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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Vickers v. Hertz [1871] ScotLR 8_482 (20 March 1871)
URL: http://www.bailii.org/scot/cases/ScotCS/1871/08SLR0482.html
Cite as: [1871] SLR 8_482, [1871] ScotLR 8_482

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SCOTTISH_SLR_Court_of_Session

Page: 482↓

Court of Session Outer House.

Monday, March 20. 1871.

8 SLR 482

Vickers

v.

Hertz.

(Vide ante, vol. vi. p. 417, for parallel case of Pochin & Co. v. Robinow and Marjoribanks.)


Subject_1Mandate
Subject_2Delivery Order
Subject_3Sale
Subject_4Pledge — Fraud — Factors Act, 5 and 6 Vict. c. 39, §§ 1 and 4.
Facts:

Where A had purchased iron from the Carron Company, and held the company's ordinary delivery note for it, and employed B Brothers to dispose of it for him, sending them delivery orders upon the company in the ordinary form as if to purchasers; and B Brothers, instead of selling it, fraudulently gave it in pledge to C for advances made on it to themselves, and transferred to him the delivery warrants, which transference he, in bona fide and ignorance of the fraud, intimated to the company, and had the iron placed to his credit in their books, and upon B Brothers' bankruptcy sold it to cover his advances to them:— Held, affirming the judgment of the Court of Session, that B Brothers had been placed by A in a position effectually to make over the right to the iron to C in security of his advances to them, and that he was entitled to sell it, and recover these advances—the ground of their Lordships' judgment being, that the Factors Act, 5 and 6 Vict. c. 39, applied to Scotland as well as England; that it applied to goods not specific as well as specific, if the goods were deliverable on demand; and conferred on B Brothers a power to deal as they had done with the documents of title.

Headnote:

This was an appeal from the judgment of the First Division of the Court of Session in a case parallel in all respects to, and decided at the same time with that of Pochin § Co. v. Robinow and Marjoribanhs ( vide ante, vol. vi, p. 417; and Macph. vii, p. 622). The present case, however, was the one taken to the House of Lords to try the question involved in both. The main circumstances of the case, which will be more fully gathered from the report in the case of Pochin & Co., above referred to, were as follows:—In 1866 the pursuer Vickers had purchased from the Carron Company a quantity of pig-iron of the quality called No. 1 Carron pig-iron. For this iron Vickers held the usual delivery note of the Carron Company in his favour, but had received no actual delivery. Wishing to dispose of it he employed Messrs Campbell Brothers, iron brokers and merchants in Glasgow, to sell it for him at 67s. 6d. per ton. He accordingly sent to Campbell Brothers delivery orders upon the Carron Company, authorising delivery to them in the usual terms, as though they had been themselves the purchasers. On receiving these orders, Campbell Brothers took them to hertz, a merchant in Glasgow, who advanced a sum of £2400 upon them on receiving the orders indorsed in his favour to the Carron Company. In this transaction Mr Hertz was acting quite in bona fide, and without any knowledge of the fraud which was being committed by Campbell Brothers. Hertz immediately intimated the delivery order to the Carron Company, who returned an acknowledgment

Page: 483↓

that the iron had been placed to his credit in their books. Campbell Brothers shortly after became bankrupt; and Mr Hertz sold the iron to recover his advances.

Mr Vickers raised the present action in the Sheriff-court of Lanarkshire, whence it was brought by advocation to the First Division of the Court of Session. He claimed restitution of the iron, or at any rate of its value, on the ground that Campbells had fraudulently transferred the delivery warrants, and that their pledge of it was consequently invalid. It was held by the Judges of the Court of Session that Vickers, by his transmission of an unqualified order to Campbell Brothers, had put them in a position to go into the market as owners of the iron, and effectually to make over the right to it to a bona fide lender or purchaser.

The pursuer appealed to the House of Lords against this judgment.

The Lord Advocate, with him Mr J. Brown, Q.C., and Mr Dicey, for the appellant.

Sir Roundell Palmer, Q.O., and Mr Jessel, Q.C., for the respondent, were not called upon in reply.

At delivering judgment—

 Judgment:

Lord Chancellor—This is a case in which the appellant having certain pig-iron to sell, employed Messrs Campbell of Glasgow to sell it, and sent them delivery orders on the Carron Company to enable the sale to be effected. Messrs Campbell, instead of selling it, fraudulently pledged it with the respondent, who now keeps the iron in order to satisfy the advances he had thus made. The case has been argued at great length, but the point lies in a small compass. The Lord Advocate took no notice of the Factors Act, 5 and 6 Vict. c. 39, which has a material bearing on the case, and he relied on general principles as to the right of property as represented by the possession of the delivery orders, and argued that as Campbell Brothers, who were merely agents or mandatories, had no right of property, so Hertz was in no better situation. Mr Brown, however, argued the case on the Factors Act, and contended that the Act applied only to specific goods, whereas here, he said, the goods were not specific. It might have been difficult to say whether these delivery orders could have passed the property to hertz if the question had turned on the construction and effect of those instruments, but it is unnecessary to decide that point, for the Factors Act seems to confer on agents, such as Campbell Brothers were, a right to deal as they have done with the documents of title. The Act applies to goods not specific as well as to specific goods if the goods are deliverable on demand. That being the case here, the decision of the Court below is right, and must be affirmed.

Lords Chelmsford, Westbury, and Colonsay concurred.

Appeal dismissed.

Solicitors: Agents for Appellant— A. Kelly Morison, S.S.C.

Agents for Respondent— Hamilton, Kinnear & Beatson, W.S.; and Grahames & Wardlaw.

 1871

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URL: http://www.bailii.org/scot/cases/ScotCS/1871/08SLR0482.html