South Australian Insurance Company v Randell and Another
| Jurisdiction | UK Non-devolved |
| Judgment Date | 14 December 1869 |
| Date | 14 December 1869 |
| Court | Privy Council |
English Reports Citation: 16 E.R. 755
ON APPEAL FROM THE SUPREME COURT OF THE PROVINCE OF SOUTH AUSTRALIA.
Mews' Dig. tit. Bailment, 1. General Principles; tit. Insurance, c. Fire, III. Interest. S.C. L.R. 3 P.C. 101; 22 L.T. 843. Distinguished, Isaac v. Andrews, 1877, 28 U.C. C.P. 40; Clarke v. M'Clellan, 1892, 23 O.R. 465. Followed, Benedict v. Kerr; 1878, 29 U.C. C.P. 410; Lawlor v. Nicol, 1898, 12 Man. Rep. 224.
SOUTH AUSTRALIAN INSURANCE CO. V. EANDELL [1869J VI MOORE N.S., 342 ON APPEAL FROM THE SUPREME COURT OF THE PROVINCE OF SOUTH AUSTRALIA. THE SOUTH AUSTRALIAN INSURANCE COMPANY,-Appellants; WILLIAM BEAVIS RANDELL and SAMUEL RANDELL,-Respondents * [Dec. 14, 1869]. A bailment on trust implies that there is reserved to the Bailor the right to claim a re-delivery of the property deposited in bailment [6 Moo. P.C. (N.S.) 351]. Wherever there is a delivery of property on a contract for an equivalent in money, or some other valuable commodity, and not for the return of the identical subject-matter in its original or an altered form, this is a transfer of property for value-it is a sale and not a bailment [6 Moo. P.C. (N.S.) 351, 352]. Where, therefore, corn was deposited by Farmers with a Miller, to be stored and used as part of the current consumable stock or capital of the Miller's trade, and was by him mixed with other corn deposited for the like purpose, subject to the right of the Farmers to claim at any time, an equal quantity of corn of the like quality, without reference to any specific bulk from which it was to be taken, or in lieu thereof the market price of any equal quantity, on the day on which he made his demand, with a small charge for general purposes: - Held, that such a transaction amounted to a sale by the Farmer to the Miller, and was not a bailment of the corn, and entitled the Miller to claim in respect thereof upon a Policy of Insurance against fire as for his own property, notwithstanding that such corn was not specifically insured, or described, as required by the conditions of the Policy, as " goods held in trust and on commission," upon which condition the claim was resisted by the Insurers. This was an action on a Fire Policy of Insurance, in which the Respondents were Plaintiffs, and the Appellants were Defendants. The Appellants were an Insurance Company, carrying on business in the Province of South Australia, and having their principal place of business at [342] Adelaide, in that Province. The Respondents were Millers, carrying on business at Blumberg, in the same Province. The facts were these: - On the 4th of July, 1866, application was made to the Appellants by the Respondents, to insure the current stock in their Mill, namely, wheat, flour, sacks, etc., to the amount of 1250, against loss or damage by fire, and on the same day an Insurance was effected in the terms of such application, and subject to the conditions endorsed on the Policy; one of which was that " Goods held in trust or on commission must be insured as such, otherwise the Policy will not extend to cover them." On the 17th of February, 1867, a fire occurred, whereby the Respondents' Mill, with the stock therein, was destroyed. A claim was made by the Respondents for the loss, but the amount being disputed by the Appellants, an action was brought by them to recover the value of the stock. The Plaintiffs declared upon the Policy, and the Defendants pleaded, that the Plaintiffs were not interested in the stock, and also that in their proposals [343] for the insurance they represented that the stock was to be insured for themselves, whereas it was held by the Plaintiffs in trust for other persons. Issue was joined on the pleas, and the action was tried before the Chief Justice and a jury. Upon the trial it was admitted by the Plaintiffs, that the stock which had been destroyed by the fire had been paid for by the Defendants, except such portion as the Defendants alleged was held by the Plaintiffs in trust for others; and the question was, whether such portion, consisting of wheat, was held by the Plaintiffs in trust, within the meaning of the above condition, and was, therefore, not covered by the Policy. * Present: Lord Chelmsford, Sir James William Colvile, Sir Robert Phillimore, Sir Joseph Napier, Bart., and the Lord Justice Giffard. 755 VI MOORE N.S., 344 SOUTH AUSTRALIAN INSURANCE CO. V. RANDELL [1869] The evidence, so far as it was material to this question, showed that according to the Plaintiff's custom and course of business wheat was received by them from Farmers to whom such course of business and dealing was known, and on receipt, shot out of Bags in the presence of the Farmers who brought it into, large hutches, where it became mixed with other wheat which had been received in a similar manner, and on part of which advances had been made to the Farmers by the Plaintiffs. The wheat thus mixed lost its identity and became the current stock of the Plaintiffs, which, according to their course of dealing, known to the Farmers, was either sold as wheat by the Plaintiffs or ground in their Mill. The Plaintiffs could do what they liked with it. If ground, the flour produced from such stock was sold and otherwise dealt with by the Plaintiffs as they thought fit, and as their own property. It never was intended by the parties that the identical wheat delivered by the Farmers should be returned to them. On delivery of the wheat to the Plaintiffs they gave to the Farmer a receipt in [344] these terms :-" Keceived, etc., to store," and it was shot to be stored or taken on storage. The Farmer could at any time demand an equal quantity of wheat of like quality with that delivered by him to the Plaintiffs, or the market price of an equal quantity, fixing the price as of the day on which he made his demand. The Plaintiffs had the option of delivering wheat of like quality or paying such market price Advances were frequently made to the Farmers by the Plaintiffs in respect of the wheat so delivered to them. No charge was made by the Plaintiffs in respect of the wheat until after the lapse of a certain time, when the charge was one farthing per bushel per month. The wheat in question had been brought by Farmers to the Plaintiffs in manner aforesaid, and in the course of business, and had been mixed with other wheat, and treated in the manner aforesaid, and a portion of it had been paid for by the Plaintiffs. No evidence was adduced on the part of the Defendants, but their Counsel applied for a nonsuit on the ground that the wheat was held in trust, and was not the property of the Plaintiffs. The Chief Justice declined to nonsuit the Plaintiffs, and by consent the verdict was entered...
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...the advantage, as we have had, of being referred tothe decision of the Privy Council in the case of the South Australian Insurance Company v. William Beavis Randell and Samuel Randell, reported in Volume III of Privy Council Appeal Cases, page 101 where, at page 108 Sir Joseph Napier, givin......