Goods were shipped by D. B. & Co. in the enemy's country on
board a neutral ship bound to a neutral port, which was captured
and brought in for adjudication. The invoice was headed "consigned
to Messrs. D.B. & F., by order and for account of J. L." In a
letter accompanying the invoice from the shippers to the
consignees, they say
"For Mr. J. L. we open an account in our books here, and debit
him, &c., but find his order for goods will far exceed the
amount of these shipments; therefore, we consign the whole to you,
that you may come to a proper understanding with him."
Held that the goods were, during their transit, the
property and at the risk of the enemy shippers, and therefore
subject to condemnation as prize.
In general, the rules of the prize court as to the vesting of
property are the same with those of the common law, by which the
thing sold, after the completion of the contract, is properly at
the risk of the purchaser.
It is competent for an agent abroad who purchases in pursuance
of orders to vest the property in the principal immediately on the
purchase. This is the case when he purchases exclusively on the
credit of his principal or makes an absolute appropriation and
designation of the property for his principal.
The ship
St. Jose Indiano, bound from Liverpool to Rio
de Janeiro, was captured and sent into the United States, as prize
of war in the summer of 1814. The ship and most of the cargo were
condemned as British property in the circuit court, and there was
no appeal by any of the claimants except in behalf of Mr. J.
Lizaur, of Rio de Janeiro. The right of Mr. J. Lizaur to have
restitution of property belonging to him at the time of capture was
not contested by the captors, but it was contended that the
property in question, when captured, was at the risk of the
shippers, Messrs. Dyson, Brothers & Co. of Liverpool. The bill
of
Page 14 U. S. 209
lading did not specify any order or account and risk. The
invoice was headed "consigned to Messrs. Dyson, Brothers &
Finnie, by order and for account of J. Lizaur." In a letter
accompanying the bill of lading and invoice of 4 May, 1814, from
Dyson, Brothers & Co. to Dyson, Brothers & Finnie, they
say
"For Mr. Lizaur we open an account in our books here and debit
him, &c. We cannot yet ascertain the proceeds of his hides,
&c., but find his order for goods will far exceed the amount of
these shipments; therefore we consign the whole to you, that you
may come to a proper understanding with him."
The house of Dyson, Brothers & Co., of Liverpool and of
Dyson, Brothers & Finnie, of Rio, consist of the same persons;
goods claimed in behalf of the latter house were condemned on the
ground that both firms represented the same parties in interest,
and from this decision there was no appeal.
Page 14 U. S. 211
STORY, J., delivered the opinion of the Court, and after stating
the facts proceeded as follows:
The single question presented on these facts is in whom the
property was vested at the time of its transit; if in Mr. Lizaur,
then it is to be restored; if in the shippers, then it is to be
condemned. It is contended in behalf of the claimant that the goods
having been purchased by the order and partly with the funds of Mr.
Lizaur, the property vested in him immediately by the purchase, and
the contract being executed by the sale, no delivery was necessary
to perfect the legal title; that nothing was reserved to the
shippers but a mere right of stoppage
in transitu, and
that if they had been burnt before the shipment or lost during the
voyage, the loss must have fallen on Mr. Lizaur.
Page 14 U. S. 212
The doctrine as to the right of stoppage
in transitu
cannot apply to this case. That right exists in the single case of
insolvency, and presupposes not only that the property has passed
to the consignee, but that the possession is in a third person in
the transit to the consignee. It cannot, therefore, touch a case
where the actual or constructive possession still remains in the
shipper or his exclusive agents. In general, the rules of the prize
court as to the vesting of property are the same with those of the
common law, by which the thing sold, after the completion of the
contract, is properly at the risk of the purchaser. But the
question still recurs when is the contract executed? It is
certainly competent for an agent abroad who purchases in pursuance
of orders to vest the property in his principal immediately on the
purchase. This is the case when he purchases exclusively on the
credit of his principal or makes an absolute appropriation and
Page 14 U. S. 213
designation of the property for his principal. But where a
merchant abroad, in pursuance of orders, either sells his own goods
or purchases goods on his own credit (and thereby, in reality,
becomes the owner), no property in the goods vests in his
correspondent until he has done some notorious act to divest
himself of his title or has parted with the possession by an actual
and unconditional delivery for the use of such correspondent. Until
that time, he has in legal contemplation the exclusive property as
well as possession, and it is not a wrongful act in him to convert
them to any use which he pleases. He is at liberty to contract upon
any new engagements or substitute any new conditions in relation to
the shipment. These principles have been frequently recognized in
prize causes heretofore decided in this Court. In the present case,
the delivery to the master was not for the use of Mr. Lizaur, but
for the consignees, a house composed of the same persons
Page 14 U. S. 214
as the shippers and acting as their agents. They therefore
retained the constructive possession as well as right of property
in the shippers, and it is apparent from the letter that the
shippers meant to reserve to themselves and to their agents, in
relation to the shipment, all those powers which ownership gives
over property. It is material also in this view that all the papers
respecting the shipment were addressed to their own house or to a
house acting as their agents, and the claimants could have no
knowledge or control of the shipment unless by the consent of the
consignees under future arrangements to be dictated by them. In
this view, this case cannot be distinguished from that of Messrs.
Kimmell & Alvers, and it steers wide of the distinction upon
which Messrs. Wilkins' claim was sustained. The authorities also
cited at the argument by the captors are exceedingly strong to the
same effect.
The Aurora approaches very near to the
present case. There, the shipment, by the express agreement of the
parties, was in reality, going for the use and by the order of the
purchaser, but consigned to other persons, who were to deliver them
if they were satisfied for the payment. And Sir William Scott there
quotes a case as having been lately decided where goods sent by a
merchant in Holland, to A., a person in America, by order and for
account of B., with directions not to deliver them unless
satisfaction should be given for the payment, were condemned as the
property of the Dutch shippers.
Page 14 U. S. 215
On the whole, the Court is unanimously of opinion that the goods
included in this shipment were, during their transit, the property,
and at the risk of the shippers, and therefore subject to
condemnation. The claim of Mr. Lizaur must therefore, be
rejected.
Sentence affirmed with costs.
