Saturday, May 17, 2014

Boerenbond Belge v. Ridder (The Julia) case brief summary

Boerenbond Belge v. Ridder (The Julia) (House of Lords, 1949)
1) Facts: Seller: Ridder (Argentina); Buyer: Boerenbond Belge (Belgium) enter CIF k for rye. Buyer never received bill of lading or insurance policies but did receive delivery order. While the Julia was at sea, Belgium was invaded by German army. As a result, Ridder (as charterers), without knowledge of Boerenbond Belge, diverts shipment to Portugal and sells rye. Seller sends this amount (less than amount paid by BBelge) to Boerendond Belge as refund.
    i)    avoides Biddell Bros problem by stating net cash against presentation of papers
    ii)   bill of lading was only for entire rye and not fraction of Belge’s purchase
    iii)  Germany’s occupation of Belgium constituted force majeure
    iv)  risk passes w/ bill of lading & buyer could have received insurance money
2) Issue: What document constitutes document of title?
3) Reasoning: As CIF contract, seller’s obligation ends at loading of Julia and the forwarding of the documents. Documents of title are bill of lading, not delivery order. If document was received by buyer, buyer entitled to lesser sale price. If document was not received by buyer, buyer entitled to full refund, because the goods would have still been the responsibility of the seller.  Documents were not delivered to buyer but to Van Bree, an agent of the Belgium port. Buyer had neither actual delivery nor symbolic delivery. Alternatively, under ESGA § 16 & § 18 (5), buyer could only claim possession once their allotted amount of rye was separated from the entire grain shipment contained on the Julia. Prior to the rye’s separation, rye remained property of sellers
    Lord Porter: This was not a CIF K but rather a pure delivery K because the bulk cargo needs to be divided at Antwerp. Delivery order can function as document of title if it has signature from someone on the ship
    Lord Simmonds: delivery order had no commercial value and could not be a document of title
    ESGA §18 (5): Rule for ascertaining intention: The goods are only ascertained once appropriated at the harbor of Antwerp. That is the time when possession passes.
    Did the parties do what is mercantile reasonable? Couldn’t have a bill of lading until goods were divided so they created something else instead. This was the state 900 times before hand. They treated the goods like they were already the buyer’s goods and not the seller’s. Until now. The Belgium court even ruled the opposite from the British court.
    Who has better result? Belgium – lex mercatoria; HL – more precise decision -à but the merchants changed the ESGA and added §20A & 20B
    How can you ship a bulk cargo and still be able to contract to sell part of the bulk cargo while still in transit?
          i) Parcel up the goods, so that they are divided
          ii) Avoid CIF K, just ship via destination K, but that doesn’t allow you to transfer risk
          iii) System that says course of dealing is important - have an independent agent
4) Conclusion: Boerenbond Belge entitled to full refund. Boerenbond never received possession.

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