Brandt v Liverpool Brazil

Under the Bills of Lading Act, 1855 (now replaced by the Carriage of Goods by Sea Act 1992) the transfer of a bill of lading assigns the contract of carriage if the transferee owns the goods at the time of suit. A consignee named in the bill of lading to whom the property has passed and an indorsee who has acquired property take the benefits and the burdens of the contract of carriage contained in the bills of lading as if this had been actually made with them. Sewell v Burdick (1884) machinery was shipped to a Black Sea port under a bill of lading making goods deliverable to shippers or assigns. The shipper endorsed the bill to his bank as security for a loan. The goods were warehoused on arrival in Russia but after a year sold to pay for customs and other charges. The shipowners sued the bankers for freight as bill of lading holders. The action was dismissed because the bankers were not the owners of the bills of lading; they were simply pledgees and they had not claimed the goods. The fact that cargo-owners might not have title to sue the carrier led to the implication of a contract between the presenter of a bill and the carrier under which a contract on the terms of the bill of lading came into existence when the carrier delivered the cargo in exchange for the holder presenting the bill and paying the freight. In Brandt v Liverpool Brazil and River Plate Steam Navigation Co. a bill of lading was indorsed to pledgees who made an advance to the shippers. On arrival of the goods they presented the bill of lading, paid the freight and took delivery of the goods from the owners. The Court held that a contract ought to be inferred between the shipowners and the indorsees of the bill of lading to deliver and accept the goods according to the terms of the bill of lading. The rights under the contract follow the property in the goods, provided the owner is named in the bill as consignee or has the bill of lading endorsed to him. The indorsee acquires the right to claim for breaches of the contract committed before as well as after he becomes the owner of the goods. The indorsement need not be special. Simple delivery of the bill of lading endorsed in blank is sufficient. With the right to sue are also transferred the liabilities in respect of the goods under the contract. The contract assigned by the indorsement is that which is expressed in the bill of lading.