(1858) 3 H. & N. 484, 4 H. & N. 822; 157 E.R. 1067
Exchequer Chamber
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Property (and hence risk, which was the real issue in the case) was held to pass on shipment f.o.b., although the bill of lading was made deliverable "unto shipper’s order." Wait v. Baker (1848) 2 Exch. 1 was distinguished. There seems to have been an assumption that property and risk would pass at the same time, and indeed, that if the seller had reserved title after shipment that would have constituted a breach of contract (e.g., the following statement, at p. 498):
"If, at the time the oil was shipped at Rotterdam, the plaintiffs had intended to continue their ownership, and had taken the bill of lading in the terms in which it was made for the purpose of continuing the ownership and exercising dominion over the oil, they would in our opinion have broken their contract to ship the oil ‘free on board,’ and the property would not have passed to the defendants; but if when they shipped the oil they intended to perform their contract and deliver it ‘free on board’ for the defendants, we think they did perform it, and the property in the oil passed from them to the defendants."
This view about the passing of property (that an f.o.b. seller is necessarily in breach if he reserves title after shipment) must be revised in the light of later cases, and in particular Mirabita v. Ottoman Bank, which suggests the possibility of conditional appropriation, but the risk aspects of Browne v. Hare were applied in Inglis v. Stock, where property could not have passed by the time the goods were lost, because the goods were part of an unascertained bulk.
Shortly after this case, risk was held to pass on shipment in a c.i.f. contract, in Tregelles v. Sewell, and there is no doubt that for both types of contract it remains the general rule that risk passes on shipment. In Tregelles v. Sewell, it seems probable that property also passed on shipment, since the goods had been paid for, but just as for f.o.b., the rule does not depend on the time of property passing, and indeed, in c.i.f. contracts, it is usual for the property to pass on tender of documents (see, e.g., Ginzberg v. Haemetite Steels), i.e., after the passing of risk.
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These notes were last updated on 01 Jan 98.
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