Sterns Ltd v Vickers Ltd
The buyer of an undivided part of a bulk may bear the risk of loss of the goods, even though property has not passed, if the parties so intended.
Facts
Vickers sold 120,000 gallons of white spirit to Sterns, out of a larger quantity of 200,000 gallons stored in a tank owned by a third party. Vickers gave Sterns a delivery warrant, which the storage company accepted. Sterns did not take delivery for some months, and in that time the spirit in the tank deteriorated. Sterns claimed damages from Vickers, arguing that the risk remained with Vickers, because property had not passed.
Legal principle
The Court of Appeal held that Sterns bore the risk. Scrutton LJ said that, although property had not passed, because the goods had not been separated from the bulk, the parties had intended that the risk should pass to the buyer when the storage company accepted the delivery warrant, because from that time the buyer could take the spirit whenever it chose. Under section 20 of the Sale of Goods Act, the rule that risk passes with property is subject to the parties' contrary intention.
Related cases on passing of property and risk
- Carlos Federspiel & Co SA v Charles Twigg & Co Ltd [1957] 1 Lloyd's Rep 240
- Demby Hamilton & Co Ltd v Barden [1949] 1 All ER 435
- Dennant v Skinner and Collom [1948] 2 KB 164
- Re Goldcorp Exchange Ltd [1995] 1 AC 74
- Healy v Howlett & Sons [1917] 1 KB 337
- Karlshamns Oljefabriker v Eastport Navigation Corp (The Elafonissos) [1982] 1 All ER 208
- Kirkham v Attenborough [1897] 1 QB 201
- Kursell v Timber Operators and Contractors Ltd [1927] 1 KB 298
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