E. Clemens Horst Co. v. Biddell Brothers [1911] UKHL 680 (03 November 1911)

E. Clemens Horst Company


Biddell Brothers.


Subject_Sale — C.i.f. Contract — Terms Net Cash — Payment Due — Delivery — Tender of Shipping Documents — Sale of Goods Act 1893 (56 and 57 Vict. c. 71), secs. 28 and 34.

A contract for the sale of hops of specified quality provided that they should be shipped by the sellers from San Francisco to Sunderland, and paid for by the purchasers by weight c.i.f. “terms net cash.” The purchasers declined to pay the price until after arrival at the port of destination and opportunity for examining the goods.

Held that the sellers in a c.i.f. contract were entitled to payment of the price upon tender of the bill of lading and insurance policy.


In a c.i.f. contract for the sale of goods to be shipped from San Francisco to Sunderland the purchasers declined to pay the price until after arrival and opportunity for inspecting the goods. The sellers accordingly declined to ship the goods, and the purchasers sought damages for breach of contract. Judgment in favour of the sellers was pronounced by Hamilton, J., and reversed by the Court of Appeal ( Vaughan-Wllliams and Farwell, L.JJ., dissKennedy, L.J.)

The sellers appealed.

At the conclusion of the arguments their Lordships gave judgment as follows—


Lord Chancellor (Loreburn)—In this case there has been a remarkable divergence of judicial opinion. Hamilton J., and Kennedy, L.J., holding one view, and Vaughan-Williams and Farwell, L.JJ., another. The contract, no doubt, is one of a special and peculiar kind, as might be inferred from the difference of opinion to which I have referred. For my part I think it reasonably clear that this appeal ought to be allowed. The admirable and remarkable judgment of Kennedy, LJ., illuminating, as it does, the whole field of controversy, relieves me from the necessity of saying much upon the subject.

This contract is what is known as a cost, insurance and freight, or c.i.f. contract, and under it the buyer was to pay cash. But when? The contract does not say. The respondents say on the physical delivery and acceptance of the goods when they have come to England. Section 28 of the Sale of Goods Act 1893 says in effect that, unless otherwise agreed, payment must be made on delivery—that is, on giving possession of the goods. It does not say what is meant by delivery. Accordingly we have to supply from the general law the answer to that question. The question is, when is there delivery of goods on board ship? That may be quite different from delivery of goods on shore. The answer is that delivery of the bill of lading when goods are at sea may be treated as delivery of the goods themselves. That is so old and so well established that it is unnecessary to refer to authorities on the subject.

In my judgment it is wrong to say upon this contract that the vendor must defer tendering the bill of lading until the ship has arrived in this country, and still more wrong to say that he must wait until the goods are landed and examination made by the buyer. Upon the counter-claim I am of opinion that the Court of Appeal were right. The result will be that Hamilton, J.’s, order will be restored as to the claim, and that as to the counterclaim there must be judgment for the defendants, with 1s. damages, without costs.

Lords AtkinsonGorell, and Shaw concurred.

Judgment appealed from reversed.


Counsel for Appellants— Atkins, K.C.— F. D. Mackinnon. Agents— Parker, Garrett, & Company, Solicitors.

Counsel for Respondents— Shearman, K.C.— Eustace Hills. Agents— Nicholson, Graham, & Jones, Solicitors.



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