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ICLR: King's/Queen's Bench Division/1929/Volume 1/BARROW, LANE AND BALLARD, LIMITED v. PHILLIP
PHILLIPS AND COMPANY, LIMITED. [1928. B. 2086.] - [1929] 1 K.B. 574

[1929] 1 K.B. 574

[KING'S BENCH DIVISION]

BARROW, LANE AND BALLARD, LIMITED v. PHILLIP PHILLIPS AND COMPANY,

LIMITED. [1928. B. 2086.]
1928 Dec. 3, 4.

WRIGHT J.

Sale of Goods - Parcel of specific Goods at Wharf - Sale of Parcel - Part of Parcel fraudulently abstracted by
third Party before Date of Contract - Validity of Contract - Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), s. 6;
s. 30.

Sect. 6 of the Sale of Goods Act, 1893, provides: "Where there is a contract for the sale of specific goods,
and the goods without the knowledge of the seller have perished at the time when the contract is made, the
contract is void":-

Held, that the section applies where part only of the goods have perished at the time when the contract is
made.

ACTION tried by Wright J. without a jury.

By a contract in writing dated October 7, 1927, Messrs. Barrow, Lane & Ballard, Ld. (hereinafter
called "the plaintiffs"), bought from the sellers thereof "E. C. P. Lot 7. 700 bags (about 25 tons)
Chinese ground nuts in shell (about equal to sample) at 26l. 5s. (twenty-six Pounds five shillings)
per ton, ex store London. Lying at National Wharves. Gross landing weights. .... Customary allow-
ances and conditions. Prompt 4th July, 1927. Rent free to 4th Nov., 1927. Net cash against delivery
order."

By an oral contract made on October 11, 1927, the plaintiffs sold to Messrs. Phillip Phillips & Co.,
Ld. (hereinafter called "the defendants"), "700 bags marked E. C. P. and known as Lot 7 of Chinese
ground nuts in shell then lying at the National Wharves in London at the price of 28l. per ton to be
computed by reference to the gross landing weights previously ascertained when the goods were
landed and placed in store at the said wharves." That contract was made verbally between Mr. G.
Lane for the plaintiffs and Mr. Brinkley for the defendants. The price was computed on the gross
landing weights and amounted to 727l. 18s. 3d. In respect of that price and of a further sum of 78l.
4s. otherwise due from them to the plaintiffs, the defendants accepted two bills of exchange for
500l. and 306l. 2s. 3d. respectively, each dated October 11,
[1929] 1 K.B. 574 Page 575

1927, drawn by and payable to the order of the plaintiffs. On October 12, 1927, the defendants
handed to the plaintiffs these bills of exchange in return for a delivery order upon the National
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Wharves and Warehousing Company, Ld. (hereinafter called "the company"), the proprietors of the
National Wharves. On the same date the defendants presented their delivery order at the wharves,
and as no question was there raised the defendants assumed that the matter was in order. The
defendants did not inspect the goods, but they obtained a sample from the plaintiffs, who had in-
spected and sampled the goods on October 6 by their inspector and sampler. The defendants
made a re-sale contract, but the sub-purchasers were unable to complete. As the defendants did
not want the goods immediately they did nothing further for about six weeks, resting on what they
thought was their legal position.

About December 6 or 7, 1927, the defendants sent to the company two delivery orders, the first for
fifty bags and the second for a hundred bags, and pursuant to these orders 150 of the bags sold
were duly delivered to the defendants. On December 12 and 13, 1927, in the ordinary course, the
defendants sent delivery orders in favour of their carman, one for 100 bags and one for 35 bags,
but both these orders were returned endorsed "Goods not available." The representatives of the
defendants on their behalf then wrote to the company and received from them a letter dated De-
cember 13, 1927, in these terms: "With respect to your letter of this day, we very much regret to in-
form you that owing to irregular deliveries by our wharf, the 500 bags claimed by your clients,
Messrs. Phillip Phillips & Co., Ld., do not exist. The position of the company has been placed be-
fore the Midland Bank who hold debentures, and we regret that we are unable to add anything fur-
ther." It was subsequently ascertained that at the date of the contract on October 11, 1927, there
were not 700 bags in the parcel at the wharves, but only 591 bags, 109 having by that time been
fraudulently abstracted or irregularly delivered, and that between October 11, 1927, and December
6 or 7, 1927, other
[1929] 1 K.B. 574 Page 576

bags had been taken, so that on December 12, 1927, after the 150 bags had been delivered to the
defendants, none were left at the wharves. The two bills of exchange, on being presented by the
plaintiffs to the defendants for payment, were dishonoured by non-payment.

On May 30, 1928, the plaintiffs brought the present action against the defendants as acceptors of
the two bills of exchange, or in the alternative for the price of goods sold and delivered by the plain-
tiffs to the defendants on October 11, 1927, and delivered on October 12, 1927.

The plaintiffs in their points of claim said that on October 11, 1927, they sold to the defendants the
700 bags of ground nuts on the terms above mentioned, that in payment for the goods and of the
balance otherwise due the defendants accepted the two bills of exchange, that on October 11,
1927, the plaintiffs handed to the defendants a delivery order upon the company, that unknown to
either party 109 bags had wrongfully been removed from the wharves, and that the residue, name-
ly, 591 bags, was in possession of the company both when the contract was made and when the
delivery order was handed to the defendants, that the property in the 591 bags was transferred to
the defendants on October 11, 1927, when the contract was made, or alternatively on October 12,
1927, when the delivery order was handed to the defendants, and that as from one or other of
these dates the 591 bags were at the risk of the defendants, and that the plaintiffs claimed the
amount of the bills of exchange less the price of the 109 bags and interest thereon, or that in the
alternative they claimed that amount as the price of goods sold and delivered by them to the de-
fendants and interest thereon.

The defendants in their points of defence said, among other things, that it was an express or im-
plied condition precedent to the defendants' liability under the contract and/or a condition of the
contract that there were 700 bags of ground nuts marked as aforesaid lying at the wharves availa-
ble for the plaintiffs to deliver under the contract; that it was further an express or implied condition
of the contract that any
[1929] 1 K.B. 574 Page 577
 Page 3

delivery order tendered thereunder should be a true, correct and effective document, and further
that the goods named in the delivery order should in fact be available as represented thereby, and
further that the goods should be delivered thereunder when delivery was demanded; that in breach
of the condition precedent and/or condition there were not 700 bags at the wharves when the con-
tract was made; that in breach of the contract the delivery order handed by the plaintiffs to the de-
fendants was not a true, correct and effective document in that the goods it represented as lying at
the wharves were not so lying or available for delivery; that in further breach of the contract the
goods deliverable thereunder were not delivered, the company having on or about December 6 and
7, 1927, delivered 150 bags and afterwards informed the defendants that the balance, namely, 550
bags, did not exist; that the defendants denied that the property in the 591 or any number of bags
was transferred to the defendants on October 11 or 12, 1927, as alleged or at all, and that if the
plaintiffs appropriated or purported to appropriate 591 bags to the contract the defendants never
assented to or authorized the appropriation; that the defendants admitted liability for the 150 bags,
but not under the contract, and brought the sum of 180l. into Court in respect thereof; and that they
further admitted liability for the said sum of 78l. and brought that sum also into Court.

On December 3 and 4, 1928, the action was tried by Wright J. without a jury.

On behalf of the plaintiffs evidence was given by Mr. George Lane, one of their directors; and by
Mr. Webber, their head sampler and inspector, who said that on October 6, 1927, he went to the
wharves, that he found the parcel of goods in question and took samples in the ordinary way, that
he did not count the bags, as it would have been difficult to do so owing to their position, and that
he assumed that the parcel was intact. Evidence was also given by the manager of the National
Wharves and Warehousing Company, Ld., and by an inspector who was instructed to make certain
investigations in regard to goods at the wharves.
[1929] 1 K.B. 574 Page 578

On behalf of the defendants evidence was given by Mr. Brinkley and others.

Rayner Goddard K.C. and A. E. Woodgate for the plaintiffs. By the contract of sale made on October 11,
1927, the plaintiffs sold to the defendants the parcel of bags known as Lot 7 and marked E. C. P., which was
described as containing about 700 bags. At the time of sale the property in the bags included in that lot
passed from the plaintiffs to the defendants. The fact that there were not 700 bags in the lot at that date but
only 591 bags did not prevent the property in the 591 bags from passing when the contract of sale was
made. The plaintiffs could not sell more than they had at the time of sale. Sect. 6 of the Sale of Goods Act,
1893 (1), which provides that where there is a contract for the sale of specific goods, and the goods without
the knowledge of the seller have perished at the time when the contract was made, the contract is void, does
not apply to a case where the bulk of the goods are still in existence at the time of the sale and the purchaser
thereafter exercises dominion over the goods. In such a case there is a valid sale and transfer of property in
the goods which are still in existence at the time of the sale. In the present case the bulk of the goods speci-
fied were

(1) The Sale of Goods Act, 1893, provides:

Sect. 6. "Where there is a contract for the sale of specific goods, and the goods without the knowledge of the seller have per-
ished at the time when the contract is made, the contract is void."

Sect. 20. "Unless otherwise agreed, the goods remain at the seller's risk until the property therein is transferred to the buyer, but
when the property therein is transferred to the buyer, the goods are at the buyer's risk whether delivery has been made or not.
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"Provided that where delivery has been delayed through the fault of either buyer or seller the goods are at the risk of the party in
fault as regards any loss which might not have occurred but for such fault."

Sect. 30. "(1.) Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject
them, but if the buyer accepts the goods so delivered he must pay for them at the contract rate.

"(2.) Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell, the buyer may accept the goods
included in the contract and reject the rest, or he may reject the whole. If the buyer accepts the whole of the goods so delivered
he must pay for them at the contract rate."
[1929] 1 K.B. 574 Page 579

still in existence at the time of the sale, and the defendants exercised dominion over them by making a
sub-sale of them. By s. 20 of the Act of 1893 "where there is an unconditional contract for the sale of specific
goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it
is immaterial whether the time of payment or the time of delivery, or both, be postponed." That provision ap-
plies to the present case. In any event the property in these bags passed when the delivery order was given
by the plaintiffs to the defendants and accepted by them. Sect. 30 of the Act provides that where the seller
delivers to the buyer a quantity of goods less than he contracted to sell, if the buyer accepts the goods so
delivered he must pay for them at the contract rate. After the contract was made 450 bags out of the 591
disappeared. These goods perished through the failure of the defendants to take delivery of them for a peri-
od of seven weeks. Sect. 20 of the Act provides that "when the property therein is transferred to the buyer,
the goods are at the buyer's risk whether delivery has been made or not. Provided that where delivery has
been delayed through the fault of either buyer or seller the goods are at the risk of the party in fault as re-
gards any loss which might not have occurred but for such fault": see also Martineau v. Kitching (1), per
Blackburn J. If there were not 700 bags in Lot 7 both parties acted under a mistake and the defendants dealt
with such bags as were there, and they cannot now be heard to say that the property in such bags as were
there did not pass to them.

Le Quesne K.C. and D. B. Somervell for the defendants. The contract between the parties was for the sale
of one entire parcel of 700 bags, and since at the date of the contract there were only 591 bags in existence,
the subject-matter of the contract was non-existent at that date and the contract was accordingly void. In the
case of a contract for the sale of a house, if, without the knowledge of the parties, the house is burned down
at the date of the contract, what is left of the house is not the subject-matter contemplated by

(1) (1872) L. R. 7 Q. B. 436, 456.

[1929] 1 K.B. 574 Page 580

the parties; and in a case where two or more things are sold under an entire contract and one or more of
them have perished at the date of the contract, the remainder of them is not what the parties had in view;
and in either of these cases the contract is void: see Benjamin on Sales, 6th ed., pp. 161, 162; and the same
principle applies in the present case. A contract for the sale and delivery of so many tons of goods is a con-
tract for the sale and delivery of an indivisible parcel of goods, and if part of the goods is not forthcoming, the
buyer may reject the whole: Behrend & Co. v. Produce Brokers' Co. (1) Where, as here, there is a contract
for the sale of specific goods and part of the goods, without the knowledge of the seller, are non-existent at
the date of the contract, s. 6 of the Sale of Goods Act, 1893, applies and the contract is void.

WRIGHT J. This is one of those unfortunate cases in which one of two innocent parties has to suffer by the
fraud of a third party. The trouble has arisen because certain goods deposited in the ordinary course of
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business with a firm of wharfingers in London, the National Wharves and Warehousing Company, Ld., had
been fraudulently abstracted while in their possession. This is the first case in my experience in which
wharfingers in London, in whom great confidence has always been reposed, have failed in their trust. I do not
know what individuals were guilty of the fraudulent transaction, nor does it concern me. The wharfingers are
now in liquidation, and it appears from statements in a letter from them dated December 13, 1927, that any
assets which they have are in the hands of the debenture holders. The result is that whoever has to suffer by
the loss of these goods will, so far as I can see, have no redress from the wharfingers.

As between the plaintiffs and the defendants the matter arises in this way. The plaintiffs had purchased un-
der a contract in writing dated October 7, 1927: "E. C. P. Lot 7. 700 bags (about 25 tons) Chinese ground
nuts in shell (about equal to sample) at 26l. 5s. .... per ton, ex Store London.

(1) [1920] 3 K. B. 530; 25 Com. Cas. 286.

[1929] 1 K.B. 574 Page 581

Lying at National Wharves. Gross landing weights .... Prompt 4th Nov. 1927 .... Net cash against delivery
order." On October 11, in the same year, the plaintiffs entered into an oral contract with the defendants, by
which they sold to the defendants "700 bags marked E. C. P. and known as Lot 7 of Chinese ground nuts in
shell then lying at the National Wharves in London at the price of 28l. per ton to be computed by reference to
the gross landing weights previously ascertained when the said goods were landed and placed in store at the
said wharves." The price was computed on the gross landing weights and amounted to 727l. 18s. 3d., and
about that there is no dispute. In respect of that price and a further sum, which is not very material to this
case, of 78l. 4s. for other goods sold by the plaintiffs to them, the defendants accepted two bills of exchange,
one for 500l. and the other for 306l. 2s. 3d. each dated October 11, 1927, payable to the order of the plain-
tiffs. These bills of exchange were handed over to the plaintiffs on October 12, 1927, in return for a delivery
order.

At the last mentioned date, in my judgment, it was intended that the property in the 700 bags should pass
from the plaintiffs to the defendants. I regard this parcel as an indivisible parcel of goods within the descrip-
tion given by Bailhache J. in the case of Behrend & Co. v. Produce Brokers' Co (1) In that case the parcel
was a parcel of 200 tons of Egyptian cotton-seed and the learned judge there held, and I think rightly, that in
commerce that was an indivisible parcel of goods. The same is certainly true, in my judgment, a fortiori of
this specific parcel of 700 bags, the location of which was expressly defined in the contract. The defendants
on October 12, 1927, presented their delivery order to the wharf, and as no question was there raised they
thereupon assumed that the matter was in order. [His Lordship stated the facts and the effect of the evidence
relating to the inspection and sampling of the goods, the delivery to the defendants of 150 bags on Decem-
ber 6 or 7, 1927, and the return to the defendants of the delivery orders of December 12

(1) [1920] 3 K. B. 530; 25 Com. Cas. 286.

[1929] 1 K.B. 574 Page 582

and 13, 1927, and continued:] It has now been ascertained and agreed that at the date of the contract on
October 11, 1927, there were not 700 bags in the parcel but only 591 bags, 109 having by that time been
fraudulently abstracted or irregularly delivered. In the interval between October 11 and December 6 or 7 oth-
er bags had been taken, so that on December 12, after the 150 bags had been delivered to the defendants,
none were left at all.

If the whole 700 bags had remained in the wharf on October 11, 1927, the fraudulent abstraction being sub-
sequent to that date, and the parcel intact on that date, there could be no question, I think, that the property
 Page 6

must have passed on October 12 from the plaintiffs to the defendants. But that in fact was not so. When the
contract of October 11 was made, there was not in existence any parcel such as is described in the contract.
There was a parcel of 591 bags, but there was not a parcel of 700 bags.

If, on the other hand, the whole 700 bags had been stolen on October 11, 1927, without the knowledge of
either party, or if it had been destroyed by fire - if for any such reason it did not exist as a parcel at all on Oc-
tober 11, there can be no doubt that s. 6 of the Sale of Goods Act, 1893, would have applied. [His Lordship
read that section.] The section says that as the contract has reference to specific goods and as those goods,
without the knowledge of the seller, are not in existence at the date of the contract, there is nothing on which
the contract can operate and it is void. In other words, because the parties are contracting about something
which, unknown to them, has no existence in fact, the intention of both of them is completely frustrated and
there is no contract between them. The rule has been established for many years that, where a contract re-
lates to specific goods which do not then exist, the case is not to be treated as one in which the seller war-
rants the existence of those specific goods, but as one in which there has been a failure of consideration and
mistake.

This case raises a further problem, which, so far as I know, and so far as learned counsel have been able to
ascertain,
[1929] 1 K.B. 574 Page 583

has never hitherto come before the Court. The problem is this: Where there is a contract for the sale of spe-
cific goods, such as the parcel of goods in this case, and some, but not all, of the goods have then ceased to
exist for all purposes relevant to the contract because they have been stolen and taken away and cannot be
followed or discovered anywhere, what then is the position? Does the case come within s. 6 of the Sale of
Goods Act, so that it would be the same as if the whole parcel had ceased to exist? In my judgment it does.
The contract here was for a parcel of 700 bags, and at the time when it was made there were only 591 bags.
A contract for a parcel of 700 bags is something different from a contract for 591 bags, and the position ap-
pears to me to be in no way different from what it would have been if the whole 700 bags had ceased to ex-
ist. The result is that the parties were contracting about something which, at the date of the contract, without
the knowledge or fault of either party, did not exist. To compel the buyer in those circumstances to take 591
bags would be to compel him to take something which he had not contracted to take, and would in my judg-
ment be unjust.

There is, as I have said, no authority so far on the point. There are, however, certain expressions of weight
which have been referred to during the argument. In particular in Sir Mackenzie Chalmers' book on the Sale
of Goods Act, 1893, 10th ed., p. 31, in a note to s. 6 of the Act there is this passage: "But if a man contracts
to sell five dozen of a particular brand of champagne, it would be immaterial if unknown to him his whole
stock of wine had been destroyed by fire. He must procure five dozen of that champagne elsewhere or pay
damages. A mixed case might arise which is not covered by the section. Suppose a man contracts to sell to
B. 'five dozen of the '74 champagne now in my cellar,' not knowing that all but three dozen had been de-
stroyed by fire. The question has not been decided, but probably the contract would be void." I agree with
that expression of opinion and adopt it in my judgment, although, in my opinion, the case put by the learned
author is not so strong as the present
[1929] 1 K.B. 574 Page 584

case, because the contract here was for a parcel of goods which was indivisible and described in every par-
ticular. I have also been referred to certain passages in Benjamin on Sale, which I am quoting from the 6th
edition of that work published in 1920. At p. 161 the author is dealing with a well known case to which I need
not refer, where the contract relates to a specific chattel which at the date of the contract did not exist without
either party knowing of that fact, and, after stating the rule, he says: "Pothier says: 'There must be a thing
sold, which forms the subject of the contract. If then, ignorant of the death of my horse, I sell it, there is no
sale for want of a thing sold. For the same reason, if when we are together in Paris, I sell you my house at
Orleans, both being ignorant that it has been wholly, or in great part, burnt down, the contract is null, be-
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cause the house, which was the subject of it, did not exist: the site and what is left of the house are not the
subject of our bargain, but only the remainder of it.'" I think that in principle, though the facts are different, it is
equally true in this case, that what was left of the parcel at the date of the contract, namely 591 bags, was
not the subject of the bargain. The subject of the bargain was the entire parcel of 700 bags. On the following
page the learned author deals with the perishing of part of the thing sold, and says: "Where two or more
things are sold for an entire price, or otherwise under an entire contract, and one or more of them have per-
ished at the date of the contract, it is conceived that the contract is also void as to the remainder." That in my
judgment, for the reasons I have given, is an accurate statement. Then the author continues: "This was, at
least, the rule of the civil law, which says: 'Si duos quis servos emerit pariter uno pretio, quorum alter ante
venditionem mortuus est, neque in uno constat emptio' (1); and is in accordance with principle." It may be
said that here there was an entire price, because there was a lump sum ascertained in accordance with the
contract and represented by the bills of exchange; but in any case the contract, in my judgment, was an en-
tire

(1) D. 18, 1, de cont. empt. 44.

[1929] 1 K.B. 574 Page 585

contract. The general principle is also discussed in the work of Sir Frederick Pollock on Contracts, 9th ed.,
pp. 530 and 531.

It has been argued in this case that the acceptance of the delivery order by the wharfingers without demur
constituted an appropriation of the goods and involved the passing of the property in the 591 bags, the re-
mainder of the parcel. I do not think that that contention is sound, because there was no authority or intention
on the part of either the plaintiffs or the defendants for an appropriation of anything but the 700 bags. The
delivery order was for 700 bags, and the entry in the wharfingers' book would be in accordance with the de-
livery order, and there was no parcel of 700 bags which could be the subject of that delivery order or of that
appropriation.

It was further argued, though perhaps not very strongly, that as the defendants actually took 150 bags, a part
of the 700 bags, the case came within s. 30 of the Sale of Goods Act, 1893, and was to be treated as one in
which there was a tender of a wrong quantity - I suppose 591 bags instead of 700 bags - and that thereupon
the buyer had an option under that section of taking 591 bags, paying proportionately, as I understand the
plaintiffs' contention. If that argument is sound, the amount to be paid for the goods must be limited, but in
my judgment that argument is not sound. Sect. 30 is a section giving an option to the buyer where the seller
does not fulfil his contract, because he tenders the wrong quantity. It is obvious that no one has an option,
unless he knows what is being done, and in this particular case there was no knowledge of that. This point,
however, cannot arise on my first conclusion that this contract is void.

Neither, in my judgment, can it be said that any property passed to the buyers on the facts of this case by
reason of any laches on the part of the buyers. It is true that the buyers, the defendants, did not inspect; it is
true that they did not take the trouble to obtain actual delivery of the goods till December, but I am satisfied
on the evidence that there was no unreasonable delay. But even if there had been,
[1929] 1 K.B. 574 Page 586

it would not have affected my conclusion that the contract is void, and that there is no contract under which
the property has passed.

Still less can the position be changed by the fact that the defendants made a sub-contract under which no
steps were taken to obtain any delivery of the goods. That sub-contract no doubt was equally void with the
contract with which I am concerned in this action.
 Page 8

The result is that in my judgment the plaintiffs fail in their claim on the bills of exchange. There has been a
payment into Court of 258l. 4s. arrived at in this way. There is owing from the defendants to the plaintiffs 78l.
4s., the balance of an account, and they have tendered before action brought, as I gather, the sum of 180l.
as representing the price of the 150 bags which they actually received. The plaintiffs therefore are entitled
admittedly to the sum of 258l. 4s. which has been brought into Court, and an order will be made for that sum
to be paid to them. On the actual claim, however, there will be judgment for the defendants.

Judgment accordingly.

Solicitors for plaintiffs: Burnie & Coleman.

Solicitors for defendants: Keene, Marsland, Bryden & Besant.

J. R.