John Spence, Merchant in Greenock, Trustee on the Sequestrated Estate of William Mathie, Merchant in Greenock v. Messrs. Auchie, Ure, and Co. Merchants in Glasgow [1810] UKHL 5_Paton_291

UKHL
John Spence, Merchant in Greenock, Trustee on the Sequestrated Estate of William Mathie, Merchant in Greenock v. Messrs. Auchie, Ure, and Co. Merchants in Glasgow
[1810] UKHL 5_Paton_291 · 1810-03-16
Reversed in the House of Lords, and held, That the fourteen puncheons were to be considered as being completely in possession of Mathie at the time of his bankruptcy, as in a question between vendors and vendee.Thirty-two puncheons of rum, belonging to the respondents, were lodged and bonded in the King's warehouses, kept by Messrs. Sandeman. While in this situation, the respondents sold the rum by auction, Mathie becoming the purchaser, giving bill for the price at four months, and receiving a delivery order from the sellers, which was duly intimated to the warehousemen, and the sale marked by them in their books, with the name of Mathie as the purchaser. Mathie thereafter sold eighteen puncheons, which were delivered, and the duties paid. But fourteen puncheons still remained in the King's cellar, when he became bankrupt, with the bill for the price still unpaid to the respondents. In an action brought by them to recover the fourteen puncheons, as still undelivered and in transitu , Held them entitled to stop in transitu .

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The respondents, Messrs. Auchie, Ure, and Co. imported a considerable quantity of rum into the port of Greenock. It was deposited, on its arrival, in the cellars or warehouses of Messrs. Sandeman, general agents in Greenock, who granted bond, with cautioners, to the proper officers, for the King's duties. One key of the warehouse, according to the bonding statutory regulations being kept by them, and another by the revenue officers, for security of the duties, without payment of which the rum could not be removed.In this situation of matters, Messrs. Auchie, Ure, and Co. exposed the rum to auction and sale on 15th December 1802; and William Mathie purchased at the sale thirty-two puncheons of this rum, at the price of £792. 12 s ., gave bill for the price, at four months date, and received a delivery order for the rum from Auchie, Ure, and Co., which being duly intimated to Messrs. Sandeman, they marked, opposite to the entry in their books, of each puncheon, the name of William Mathie, as the purchaser thereof.Soon thereafter, eighteen puncheons were taken out of the warehouse on payment of the duties, and sold by William Mathie. The other fourteen puncheons remained still in the cellars, when William Mathie became bankrupt, which was before the bill for the price to the respondents fell due.Aug. 26, 1803.In these circumstances, the respondents presented a petition to the Water Bailie, concluding, “That as the bill granted for the price was not paid, Messrs. Sandeman ought to be ordained to deliver the said rum to them, or their order, and that the said Water Bailie ought to grant warrant for selling the same, and for applying the proceeds, after deducting the expenses, towards payment of the said bill.” The appellant, as Mathie's trustee, opposed the application.” But the Water Bailie pronounced this interlocutor:—being their property; authorizes them to receive the same from Messrs. Sandeman and the revenue officers, in whose joint custody it is now stated to be, upon payment of the duties, and to sell the same by public roup,” as craved.
“Having considered the petition, answers, &c., invoice therewith produced, and replies: Finds the complaint relevant: Finds that the pursuers are entitled by law to reclaim the fourteen puncheons of the rum sold by them to the defender, William Mathie, still remaining in the King's cellars, in respect the price thereof has not been paid, therefore prefers them to the said rum as still

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Sept. 26, 1803.

Dec. 15, ——

Nov. 23, 1804.A reclaiming petition against this judgment was refused by the Water Bailie. An advocation was then brought to the Court of Session, which was also refused. A second bill was also refused. And, on reclaiming petition to the Court, the Lords adhered to the interlocutor of the Lord Ordinary. * On second reclaiming petition, the Lords again adhered.

Dec. 18, ——

Against these interlocutors the present appeal was brought to the House of Lords.Pleaded by the Appellant .—1. The possession of these thirty-two puncheons of rum was effectually given to Mathie, three months previous to his bankruptcy. The jus proprietatis was therefore complete in him long antecedent to the period when the fourteen puncheons, that continued unsold in Messrs. Sandeman's custody, were reclaimed by the respondents. This appears from all the facts of the case, none of which are, or can be disputed. Messrs. Auchie, Ure, and Co., gave an order to Messrs. Sandeman, the custodiers, to deliver up the rum, marked with specific marks, to Mathie, the buyer. Messrs. Sandeman, immediately upon that intimation, altered the entries in their books, which was their usual manner of notifying a change of the

Footnote

* Opinions of the Judges.Lord President Campbell ,—“This is a question about stopping in transitu . In my opinion, the interlocutor reclaimed against is right. The result of the authorities quoted is in favour of that interlocutor. Sandeman and Co. were still acting as interposed persons, and as general agents for all concerned. Mathie had no complete hold of the goods, but only a mere constructive possession. The case of an indorsed bill of lading is different from a transfer of this kind by an order of future delivery.Lord Meadowbank .—“There was not merely a constructive but an actual delivery. The King had merely a pledge, but the property was in Mathie. At this rate, goods in the King's cellar become not saleable, except for ready money. These goods have been a kind of credit to Mathie.”Lord Hermand .—“I think the interlocutor right, on the ground that there was here an ambiguous custody.”

Lord President Campbell's Session Papers, vol. 115.

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Harper v. Fauld, Bell's Cases, 474, per Lord Kenyon; Ellis v. Hunt , 3 Durnf. and East, p. 464. Ellis v. Hunt , ut supra. Leeds and Others v. Wright , V. iii. Bos. and Pull, 320.Slubey and Others v. Heyward and Others , 2 Hen. Black. 504.So, marking a case in which goods were packed, while in the custody of a warehouseman, was held to be a taking possession, and to constitute the custodier of the goods the warehouseman of the vendee. Also, packing and repacking, by a general agent of the vendees, without his knowledge, have been adjudged conclusive of the question of actual delivery, and an alteration of possession. If, therefore, possession of the rums was delivered to the purchaser, prior to his bankruptcy, the right of the sellers to reclaim them was, ipso facto , gone, whether the law of stoppage of goods in transitu was previously applicable to the case or not. 2. Besides, the right which a vendor has to stop goods, in case of the vendee's insolvency, whilst in their passage or transit to him, has no place here. There was no transitus or journey of the goods from the place of sale to that of final delivery, during which they could be stopped or arrested. There was no middleman or carrier intrusted with them for the purpose of conveyance from out of whose custody they could be taken. These things are essential, by the law of England, to raise the question of arrestment in transitu . There can be no right to stop goods in their passage from one place to another, where the transit is already complete, and where the goods have no passage to perform from one place to another. In the present case, there was no other place of final delivery in the view of the buyer and

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Snee v. Prescot , 1 Atk. 249.Inglis v. Usherwood , 1 East, 515.Neale v. Ball , 2 East, p. 117.Ellis v. Hunt , 4 Term. Rep. 464.Stokes v. La Riviere , 3 Term, Rep. p. 466.Hunter v. Beal , Ibid. p. 467.Pleaded for the Respondents .—The present being a question between the vendors, who have received no value for the rum, and the creditors of the vendee, who wish to apply it to their own payment, the point is, What, as between the vendors and vendee, is sufficient to complete the transference of the goods and prevent stoppage; where the price has not been paid? In all continental states, the vendor is entitled to demand his goods back, or to claim a privilege, in competition with other creditors, where the vendee fails without paying the price, and where the goods are still distinguishable

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“In former cases, the line has been precisely drawn, and they all turn on the question, Whether or not there has been an actual delivery to the bankrupt? It is of the utmost importance to adhere to that line, for if we break through it, we shall endanger the authority of the cases which have been already decided, and shall fritter away the rule entirely.”
Was there here, then, an actual, or only a constructive delivery? If the former, it signifies nothing whether the price was paid or not? If the latter, the admission that the price was not paid, offers to us the privilege of stopping in transitu , and leads directly to a confirmation of the judgment of the Court below. Now, it seems to be indisputable, that under the definition of actual delivery, none can be included, in which there is not, on the part of the vendee, either an absolute and corporal apprehension, or, at least, a direct and exclusive possession, custody and control, without the intervention of any third party or middleman. Applying this rule to the goods in question, they cannot be said to have been actually delivered. They were not given up to the exclusive control and possession of the vendee, without the intervention of any middleman. And no act of delivery took place but the intimation of an order to this middleman, and his acceptance of that order, as one he should be bound to obey when due requisition should be made, and when those duties should be paid, for which the goods were kept in bondage under his key and that of the revenue officer.After hearing counsel,The Lords find, that the pursuers, in the application to the Water Bailie, are not entitled in law, in respect that the price thereof was not paid, to retain the puncheons of rum in question, sold by them to William Mathie, which were remaining in the King's cellars. Find, That in the circumstances of this case, these goods ought, (in a question as between the vendor and vendee thereof, in whose possession the same were), to be considered as being in the possession of William Mathie the vendee, before he became bankrupt, inasmuch as Messrs. Sandieman ought, in such a question, between such parties, in the circumstances of this case, to be considered as holding them prior to the bankruptcy, as the agents and servants of the vendee only. And it is therefore ordered and adjudged. That all parts of the several interlocutors complained of, so

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Counsel: For Appellant, William Adam, M. Nolan. For Respondents, Sir Sam. Romilly, Geo. Jos. Bell, Henry Brougham.Note .—Before this reversal was pronounced in the House of Lords, it had been decided in the Court of Session, in another case, ( Tod and Co. v. Rattray , 1st Feb. 1809,) upon a strongly urged opinion delivered by Lord President Hope, that their judgment in Spence v. Auchie, Ure, and Co. , was erroneously decided. Lord President Blair and Lord Meadowbank concurring in this.