Chapman Bros v Verco Bros Co Ltd

[1933] HCA 23
(1933) 49 CLR 306

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(Judgment by: Starke J)

Chapman Bros
vVerco Bros Co Ltd

Court:

Judges: Rich J

Starke JDixon J
Evatt J
McTiernan J

Judgment date: 8 May 1933

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Judgment by:
Starke J

Chapman Bros., who are farmers, delivered, on terms set forth in a document described as a storage warrant, some 2,559 bags of wheat to Verco Bros. & Co. Ltd., which carries on the business of a merchant and miller. It is admitted that upon delivery the bags were stacked on land belonging to Verco Bros. & Co. Ltd., together with other wheat delivered to it by other farmers on sale or in exchange for like storage warrants, that all such wheat was stacked together, that the wheat delivered by Chapman Bros. to Verco Bros. & Co. Ltd. had no mark or symbol or other means of identification thereon, and that the bags were of the same type as used by all other farmers in South Australia. The question is whether the wheat delivered by Chapman Bros. to Verco Bros. & Co. Ltd. was transferred to it for value, or was deposited in bailment so that the bailor might require its restoration. The answer depends upon the intention of the parties, gathered from the terms of the storage warrant.

This warrant is set out in the judgment under appeal and in the transcript prepared for this Court, and I need not repeat its terms; suffice it to say that Verco Bros. & Co. Ltd. agreed, at any time Chapman Bros. so desired, to purchase and pay for the whole or any part of the wheat covered by the warrant at the current market price on the day of purchase, but so that on 30th November 1932 it should purchase and pay for the balance of the wheat then covered by the warrant. The third clause stipulated that Verco Bros. & Co. Ltd. would at any time upon request return to Chapman Bros. a quantity of fair average quality wheat equal to that then remaining unpurchased on storage with it, but a proviso is added that it should not be required to return the identical wheat. In case the wheat were purchased, Verco Bros. & Co. Ltd. bore storage and insurance charges, but, in case of the return of any wheat, Chapman Bros. agreed to pay buyer's commission, advances and accrued interest and dockages, together with storage charges.

The principles of law applicable have been authoritatively stated in South Australian Insurance Co. v. Randell ^[F2] . If the identical subject matter is to be restored, either as it stood or in altered form, the case is one of bailment. If, on the other hand, the identical subject matter, either as it stood or in altered form, is not to be returned, but a different thing of equal quantity and quality may be given as an equivalent, then a bailment is not created: it is a transfer of property, and the title to the thing originally delivered vests in the transferee. I have looked at the passages cited in Benjamin on Sale , 6th ed. (1920), pp. 380-382, especially that, at p. 381, attributed to Mr. Justice Holmes of the Supreme Court of the United States (though I have been unable to obtain the American Law Review ), and also at the cases referred to in Benjamin . But my impression is that both the Canadian and the American cases accord with the view of the Judicial Committee (see Benedict v. Ker ^[F3] ; Powder Co. v. Burkhardt ^[F4] ). However this may be, the principle of the decision in South Australian Insurance Co. v. Randell is decisive so far as this Court is concerned. Some differences in detail exist between the facts proved in that case and those proved in the case now before us. But the critical fact is the same in both, namely, that the respondent was under no obligation to return the identical wheat as it stood or in altered form, but only some other wheat equivalent in quantity and quality.

The judgment below should be affirmed and this appeal dismissed.