffs. Atkin, K.C. and George Wallace for the defen-dants. Cur. adv.vult. March 2l - The following judgments were read: - Vaughan Williams, L J. - I am going, in the first instance, to deal with this case quite apart from any difficulties which arise on the construction of the peculiar conditions of this particular contract, and as if the words were simply, "the parties of the second part shall pay for the said hops at the rate of 90s. sterling per 112lb., c.i.f., to be shipped to Sunderland. Terms net cash." It was argued before Hamilton, J., on behalf of the defendants, that the terms net cash in a c.i.f. contract necessarily mean "cash against documents,"and that a c.i.f. contract is performed by the vendor shipping goods of the description specified in the contract, effecting a proper insurance thereon, and then tendering to the buyer the documents representing the goods - i.e., the indorsed bill of lading, invoice, and policy - and that thereupon the buyer has to pay for the goods whether they have arrived or not Hamilton. J. affirmed the proposition just set forth as to per. formance of a c.i.f. contract by the seller, but in no way based his conclusion on the assumption that " Terms net cash " means " cash against documents," and expressed his opinion that the words "Terms net cash " in themselves mean only, in the absence of proof of trade custom or trade meaning.,no credit and no deduction by way of discount or rebate or otherwise, which the law would have implied. The judgment of the learned judge is based primarily not on Ireland and others v. Livingston (1 Asp. Mar. Law Cas. 389 (1872); 27 L. T. Rep. 79; L. Rep. 5 H. L. 395, 400), or the opinion of Blackburn, J. therein stated, nor indeed upon any other authorities upon the meaning of the terms "cost, freight, and insurance," but is based upon the proposition that the terms c.i.f, " are now settled and I hope I may add well understood." Hamilton, J. goes on to say: " It is not and cannot be contended but that the seller under a c.i.f. contract has first of all to arrange to put on board a ship at the port of shipment goods of the description contained in the contract; secondly, to arrange for a contract of affreightment under which they will be delivered at the destination contemplated in the contract; thirdly, to range for an insurance upon the usual terms current in the trade available for the benefit of the buyer, and he has then got to make oat an invoice in the manner described by Blackburn, J. in Ireland v. Livingston, or in some other manner which will express the same thing; and, finally, he has to tender to the buyer those documents so that the buyer may know what freight he has to pay in order to obtain delivery of the goods, it they are intact, or so that he may recover for the loss of them, if they have gone to the bottom." The plaintiffs contended that in the absence of words providing for payment against shipping documents unless they...
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