BILL OF LADING. A receipt for goods, upon shipment, signed by some person authorised to sign the same on behalf of the shipowner. The document states that the goods have been shipped in good order, and quotes the rate at which the freight is to be paid by the consignees. A note is usually made upon a bill of lading that the weight, quantity and quality of the cargo is unknown. The shipowner undertakes to deliver the goods at their destination in the same con dition as they were when he received them.
Bills of Lading are usually drawn in sets of three, each one stamped, and in addition there are two copies, unstampcd. Of these " copies " one is given to the master and the other is retained by the loading brokers. The " copies " are of no value. One of the three stamped bills of lading is sent by the shipper to the consignee by one mail, and another is sent to him by another route, if possible, or by the following mail, and the third is retained by the shipper as evidence in support of a claim for insurance, in the event of the ship being lost, that the goods were in that ship. On the arrival of the ship at its destination the consignee max, by handing the bill of lading to the master of the ship and paying all claims for freight and other charges. obtain possession of the goods. If the consignee wishes to transfer the goods to some other person. he can. by simply indorsing the bill of lading and delivering it to that person. constitute him the absolute owner of the goods. If such a transfer is made by the consignee in good faith and for value. the consignor's right to stop the goods in transit is cancelled ; but as a bill of lading is not a negotiable instru ment, it follows that if the person who trans fers it has no title or a defective title to the goods, the person to whom it is transferred obtains no better title than the transferor had.
During the time a cargo is at sea, the bill of lading is the symbol of the cargo, and " the indorsement and delivery of the bill of lading operate as a symbolical delivery of the cargo." If the consignee's name is not inserted in the bill of lading, the ownership of the goods remains in the consignor.
When the goods received on board are in good order and no adverse remarks, such as " boxes broken," etc., are made upon the bill of lading, it is called a clean bill of lading.
As already stated, the master of the ship delivers the goods to the person who presents the bill of lading, but if it should happen that two different purchasers have each received one of the bills of lading, the master is not liable if he delivers the goods to the pur chaser who comes first with a bill of lading, provided, of course, he acts in good faith and has no notice of the conflicting claims. It
will be noticed in the specimen, given below, of a bill of lading, that the master or purser affirms to (two or three, as the case may be) bills of lading, " one of which bills being accomplished, the others to stand void." It is therefore necessary, in order to have a complete security, that all the bills of lading should be held.
In addition to holding all the bills of lading. a " stop order " upon the goods may be lodged by the person about to make an advance upon them.
With regard to the three parts of a bill of lading Earl Cairns said (in Glyn fr Go. v. The East and Irest India Dock Co., 1882, 7 A.C. 5911: " All that any person who advances money upon a bill of lading will have to do. if he sees, as he will see on the face of the bill of lading, that it has been signed in more parts than one, will be to require that all the parts are brought in— that is to say, that all the title-deeds are brought in. 1 know that that is the practice with regard to other title-deeds, and it strikes me with some surprise that any one would advance money upon a bill of lading without taking that course of requiring the delivery up of all the parts. 1 If the person advancing the money does not choose to do that, another course which he may take is, to be vigilant and on the alert, and to take care that he is on the spot at the first arrival of the ship in the dock. If those who advance money on bills of lading do not adopt one or other of those courses, it appears to me that if they suffer, they suffer in consequence of their own act." A banker who advances against wool (for example) which has been imported from abroad, may adopt the following course : he may take up the bills of lading and instruct the shippers to send the wool by rail to his order. He may then direct the railway company to deliver it to the combers, on his behalf, who will ascertain and advise the banker as to the various qualities and quantities " tops " " middles," " bottoms," etc., so that he may see what it will realise at present quotations. When the customer sells the wool, the banker then orders it to be delivered in accordance with the cus tomer's instructions against payment of the purchase price.