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JUDGMENT
AMPIAH, J.S.C.:
It is unfortunate that I have to
disagree with my esteemed
brothers and sister on their
conclusion in this appeal.
However, I feel it is extremely
desirable that there should be
no doubt in the mercantile world
with regard to legal principles
that have long been recognised.
The facts in this case briefly
are that the Plaintiffs as
IMPORTERS [a fact which the
trial Court found], imported
into this country a quantity of
rice for sale, from Cargill
International S.A. The
consignment which was carried in
the ship MV OCEAN VOICE was
covered by an Invoice dated June
15th 1989 [this was tendered as
Exhibit "B"]. The goods arrived
at the Tema Harbour around
August, 1989. The Plaintiffs
having been given the relevant
documents, including a BILL OF
LADING [in a set of six], which
was endorsed to them, took step
to take delivery of the goods.
They engaged the services of the
Ghana Ports and Harbour
Authority for stevedoring and
shore handling for which payment
they could not settle in full
until action was taken against
them. They also paid the
Defendants [Umarco (Ghana)
Limited] for their clearing and
warehousing services. However,
when the Plaintiffs went later
for the release of the goods to
them the Defendants released
only a portion of the goods and
refused to release the rest
saying that they had
instructions from Cargill
International (the Shippers of
the goods) not to release the
rest to them. Despite repeated
demands, the Defendants refused
to release the rest of the
goods. The Plaintiffs therefore
took action against the
Defendants claiming ownership of
the goods, the release of the
goods to them, accounts and
damages for conversion.
The trial Court gave judgment in
favour of the Plaintiffs and
granted them the reliefs they
sought. Not satisfied, the
Defendants appealed to the Court
of Appeal which allowed the
appeal and set aside the
judgment of the Court below. It
is against this decision that
the Plaintiffs have appealed to
this Court.
In its judgment, the Court of
Appeal relied religiously on the
BILL OF LADING [Exhibit "A"] and
the content thereof. Particular
reference was made to the words
“SHIPPER" "CONSIGNEE” and
"NOTIFY ADDRESS”. In the columns
where these words have been
inserted there was no problem
with the columns 'SHIPPER' and
'NOTIFY ADDRESS' as the Court
found clearly that CARGILL
INTERNATIONAL were the Shippers
and KAGUIN ENTERPRISES GHANA
LIMITED the persons to be
notified. In the “CONSIGNEE”
column however was the words "TO
ORDER". The Plaintiffs had
claimed that although their
names had not been inserted at
the column as the consignees, on
the evidence and the law, they
were consignees of the goods.
The trial Court acceded to this
claim but the Court of Appeal
held otherwise: It said Kaguin
[the Plaintiffs] were only to be
notified and that the goods were
to the order of Cargill
International. In other words
the goods were to go to whomever
Cargill International would
direct. Consequently, since the
Plaintiffs had not been
described as the consignees,
they could not claim any right
to the goods [the rice].
It should be noted that the Bill
of Lading [Exhibit “A”] was an
agreement between the Shipper
and the owner of the ship,
though reference was made of
other persons in the document.
In Chapter 1 of Paul Todd's book
on "CASES AND MATERIALS ON BILL
OF LADING", the author states:—
"A BILL OF LADING is a receipt
issued by a carrier. Thus the
transfer of a Bill of Lading,
transfers an important right in
relation to the goods and in
effect the transfer of the Bill
of Lading is equivalent to the
transfer of the goods themselves
and that its transfer, transfers
constructive possession of the
goods".
In the case of Sanders Brothers
v. Macleanco [1883] 11 Q.B.D.
327 [also in the Case Book on
'Shipping Law' by E.R. Hardy
Ivamy, 4th Edition] Bowen L.J
stressing the importance and
function of the Bill of Lading
as a document of title, states,
"A cargo at sea while in the
hand of the carrier is
necessarily incapable of
physical delivery. During this
period of transit and voyage,
the Bill of Lading by the Law
merchant is universally
recognised as its symbol and the
endorsement and delivery of the
Bill of Lading operates as a
symbolic delivery of the cargo.
Property of the goods passes by
such endorsement of the Bill of
Lading..... as under similar
circumstances the property would
pass by an actual delivery of
the goods. And for the purposes
of passing such property in the
goods and completing the tittle
of the endorsee to full
possession thereof, the Bill of
Lading until complete delivery
of the cargo has been made
onshore to someone rightly
claiming under it, remains in
force a symbol and carries with
it not full ownership of the
goods but also all rights
created by the contract of
carriage between the ship and
the shipowner. It is a key which
in the hand of a rightful owner
is intended to unlock the door
of the warehouse, floating or
fixed, in which the goods may
chance to be".
Paul Todd in his Book [supra]
explained the functions of the
specified persons set down in
the Bill of Lading thus,
“1. ‘SHIPPER’ i.e. the person
who shipped the goods and who is
normally the consigner'.
2. ‘CONSIGNEE' i.e. the person
to whom the goods are consigned,
[in other words the person
entitled to the goods].
3. 'NOTIFY ADDRESS' i.e. the
person who should be notified of
the arrival of the goods'."
And, Charley and Giles in their
book ‘Shipping Law’ 8th Edition
explained the purpose for these
categories on the Bill of Lading
at page 250-251 as follows:—
“In the Bill of Lading therefore
the carrier began to agree to
carry the goods, say to Antwerp
and there deliver them not only
(a) to the Shipper but
alternatively (b) to the
Shipper's order (as in the
instant case) so that the
Shipper could by endorsing on
the document can order that the
goods should be delivered to the
buyer to enable the latter to
get the goods himself or (c) to
a named consignee. These three
options, shared the common
feature that the Bill operated
as the document entitling
delivery only in favour of the
Shipper or the Shipper's buyer".
It is quite clear from the above
explanation that three
categories of persons may be
entitled to the delivery of the
goods, namely (1) the Shipper
himself (2) to the Shipper's
Order which include the person
for whom the Bill of Lading has
been endorsed or (3) a named
Consignee.
Amissah, J. [as he then was]
delivering his judgment in the
case C.I.L.E.V. v. Black Star
Line Limited and Anor. (1968)
G.L.R 485 at pages 485-486,
observed
"Where the person unto whom it
is stated in this part that the
goods are shipped differs from
the one given in the "notify
address". I cannot conceive the
name given in that notify
address being by any stretch of
the imagination described as the
Consignee. It is simple common
sense that the Consignee of
goods is the person to whom the
goods are sent and not
necessarily the address to be
notified of the arrival of the
goods at its predestined port.
All that the 'notify address'
means to me is that if the
address given is notified of the
arrival of the goods the person
to whom they are consigned or to
whom they ought to be delivered
will come forward to take
delivery of them. This person
may be the owner of the address.
But there is nothing preventing
him from being someone with whom
that owner may get in touch to
collect his goods waiting for
him at the harbour". (emphasis
supplied).
In the above observation, his
Lordship did not think that the
evidence on record was enough to
identify the 'notify addressee'
as the owner of the goods but he
did not rule out the possibility
that in certain situations, the
'notify address’ could be the
owner (i.e. the Consignee) of
the goods.
In the instant case, there was
no consignee on the Bill of
Lading, but there was abundant
evidence both documentary and by
conduct to show that the goods
were consigned to the
Plaintiffs. If the Plaintiffs
were only to be notified, then
there should be evidence of a
direction to them to get the
intended owner to be informed to
take delivery. As it turned out
it was the Plaintiffs who took
delivery of the goods. I shall
come back to this later.
In Chitty on 'Contracts', 27th
Edition Vol. 1 "General
Principles" at page 600
paragraphs 12-081, the Learned
Authors wrote as follows:—
"It is often said to be a rule
of law that if there be a
contract which has been reduced
into writing, verbal evidence is
not allowed to be given,,,, so
as to add to or subtract from,
or in any manner to vary or
qualify the written contract".
Indeed in 1897, Lord Morris
accepted that "parol testimony
cannot be received to
contradict, vary, add to or
subtract from the terms of a
written contract or the terms in
which the parties have
deliberately agreed to record
any part of their contract; this
rule is usually known as the
'parol evidence rule'. In
paragraphs 12-082 of 'Chitty on
Contracts' [referred to supra]
the Authors continued—
"However, the parol evidence
rule is and has long been
subject to a number of
exceptions. In particular, since
the nineteenth century, the
Courts have been prepared to
admit extrinsic evidence of
terms, additional to those
contained in the written
document if it is shown that the
document was not intended to
express the entire agreement
between the parties". (emphasis
supplied).
In Gillespie Bros. & Co. vs.
Chevey Eggar & Company Lord
Russel, C.J. stated—
“…. Although when the parties
arrive at a definite written
contract the implication or
presumption is very strong that
such contract is intended to
contain all the terms of their
bargain, it is a presumption
only, and it is open to either
of the parties to allege that
there was, in addition to what
appears in the written
agreement, an antecedent express
stipulation not intended by the
parties to be excluded but
intended to continue in force,
with the express written
agreement.
It cannot, therefore, be
asserted that, in modern times,
the mere production of a written
agreement, however complete it
may look, will as a matter of
law render inadmissible evidence
or other terms not included
expressly or by reference in the
document. The Court is entitled
to look at and should look at
all the evidence from start to
finish in order to see what the
bargain was what was struck
between the parties".
Perhaps it would not have been
necessary to refer to the above
observation, since the
Plaintiffs, apart from being
notified of the arrival of the
goods, were not parties to the
Bill of Lading. But since their
name appears on the Bill of
Lading as persons to be
notified, it is necessary to
look outside for evidence of
their connection to the Bill of
Lading. The Bill of Lading is an
agreement between only the
Shipper [the owner of the goods]
and the ship owner. It is a
receipt for goods delivered to
and received by a ship signed by
the person who contracts to
carry them and stating the terms
of the contract of carriage
under which the goods have been
so delivered and received. What
is contained in the Bill of
Lading may not contain all the
terms of the agreement between
the Plaintiffs and the owners of
the goods. In the instant case
great emphasis has been laid on
what the Bill of Lading says
without considering the
contractual relationship between
the Plaintiffs and the Shipper.
In other words the words of the
Bill of Lading are being
interpreted against Plaintiffs
when they were not parties to
that agreement. Could it be said
that the Plaintiffs were a mere
busy-body who were only to be
notified to pay for services,
clear the goods and warehouse
them without any interest
whatsoever in the goods even
though they have been found to
be the importers of the goods?
It is also said that there was
an agreement between the
Defendants and Cargill
International for the disposal
of the goods. I shall presently
comment on this so-called
agreement. Suffice it to say
that in this agreement the
Plaintiffs were not parties and
in fact were not aware of it.
The agreement was undated! If in
fact, there existed such an
agreement, why would the
Defendants ask the Plaintiffs to
pay for their services in
clearing or warehousing the
goods? Why should the Plaintiffs
as importers be kept in the dark
about this agreement? To do
justice in the case it is
necessary that all these issues
be resolved. It is necessary
that the totality of the
evidence be looked at
critically. That is why
extrinsic evidence is necessary
to explain and/or add to the
Statements in the Bill of
Lading.
Exhibit "B", the Invoice issued
to the Plaintiffs, is the
document which gives an idea of
the contractual relationship
between the Plaintiffs and
Cargill International in
connection with the goods [rice]
which were shipped to Ghana.
This document is dated JUNE 15TH
1989.
It states—
"OUR SALE DATED JUNE 12th 1989
COVERING 4.650 METRIC TONS, 10
PERCENT MORE OR LESS OF US NO.
5/20 LONG GRAIN MILLED RICE IN
50 KILOS POLY PROPYLENE BAGS
M.V. OCEAN VOICE B/L 07/10/89".
The Bill of Lading contained the
same description and quantity of
rice as contained in the Invoice
[Exhibit "B"]. The goods were
shipped on M.V. OCEAN VOICE. The
'B/L' on the Invoice is the
abbreviated form of "Bill of
Lading" which was to accompany
the shipment. The date on the
Invoice is identical with the
date on the original Bill of
Lading which followed the
shipment of the goods. This was
a ‘CIF’ [Cost, Insurance and
Freight] contract which stated
the full amount [inclusive of
the cost, insurance and freight]
which was due to the Shipper on
the delivery of the goods. This
Invoice was duly signed by
Cargill International, the
original owners of the goods and
as the Shippers. This was part
of the documents handed over to
the Plaintiffs when the goods
arrived to enable them take
delivery of the goods.
In considering the nature of the
contract and the contractual
relationship between the
parties, it is necessary not to
look only at the Bill of Lading,
but also at all the documents
given to the Plaintiffs,
together with the conduct of the
parties, to identify who in fact
are the consignees of the goods.
The general principle of law is
that—
"Any document in existence when
a contract is executed and
sufficiently described to enable
it to be identified may be
incorporated with the contract,
may be referred to for the
purpose of construction whether
incorporated in the contract or
not. It has been said that the
document must not only be in
fact in existence when the
contract is made, but also it
must be described as existing.
It follows that if the contract
refers to the document to be
incorporated, parol evidence is
admissible to enable the
document to be identified, but
parol evidence is not admissible
to prove that the document was
in existence at the date of the
document”.
(see Van Stranbenze vs. Mark
[1862] 3 SW and T6; Allen vs.
Maddock (1858) 11 MOV. P.C.
427).
In Ghana, like any other
sovereign State, exportation and
importation of goods are
governed by Statute Law. One
does not just get up, collect a
quantity of goods and import the
goods to another country and
start selling them to the
people. The law governing
exportation and importation of
goods in Ghana is contained in
the Export and Import Act, 1995
[Act 503] Section 7 of this Act
states:—
“(1) Any person may import goods
into Ghana for commercial
purposes if that person
completes an Import Declaration
Form.
(2) An importer shall submit one
copy of the completed Import
Declaration Form—
(a) to the Inspector appointed
under this Act before shipment;
and
(b) to the Commissioner and any
other agency which may be
specified on the form after
shipment.
(3) No Importer shall be
permitted to take delivery of
any Commercial import unless he
has complied with Sub-Section
(2) of this Section”.
It follows then that without
compliance with the Statute,
Cargill International could not
import rice into the country and
direct Umarco (Ghana) Limited
(the Defendants in this case) to
sell when the latter were not
the importers. As was found by
the Court below, the only person
who could be described as the
‘Importer’ legitimately is the
Plaintiff/Company. It cannot be
true therefore that Cargill
International could import goods
[rice] to this country and have
them sold in accordance with
their 'Order' without specified
or named importer who is
qualified to take delivery of
the goods and sell them in
Ghana.
The so-called agreement between
Cargill International and Umarco
(Ghana) Limited [the Defendants]
is false and designed to defeat
the ends of justice. It was
undated. Definitely it was made
after the impasse between Sane
and Diawusie, the shareholders
in the Plaintiff/Company. There
was evidence that Mr. Sane had
been working with Cargill
International in the importation
and sale of rice. It is
therefore not true that Cargill
International at the time it
sent the rice in dispute wanted
them to start trading in rice
importation in Ghana as the said
agreement purported to say.
According to Mr. Diawusie [the
Plaintiffs' Representative] who
testified on behalf of the
Plaintiffs, he as well as Mr.
Sane took part in the
negotiations which culminated in
the sending of the rice to
Ghana. Under cross-examination,
this is what the Plaintiffs'
Representative said,
“…. I know about the
negotiations which led to the
importation of the rice. The
negotiation was between Cargill
and Kaguin Enterprise.
Yes, I took part in the
negotiation. The terms of the
negotiation — Cargill was to
send the rice to Kaguin in Ghana
who will sell, and thereafter
pay Cargill". (emphasis
supplied).
There was no challenge to this
vital piece of evidence. Of
course Cargill International
itself never gave evidence of
the terms of this agreement.
This agreement was prior in time
to the so-called agreement
between Cargill International
and Umarco [Ghana] Limited [the
Defendants].
I should have thought that
having authorised the Defendants
to sell the rice, Cargill
International would have joined
in the action or testified in
contradiction of the alleged
terms of the negotiated
agreement as given in evidence
by the Plaintiffs’
representative and, also
explained how Exhibit “B” [the
Invoice] which was prepared and
signed by Cargill International
came into existence and why the
Plaintiffs which were to be
notified only of the arrival of
the goods came by Exhibit “B”
and were also made responsible
for the customs clearance,
stevedoring, clearing and
warehousing expenses of the
goods. Thus even though the Bill
of Lading did not state on the
face of it that the Plaintiffs
were the consignees of the
goods, the preponderance of the
evidence supported the
Plaintiffs claim that they were
the consignees or owners of the
goods imported. The evidence
overwhelming shows that all the
relevant documents necessary for
taking delivery of the good were
sent to the Plaintiffs. These
included:—
(i) The Bill of Lading which was
endorsed to them. [Exhibit “A”].
(ii) The Invoice [Exhibit “B’]
(iii) The phyto-sanitary
certificate [Exhibit “C”] which
came from the place of shipment
of the goods and which described
the Plaintiffs as the
consignees; (obviously an
information which had been given
to the authorities by the
Shippers [Cargill
International].)
(iv) The Clean Report of
Findings [Exhibit “D”] and
(v) The Notice of Readiness
[Exhibit “I”].
In his evidence for the
Defendants, Mr. Max Palliades
[D.W.2] the Managing Director of
the Defendant/Company at the
relevant period stated among
others—
(i) “… I know one Edward Henry
Sani. I knew him as Managing
Director of the
Plaintiff/Company in respect of
rice consignment. He was sent by
Cargill International to meet me
at Umarco..."
(ii) “... I did submit to NIC
Invoices and 6 Bills of Lading
already indorsed to Kaguin",
(iii) “… The Plaintiffs paid
some amount to Umarco.
(iv) “… Yes. Umarco are Clearing
Agents. Yes in this case we
cleared the goods for the
Plaintiffs”.
(v) “… Plaintiffs are supposed
to pay Cargill International”.
(emphasis supplied).
The fact that the Defendants
acted only as Clearing Agents
for the Plaintiffs was borne by
our Exhibit "G" and "H". Exhibit
“G” states:—
"This to note, that we the
attending representatives of
Receivers Kaguin have received
from the Master of M.V. Ocean
voice. Copies of Notice of
Readiness to Discharge at Port
of Tema".
Exhibit “H” is the Notice of
Readiness given by the carrier
vessel Ocean Voice to the
Shippers Receivers i.e. Kaguin
Enterprises Limited [the
Plaintiffs] advising them of the
Captain's readiness to discharge
the rice. In other words, the
Captain was ready to fulfil the
obligation imposed by the
contract. It must be noted that
at that time, according to Mr.
Max Palliades [D.W.2] he had
endorsed the Bill of Lading in a
set of six [6] including the
original [Exhibit “A”] to the
Plaintiffs.
In Bloxam vs. Sanders [1825] B &
C 941 at 948, Bayley, J. said:—
“... where goods are sold ...
and nothing is said to the time
of delivery or the time of
payment ... seller is liable to
deliver them whenever they are
demanded upon payment of the
price; but the buyer has no
right to have possession of the
goods till he pays price. If the
goods are sold upon credit [as
in this case] and nothing is
agreed upon as to the time of
delivery of the goods, the
Vendee is immediately entitled
to the possession, and the right
of possession and the right of
property vests at once in him".
The only evidence of the
contractual relationship between
the Plaintiffs and Cargill
International, apart from
Exhibit "B" [the Invoice] was
given by the Plaintiffs'
representative, Mr. Diawuasie.
He said:—
“The terms of the
negotiation—Cargill was to send
the rice to Kaguin in Ghana who
will sell and thereafter pay
Cargill”.
As stated before, this piece of
evidence was not challenged;
this was confirmed by Mr. Max
Paillades, the Defendants'
Managing Director who said,
"Kaguin was to pay Cargill
International". There is no
evidence that the price was
demanded of the Plaintiffs
before the Bill of Lading was
endorsed to them. It has been
argued that since the Plaintiffs
had not paid for the rice, they
could not demand the release of
the rice to them. If it is
established that the property in
the goods had passed to the
Plaintiffs, it would not be a
proper duty of the Court to deny
the Plaintiffs their claim to
the goods. The remedy of the
seller would be as set down
under the Sale of Goods Act. The
Plaintiffs gave evidence of the
terms of the contract with
Cargill International; they were
“to sell the rice and pay
Cargill International”. The
Court is precluded from
presuming an intention to “pay
before delivery”. A principle of
construction has it that, it is
not the function of the Court to
ascertain what the parties have
intended outside the specific
terms of their agreement. It is
not permissible to guess at the
intention of the parties and
substitute the presumed for the
expressed intention. And even if
the goods had been transferred
on a condition requiring a
confirmed credit, the waiver of
that condition by delivery of
the Bill of Lading to the buyer,
the seller may not later rely on
the buyer's failure to comply
with the condition unless he has
given reasonable notice that he
requires compliance — see
Plastimoda Societa per Azioni
vs. Davidsons (Manchester)
Limited (1952) 1 Lloyds Ref. 527
C.A.
The Bill of Lading Act, 1961
[Act 421] Section 7 provides:—
"(1) Every consignee of goods
named in a Bill of Lading and
every endorsee of a Bill of
Lading to whom the property in
the goods therein mentioned
passed under the contract in
pursuance of which the
endorsement was made, shall have
transferred to and vested in him
all rights and be subject to the
same liabilities in respect of
the goods as if the contract
expressed in the Bill of Lading
had been made with himself.
(2) Nothing in this Section
shall prejudice or affect any
right of stoppage in transit or
any right to claim freight
against the original shipper or
owner, or any liability of the
consignee or endorsee or of his
receipt of the goods by reason
or in consequence of the
consignment or endorsement".
(emphasis supplied)
The Bill of Lading is the most
important document recognised by
the law merchant, as the symbol
of the goods described in it.
The person who holds it as a
consignee or endorsee for
business purposes is in a good
position as if the goods were
actually in his possession.
The Bill of Lading [Exhibit A"]
on its face states that it is a
C.I.F. contract i.e. Costs,
Insurance and Freight. Under
C.I.F. contract the duty of the
seller so far as physical
handling over of the goods
themselves is concerned is
accomplished when the goods are
put on board the ship or other
specified place or vehicle for
the purpose of the transit, but
in addition he is under an
obligation to make contract of
affreightment with the carrier
under which the goods will be
taken to the contractual
destination and there to effect
an insurance available for the
buyer and to forward the Bill of
Lading, policy of insurance and
invoice to the buyer. The
contract thus in a commercial
sense is an agreement for the
sale of goods to be performed by
delivery of documents; its
salient characteristic in law
being that the property in the
goods not only may but must also
pass by delivery of the
documents against which payment
is made. Against tender of these
documents the buyer's liability
to pay the price arises.
Section 61 of the Sale of Goods
Act, 1962 [Act 137] provides,
among others, the following:—
“61. In a CIF contract, unless a
contrary intention appears—
(a) The seller is bound at his
own expense, to ship the goods
during the agreed period, if
any, to the port agreed upon or
to acquire goods afloat which
have been shipped;
(b) The seller is bound, at his
own expense, to effect on the
goods an insurance of the type
normal for goods and a voyage of
the kind in question;
(c) The seller is bound to
transfer to the buyer proper
shipping documents in accordance
with the terms of the contract;
(d) The buyer is bound to take
up proper shipping documents
and, on doing so, to pay the
price in accordance with the
terms of the contract;
(e) The goods are deemed to be
delivered to the buyer, and the
property therein accordingly,
passes to the buyer, on the
transfer to him of the Bills of
Lading.
(f) The risk in the goods passes
to the buyer when they are
shipped or acquired afloat".
The evidence shows
overwhelmingly that all the
relevant documents were handed
over to the Plaintiffs. On the
Defendant's own evidence,
through Max Palliades, when the
goods arrived he endorsed the
Bill of Lading, six in number
including Exhibit "A" to the
Plaintiffs who engaged the
Defendants as clearing and
warehousing agents; the
Defendants were paid. Thus, on
the evidence as I have tried to
establish, the Plaintiffs were
consignees and even if this is
not acceptable they were
endorsees of the Bill of Lading.
The property in the goods under
the Sale of Goods Act, 1962 [Act
137] passed to them. And even if
subsequently other copies of the
Bill of Lading were issued to
some other persons, the first
endorsement not only of a part
of the goods but all the goods
as contained in the Bill of
Lading, vested in them the
property in the goods; all other
endorsements were unenforceable.
In Charles Barber and Ors. vs.
William Meyerstein [1970] L.R. 4
HL 317 it was held inter alia—
"The person who first gets the
Bill of Lading [though only one
of a set of three] gets the
property which it represents, he
need not do any act to assert
his title, which the transfer of
the Bill of Lading of itself
renders complete, and any
subsequent dealings with the
others of the set are
subordinate to the rights passed
by that one".
It has not been shown that the
Plaintiffs used fraud or some
tricks to obtain the Bill of
Lading. In fact the evidence
shows that they were duly
informed of the shipment of the
goods, and their arrival at the
harbour and, all documents in
respect of the goods, including
the Bill of Lading were handed
over to them. The Bill of Lading
was endorsed to them and they in
pursuance thereof took the
necessary steps to get the goods
evacuated from the ship, cleared
and warehoused at their own
expense. What else were they
supposed to do to show that they
were the owners of the goods?
The Defendants were paid for
their services. This was
admitted by Mr. Max Palliades
[D.W.2], the Managing Director
of the Defendant/Company. The
Defendants were therefore only
clearing and warehousing agents.
Their relationship with the
Plaintiffs was in the form of
bailment for consideration i.e.
hire of custody [locatio
custodiae]. There was a contract
of custody for reward for
services. As custodians they
were to deal with the goods in
the manner authorised by the
bailor [the Plaintiff]; they
could not without authority hand
the goods over to a third party.
If they deal with the goods in a
manner not authorised, they take
the risk of so doing. An agent
is bound not to act contrary to
the principal's instructions.
This is the dictum in Barber vs.
Taylor 1 M&M 526 [see also The
Hermoine [1922] PD 162.
In Chitty on Contracts [Specific
Contracts] vol. 11 [2412
Edition] [Sweet & Maxwell] para.
2095 page 51, the authors state—
“If the agency contract is for
consideration the agent must do
what he has undertaken to do; he
must, in performance of his
duties, carry out any express
instructions given him by his
principal even though he may
reasonably believe that in
departing from them he would be
promoting his principal’s
interest". [see also Barber vs.
Taylor (supra)].
The learned authors continued—
“An agent must not, without
first obtaining the informed
consent of his principal, put
himself in a position when his
duty to the principal is likely
to conflict with his own
interest, or the interest of
another principal".
And, in the case of Fullwood vs.
Hurley [1928] 1 K.B. 498 at page
502, Lord Hanworth MR said—
“... if, and so long as the
agent is the agent of the party,
he cannot engage to become the
agent of another principal
without the leave of the first
principal with whom he has
originally established his
agency".
As I have said elsewhere in my
opinion, it is not true that the
shipment of the instant rice was
the first business that Cargill
International was starting in
the country. According to Mr.
Palliades [D.W.2], Cargill
International has been doing
business with the Defendants.
In fact D.W.2 once worked for
Cargill International.
The agreement purported to have
been made between Cargill
International and Umarco
[Defendants] trying to show that
Cargill International was then
trying to start business in
Ghana could not have been made
before the importation of the
rice. Besides, if indeed it had
existed, Cargill International
and for that matter the
Defendants would not have placed
the responsibility of
off-loading on the Plaintiffs
and it would not have been
necessary for the Defendants to
charge the Plaintiffs for
clearing and warehousing. Why
were the Plaintiffs to be
notified only? According to
Chairman of N.I.C. [D.W.3],
N.I.C. by its letter of 11th
April, 1990 informed Umarco [the
Defendants] to get in touch with
Cargill International to direct
what was to be done with the
remaining quantity of rice! It
is quite clear from the evidence
that the alleged agreement was
an after-thought, false and
deliberately designed with the
sole aim of over-reaching the
interest of the Plaintiffs.
The National Investigations
Committee Law, 1982 [P.N.D.C.L.
2] provided inter alia, power to
the Committee to investigate,
"(a) allegations of corruption,
dishonesty, or abuse of office
for private profit against any
person or group of persons who
held high office in Ghana, or
may be shown to have acted in
collaboration with any such
person holding a high office of
State or any public office in
respect of any of the foregoing
acts;
(b) allegations of breaches by
any person or group of persons
of mandatory provisions of any
Constitution or Proclamation
under which Ghana has been
governed while the said
Constitution or Proclamation was
in force;
(c) allegations of breaches of
statutes or other laws whereby
damage was caused to the
national interest;
(d) any person who may have
wilfully and corruptly acted in
such a manner as to cause
financial loss or damage to the
State, or who may have directly
or indirectly acquired financial
or material gain fraudulently or
illegally to the detriment of
the State;
(e) any other acts or
commissions which may be shown
to be detrimental to the economy
of Ghana or to the welfare of
the sovereign people of Ghana or
in any other way to the national
interest;
(f) any other matters which may
be referred to it by the Council
for investigation."
(vide Section 3 of P.N.D.C.L.2)
A critical look at the powers of
the N.I.C. would show that if at
all, the only matters it could
have investigated in the instant
case fell under paragraphs (b)
and (c) of Section 3. The Ghana
Investment Promotion Centre
itself had not referred to
anything to the Committee
[N.I.C.] though it claimed Sani,
one of the Shareholders in the
Plaintiff/Company was a
foreigner and had not satisfied
the conditions which would
enable him do business in Ghana.
Therefore there could not have
been an allegation of breaches
of mandatory provisions of the
Constitution or Proclamation to
enable N.I.C. investigate under
para.[b]. The matter brought
before N.I.C. was a personal
matter between Mr. Diawusie and
Mr. Sani Shareholders in the
Plaintiff/Company where Mr.
Diawusie accused Mr. Sani of
cheating him in their business.
D.O. Lamptey [D.W.3] the
Chairman of N.I.C. said—
"Yes, I agree that Exhibit 21
should be confined to the fact
that a foreign national was
carrying on business in this
country". (emphasis supplied).
It was not the business of
N.I.C. therefore to pronounce on
the ownership of the rice in
dispute. Besides, it was
required that the N.I.C. report
periodically to the Provisional
National Defence Council for the
appropriate action. [see Section
12 of P.N.D.C.L. 2]. Further,
Section 11 of P.N.D.C.L. 2
states:—
“11. Where the Committee is
satisfied from its
investigations that there exists
evidence which may be put before
a Court, Public Tribunal or
other judicial body, it shall
refer such evidence to the
Attorney-General Public
Prosecutor or to any other
appropriate body for further
steps, including a trial, to be
taken in the matter".
Of course, since Mr. Sani, an
alien, failed to satisfy the
provisions of the Ghana
Investment Promotion Centre Law,
he could not continue as the
Managing Director of Kaguin [the
Plaintiff/Company]. The Bank was
entitled lawfully to withdraw
its security. This left Mr. Sani
as a Managing Director who could
do no business. This situation
however did not take away the
rights vested in Kaguin [the
Plaintiffs] in so far as their
contractual relationship with
Cargill International in the
importation of the rice was
concerned.
A distinguishing characteristic
of a company limited by shares
such as the Plaintiff/Company is
that once the formalities of the
Act [the Companies Code] have
been complied with the
registered company exists as a
legal entity distinct in law
from those persons who from time
to time are members — see Salmon
vs. Salmon & Company Limited
[1897] H.L. A.C. 22. Even though
it was Sani and Diawusie who
negotiated for the rice in
dispute, they did so for Kaguin
& Company Limited. So, whatever
contract there was, was between
Kaguin and Cargill
International. The fact that
Mr. Diawusie complained against
Sani did not affect the stand of
Kaguin in the contract with
Cargill International. By going
outside the matter, which was
reported to it, and issuing a
report (which required some
security from Sani) and the
Ghana Investment, which required
that Sani, a foreigner satisfy
the Statutory requirement before
doing business. The report
generated a lot of
correspondence among the
above-named authorities. In that
confused state of affairs,
Cargill International and its
associates decided to find a
means of disposing of the
imported rice. Since the rice
was already with Umarco [the
Defendants] for warehousing and
there was an already existing
relationship between Umarco and
Cargill International, Cargill
International decided to let
Umarco have the rice as its
agent for purpose of selling
them. They subsequently
contracted with SAGA GHANA
LIMITED [which was formerly
UMARCO GHANA LIMITED] to have
the rice sold apparently, in
pursuance of a Court Order.
Under those circumstances,
Cargill International pretended
as if it had a previous
agreement with Umarco to dispose
of the rice in accordance with
the former's order. I have
already commented on the
so-called agreement: It was a
fraudulent device!!
Even though the Bill of Lading
did not show that the rice had
been consigned to the Plaintiff
but 'TO ORDER' the evidence
shows that there could have been
no other consignee apart from
the Plaintiffs to whom the Bill
of Lading was endorsed and which
in fact carried out their part
of the agreement as contained in
the Invoice sent them, by paying
for the services required for
unloading the rice and
warehousing it at the warehouse
of the Defendants. By the
authorities referred to in this
my opinion the property in the
goods became vested in the
Plaintiffs when all the relevant
papers were handed over to them
and they took delivery of the
goods. The property in the goods
having thus passed, Cargill
International could only pursue
their rights under the Sale of
Goods Act, 1962 [Act 137],
Section 44 of which states:—
"44. Subject to the provisions
of this Act, and subject to any
contrary intention an unpaid
seller may recover possession of
the goods from the buyer after
they have delivered to him if—
(a) the property has not passed
to the buyer; or
(b) the property has passed to
the buyer but the contract
expressly confers a right on the
seller to recover possession and
the buyer fails to pay the price
in accordance with the terms of
the contract, but not
otherwise". (emphasis supplied)
The only terms of the contract
was supplied by the Plaintiffs'
representative in Court. It was
that the rice was to be sold and
paid for later. There was no
other evidence. The seller was
therefore not entitled to
recover possession of the goods.
An unpaid seller may also resell
the goods in certain situations
– vide Section 45 of Act 137;
and he may sue for the price of
the goods — vide Section 46 of
Act 137.
The property in the goods vested
in the Plaintiffs as soon as
they took delivery of them. The
Defendant had possession but
only as bailees. As bailees for
consideration, they were not
entitled to release or hand over
the goods to any other person
except the bailor (the
Plaintiffs). The refusal to
release the rice to the
Plaintiffs on demand and the
handing over of the goods to
Cargill International amounted
to conversion; the Plaintiffs
were entitled to recover damages
for conversion.
The judgment of the High Court
was therefore amply supported by
the evidence and the law. The
Court of Appeal was wrong in
setting that judgment aside. I
would allow the Appeal and set
aside the judgment of the Court
of Appeal and restore the
judgment of the High Court.
ADJABENG, J.S.C:
The action in this case by the
Plaintiffs/Respondents/Appellants
herein which has culminated in
the appeal presently before us
is, to me, uncalled for. I must
say that in my view it is not
only a frivolous action, but it
is also an attempt to dupe the
owners of the goods involved.
That is, Cargill International
S.A. Antigua. For, how else can
one explain the conduct of the
Appellants when they have failed
up to today to pay for the seven
hundred metric tonnes of rice
released to them? That is
fourteen (14) thousand bags of
rice, according to the
Appellants' representative in
his evidence under
cross-examination.
And even though the Appellants
failed to pay for this huge
quantity of rice which they had
sold, they took this action
claiming the whole consignment
of 4,659.014 metric tonnes of
the rice. The reliefs claimed by
them are as follows:—
“1. A declaration that the
Plaintiff is the owner/consignee
of 4,659.014 metric tonnes of
rice imported from Cargill
International S.A. Antigua in or
about July 1989.
2. An order upon the Defendant
to account to the Plaintiff for
the 4,659.014 metric tonnes of
rice or any portion or part of
the said consignment disposed of
by the Defendant.
3. Another order upon the
Defendant to pay general damages
for conversion."
What is the basis of the
Appellants' claim? In paragraph
3 of their statement of claim,
the Appellants aver that they
imported the said consignment of
rice from Cargill. In their
paragraph 6, the Appellants aver
that they ordered the said rice.
The most significant averment in
the Appellants' statement of
claim, however, is in paragraph
5 thereof. There they aver as
follows:—
"The Defendants were shipping
agents, and were in receipt of
the Bill of Lading, which stated
that the Plaintiff was the party
to be notified of the arrival of
the rice, and the consignee of
the said goods was 'TO ORDER'."
According to the Appellants in
their statement of claim, when
the rice arrived, the
Defendants/Appellants/Respondents
herein released to them only
“14,000 bags of rice weighing
700 metric tonnes”.
The Appellants aver that the
Respondents refused to release
the remainder of the rice to
them and purported "to act upon
an agreement between them, [the
Respondents] and Cargill
International S.A. Antigua with
its offices in Geneva" which
agreement the Appellants
considered illegal.
The
Defendants/Appellants/Respondents'
answer to the Appellants' claim
is amply stated in their
statement of defence, especially
paragraphs 2 to 7. There they
aver as follows:—
“2. The Defendant ... says that
the said rice described in the
said paragraphs were imported by
Cargill International S.A.
Antigua Geneva Branch as
manifested in the bill of lading
when it stated in the column of
consignee 'TO ORDER' but
requesting that the Plaintiff be
notified of the importation of
the rice and thus caused the
Plaintiff’s name to be inserted
in the notifying column of the
Bill of Lading.
3. The Defendant says that the
declarations on the Bill of
Lading dated 10th July 1989,
which covered the importation of
the rice, indicated that there
was no consignee. That the
shipper will inform the agent
later on whom the rice should be
delivered to by stating in the
column reserved for consignee
'TO ORDER'.
4. The Defendant says that it is
usual for shippers to protect
themselves when a consignment
has not been paid for, as was
the case in this shipment, to
hold on to the commodity and
allow it to remain their
property by inserting in
consignee column 'TO ORDER' as
was done in this shipment's Bill
of Lading of 10/7/89.
5. The Defendant says that
Cargill International S.A.
Antigua, Geneva Branch remained
owner of the rice throughout.
6. The Defendant denies
paragraph 6 of the statement of
claim and says that whether or
not the Plaintiff ordered the
whole consignment of rice is
neither here nor there. The
important issue is whether it
paid for it and all the other
incidental expenses to enable
Cargill International S.A.
Antigua Geneva Branch the owner
of the rice to deliver it to it.
7. In answer to paragraph 7 of
the statement of claim the
Defendant says that the 14,000
bags of rice released to the
Plaintiff was all that Cargill
International S.A. Antigua
Geneva Branch authorised the
Defendant to release to the
Plaintiff under the Agreement
between Cargill International
S.A. Antigua Geneva Branch and
Saga acting for and on behalf of
Umarco (Ghana) Limited, and
acting as Umarco's true and
lawful attorney. The Plaintiff
was not entitled to anything
else and the Defendant could not
give it anything more than the
owner had instructed."
From the Plaintiffs/Appellants'
own statement of claim, and the
explanation given in the
Respondents' statement of
defence, as quoted above, it is
clear that the Appellants'
action was doomed to failure. In
paragraph 5 of their statement
claim, quoted above, the
Appellants admit that the bill
of lading in respect of the rice
imported, which bill, in
shipping law and practice, is
the document of title to the
goods shipped, was not sent to
them, the Appellants, but to the
Respondents who are shipping
agents and warehousing
operators. Secondly, in the said
bill of lading, according to the
Plaintiffs' said paragraph 5,
the Plaintiffs were not stated
as the consignees of the goods
but only as the "party to be
notified of the arrival of the
rice….” And, more importantly,
according to the said paragraph
5, the consignee of the rice was
stated to be "TO ORDER". What
does this term "to order" mean?
Simply, this means that the rice
shipped was still under the
control of the owners and
shippers thereof, namely,
Cargill International, to be
delivered to whomsoever they
would instruct the holders of
the bill of lading to deliver.
In this case, the owners of the
goods sent the bill of lading to
the Respondents herein and
instructed them to store the
rice in their warehouse. They
were also to deliver seven
hundred tonnes thereof (that is,
14,000 bags) to the Appellants
herein who were to pay for it
and also pay all the incidental
expenses made in respect of the
said quantity of rice. The
evidence also shows that the
owners of the rice, Cargill
International, instructed the
Respondents to deliver to the
Appellants another consignment
of the same quantity whenever
they had fully paid for the
first consignment released to
them.
It is surprising that even
though the Plaintiffs/Appellants
clearly admitted in the said
paragraph 5 of their statement
of claim that they were not
mentioned as the consignees of
the rice in the bill of lading
(their exhibit "A"), they
contradicted this in their
evidence. In his evidence under
cross-examination at the trial,
the Appellants' representative
said categorically that "By
Exhibit "A" I am the
consignee". This contradicts
not only the said paragraph 5 of
the Appellants' statement of
claim, but also the bill of
lading, Exhibit "A", tendered in
evidence by the Appellants. Yet
the trial High Court ignored
this serious contradiction in
the Appellants' case and gave
judgment for them.
On appeal to the Court of
Appeal, the appellate Court
rightly reversed the trial High
Court's decision. In a clear,
sound and comprehensive judgment
delivered by the Court of
Appeal, the Court, per Foster,
J.A. (as he then was), of
blessed memory, stated, inter
alia, as follows:—
"The trial judge purported to
rely on C.I.L.E.V. vrs. BLACK
STARLINE LTD. (1968) GLR 485,
C.A. BUT in that case Amissah,
J.A. (as he then was) said at
pp. 485 - 486:
'where a person unto whom it is
stated in this part that the
goods are shipped differs from
the one given in the 'notify
address', I cannot conceive the
name given in that notify
address being by any stretch of
imagination described as the
consignee. It is simple common
sense that the consignee of the
goods is the person to whom the
goods are sent and not
necessarily the address to be
notified of the arrival of the
goods at the predestined port.'
Thus, in the instant case the
notify address cannot be
comprehended as the consignee,
for if indeed the shipper
Cargill had intended the
Respondents (Appellants herein)
as the 'consignee’ their name
would have been inserted in that
space reserved for that
designation and not 'notify
address'. In the Bill of Lading,
the rice was consigned 'To
Order'. That means delivery to
any particular person as may be
determined or ordered by the
shipper. In the Black Star Line
Ltd. case, cited infra, Amissah,
J.A., having considered some
English cases; observed at page
487: 'I do not think that these
authorities support the
proposition that where goods are
shipped under a bill of lading
which expressly says that the
carriers must deliver to the
order of the shippers, just
because on previous occasions
the shipper had ordered that the
goods be delivered to a
particular person, so the
carrier must deliver to that
same person even though this
time the shipper orders that
they be delivered to another...
I do not therefore agree that
the course of business entitles
the Defendants, as carriers, to
predetermine the consignees of
goods which according to the
bill of lading are to be
delivered unto order and no
more'. Although in the above
passage it was the carrier whose
act of delivering the goods to
the person who had not been
named as a consignee that was in
issue, it seems to me
nonetheless that the above
extract of Amissah's judgment is
equally applicable here. In the
instant case the trial judge
ignored the purport of 'TO
ORDER' of the shipper and sought
to equate the person named in
the 'notify address' with the
consignee. It was entirely for
Cargill the shippers, to have
specified the consignee but they
opted to reserve to themselves
their right to order the
delivery of the rice to any
person whom they might name.' "
The Court of Appeal also relied
on the English case of Arnhold
Karberg & Co. vrs. Blythe,
Green, Jourdain & Co. (1915) 2
KB 379 at p. 387, where Scrutton
J. (as he then was) stated the
principle as follows:—
"Where the seller by taking the
bills of lading in his name or
to his order has reserved the
jus disponendi or power of
dealing with the goods, the
property does not pass on
shipment, but it is vested in
the vendor until he receives
payment from the buyer in
exchange for the documents of
title. If the seller has taken
the bill of lading in the
purchaser's name, but retains it
as security to her price, the
property appears to vest on the
buyer's tendering the price."
Also in their judgment, the
Court of Appeal explained that:
"Cargill's failure to send any
Bills of Lading to the
Respondents [the Appellants
herein] and their substitution
of 'To Order' in place of a
named consignee, were of course
deliberate, as the evidence
showed."
According to the judgment, the
purpose was the protection of
their financial interest; that
is, to ensure that the goods
were paid for.
In respect of the other
documents the Appellants
tendered in evidence in support
of their case, the Court of
Appeal had this to say:—
"The Respondents tendered
documents in support of their
claim that they were the
consignees. These were: Invoice
from Cargill (Exh.B);
Phytosanitary Certificate
(Exh.C) and S.G.S. Clean Report
of Findings (Exh.D). The
documents do not prove the
Respondents’ title to the goods.
They are no substitute for a
title document. They advance the
claim no further from where it
has been left marooned by the
available evidence."
It is against this decision that
the
Plaintiffs/Respondents/Appellants
have appealed to this Court on
the grounds that the judgment is
against the weight of evidence,
and also that the costs awarded
are excessive. In paragraph 17
of the statement of case filed
on behalf of the Appellants, it
is stated as follows:—
"Nature and effect of a Bill of
Lading of goods.
Another point the subject matter
of this appeal is the question
about the legal nature and
effect of a Bill of Lading of
goods. The Court of Appeal
relied on the case of Arnhold
Karberg & Co. vrs. Blythe,
Green, Jourdain & Co. ... (see
supra).
It is submitted that this case
does not apply to the issues
involved in the present case.
The seller Cargill by the bill
of lading did not take the bills
of lading in his name or to his
order. In this case the bill of
lading was made to the order of
the consignee not to the
consignor or shipper."
In answer, the Respondents
herein, in their statement of
case, submitted, rightly in my
view, that
"the main ground of appeal that
the judgment is against the
weight of evidence, is wholly
misconceived and frivolous, as
the inferences drawn by the
Court of Appeal in its judgment
are supported by oral and
documentary evidence in the two
volumes of the record of appeal.
There are serious misdirections
and wrong inferences made by the
learned trial judge from the
oral and documentary evidence on
the record of appeal."
Indeed, the Appellants' appeal
on the sole ground that the
Court of Appeal's decision is
against the weight of the
evidence adduced at the trial is
not only misconceived; it is
also very frivolous. And it is
most unfortunate for the
Appellants and or their Counsel
to state in their statement of
case that “The seller Cargill,
by the bill of lading did not
take the bills of lading in his
name or to his order.”
And that
“in his case the bill of lading
was made to the order of the
consignee not to the consignor
or shipper.” (emphasis mine)
It is unfortunate because the
above submissions clearly
contradict paragraph 5 of the
Appellants' statement of claim,
quoted earlier, and their
exhibit "A”, the bill of lading,
where it is stated that the
goods were made “to order”; that
is, to the order of the
consignor or the shipper. In the
circumstances, if any judgment
was against the weight of the
evidence, it was the judgment of
the trial High Court, and not
that of the Court of Appeal. As
I have indicated earlier,
therefore, having regard to the
averment in paragraph 5 of the
statement of claim, and the
evidence in the bill of lading,
exhibit “A”, the Appellants’
action was doomed to failure
from the very beginning.
In the circumstances, I have no
hesitation at all in saying
without more that I find the
decision of the Court of Appeal
unassailable. Having regard to
the evidence and the law
applicable, I find the judgment
to be sound and ought not to be
disturbed. The appeal must
accordingly fail.
ACQUAH J.S.C:
This is an appeal against the
unanimous judgment of the Court
of Appeal which reversed that of
the trial High Court in a suit
wherein the plaintiff, Kaguin
Enterprise (Gh) Ltd. claimed
ownership of a consignment of
4,659.014 metric tonnes of rice
brought into this country by
Cargill International S.A.
Antigua in July 1989. The High
Court gave judgment for the
plaintiff but the Court of
Appeal set aside this judgment.
The sole ground of appeal
levelled against the Court of
Appeal's judgment is that it is
against the weight of evidence.
Thus in the
plaintiff/appellant's notice of
appeal and further elaborated in
paragraph 13 of his statement of
case; it is stated:
"13. The main ground of appeal
in this case is that the
judgment is against the weights
of the evidence alleged and
adduced in the case. We submit
that the crucial issues raised
in this appeal is the legal
inference to be drawn from the
oral and documentary evidence
adduced".
Since the only ground of appeal
is in respect of the weight of
evidence, it is instructive to
relate in detail the facts as
disclosed by the oral and
documentary evidence lead before
the trial court.
The facts as borne out by
evidence were that Cargill
International S.A. Antigua
(hereinafter referred to as
‘Kaguin’) was a worldwide
company with offices in many
countries. It dealt in grain
trading, transportation,
production of by-products, cocoa
and soyabean processing and
numerous other activities.
Kaguin Enterprise (Gh) Ltd.,
(hereinafter referred to as
‘Cargill’) was on the other hand
a limited liability company in
Ghana which at the material time
had one Mr. Edward Sane, a
Senegalese national, as its
majority shareholder and
managing director. This Edward
Sane had worked with Cargill
previously as a broker in Europe
and other West African
countries.
In February 1989, following the
liberalization of rice imports
in Ghana, Mr. Edward Sane
informed Cargill of new market
opportunities in this country.
Thereupon, officials of Cargill
made a visit to Ghana and met
G.N.P.A Customs, the Bank of
Ghana, and other Government
agencies. All these bodies
confirmed that the market had
indeed been liberalized, and
strongly encouraged Cargill to
supply rice to Ghana.
On the strength of the above
favourable response, Cargill on
7th August, 1989 brought into
this country by its vessel
'Ocean Voice’, 4,659.014 metric
tonnes of rice accompanied by 47
bills of lading. Since Kaguin
had opened no letters of credit
nor made any arrangement for the
payment of any rice from
Cargill, the latter entered into
agreement with Umarco (Gh) Ltd.
to take delivery and guarantee
the security and condition of
this rice.
Umarco (Gh) Ltd., which had a
customs bonded warehouse, was
part of an international company
called SAGA Group in Paris with
whose branches Cargill had
engaged their service in many
countries.
Now paragraph 18B of this
Agreement between Cargill and
Umarco tendered at Exhibit 11
stated:
"Umarco shall release to Kaguin
by consignment of a maximum of
700 metric tonnes. However,
before releasing a second
consignment Umarco shall obtain
the following proofs:
(1) Documentary evidence
attesting to the fact that
Customs duties have been paid
according to the current
authorized schedules/rates and
regulations applicable as to the
time of exit of the merchandise.
(2) Documentary evidence from a
Bank confirming the entry in
their account books of the value
of the merchandise in cedis and
an irrevocable commitment of the
bank to transfer its equivalent
in US Dollars to the credit of
Cargill".
On the basis of the above
paragraph 18B of Exhibit 11
Umarco (Gh) Ltd. released 700
metric tonnes of rice to Kaguin
by endorsing seven bills of
lading to them. And the receipt
of this quantity of rice was
acknowledged by Kaguin in
paragraph 7 of their Statement
of Claim, as follows:
"7. When the said consignment
arrived the defendant only
released 14000 bags of rice
weighing 700 metric tonnes to
the plaintiff”.
But up to date Kaguin had not
paid for the 700 metric tonnes
nor complied with the terms of
paragraph 18B of Exhibit 11.
Now sometime after receiving the
700 metric tonnes of rice, the
Deputy Managing Director of
Kaguin, in the person of Mr.
Kwaku Diawusie (who in fact
testified as Kaguin's
representative in this suit) in
a letter dated 26th September
1989 tendered as Exhibit 6,
began to complain first to the
auditors of Kaguin in respect of
what he described as illegal and
unauthorized acts of the
Managing Director, Edward Sane.
He followed this up with a
complaint on 9th November 1989
to the National Investigation
Committee (NIC). In that
complaint as borne out by
Exhibit 21, he accused Edward
Sane of, inter alia, involving
himself in retail trade in Ghana
by unilaterally selling
quantities of American long
grain rice which had been
imported into Ghana in breach of
the Ghana Investment Code.
In the course of the NIC’s
investigation into this
complaint, two representatives
of Cargill came down from Geneva
and made a joint statement
explaining how Cargill came to
bring in the rice. In its
report, Exhibit 21, NIC found
inter alia that the rice were
neither imported by Edward Sane
nor Kaguin, and that the rice at
all material time in Ghana
remained the property of
Cargill. NIC therefore
recommended that Cargill be
allowed to direct Umarco as to
what to do with the remaining
quantity of rice in the bonded
warehouse. Cargill therefore
instructed Umarco (as borne out
by Exhibits 20 and 22) to
release the remaining bags of
rice for sale through FAABLIN
Ltd. Umarco accordingly released
the rice to Faablin Ltd.
Three years thereafter, Kwaku
Diawusie who had then become the
Managing Director and sole
shareholder of Kaguin Ltd.,
instructed Solicitors to write
to Umarco demanding that the
latter account for the rice
which had already been disposed
of on the instructions of
Cargill and also demanded that
the proceeds of the said rice be
paid into its account. When
naturally, Umarco refused to
bulge to these demands, Kaguin,
on 11th February 1994 issued the
writ of summons in this appeal
at the Accra High Court against
Umarco, claiming:
1. "A declaration that the
plaintiff is the owner consignee
of 4,659.014 metric tonnes of
rice imported from Cargill
International S.A. Antigua in or
about July 1989.
2. An order upon the defendant
to account to the plaintiff for
the 4659.014 metric tonnes or
the importation of the said
consignment disposed of by the
defendants.
3. An order upon the defendant
to pay general damages for
conversion".
At the trial the case of Kaguin
Ltd. was present by Mr. Kwaku
Diawusie who testified and
tendered a number of exhibits.
The defence of Umarco was
presented by three witnesses:
DW1 Lawyer Osa Mills who was
once a Solicitor for Kaguin
Ltd., DW2 Mr. Max Paillades, a
pensioner but was the Managing
Director of Umarco at the time
Umarco took delivery of the
rice; and DW3, Mr. C.O. Lamptey
the then Chairman of NIC.
In its judgment, the trial High
Court found that Kaguin was the
importer of the rice and
therefore held that they were
the owners of the rice. The
court further held that since
Kaguin was not a party to the
agreement between Cargill and
Umarco, that agreement was
unlawful.
The court also accepted the
argument of the Kaguin that NIC
had no jurisdiction to
investigate the complaint lodged
by Kwaku Diawuasie. The count
therefore granted the plaintiff,
all its reliefs, ¢10,000,000
general damages with ¢3,000,000
costs. The judgment did not
disclose how the court arrived
at the ¢10,000,000 general
damages.
The Court of Appeal on the other
hand, found that the agreement
between Cargill and Umarco was
valid, that NIC had jurisdiction
to go into the complaint brought
before it, and that the rice was
not imported by Kaguin but that
it remained the property of
Cargill in the possession of
Umarco. Accordingly the release
and sale of the remaining rice
by Umarco was upon the
instructions of Cargill. The
judgement of the High Court was
therefore set aside.
As said earlier, the case of
Kaguin was presented by Kwaku
Diawusie alone who testified and
tendered a number of Exhibits.
Of these exhibits, Kaguin relied
on A, B, C and D as evidencing
its ownership of the rice.
Exhibit A was the bill of lading
No. LC-47 on which the consignee
was ‘To Order’ and the Notify
Address had the name and address
of Kaguin (Gh) Ltd.; Exhibit B
was a temporary invoice from
Cargill to Kaguin on the rice,
dated 15th June 1989; Exhibit C
was a Photosanitary Certificate;
while Exhibit D was an SGS Clean
Report findings.
Now exhibit 11, the agreement
between Cargill and Umarco (Gh)
Ltd. had no date on it, and
therefore difficult for one to
determine when it was made —
that is whether it was made
before the rice came in or
thereafter. However, the
evidence established that the
700 metric tons of rice released
to Kaguin by Umarco (Gh) Ltd.
was done in accordance with
paragraph 18B of the said
agreement. Again Lawyer Nii Osa
Mills who testified for Umarco
as DW1, and was once the
solicitor for Kaguin and Mr.
Edward Sane, said that he was
aware of the existence of this
agreement before he represented
them at the NIC investigations.
He said:
“I was aware of the existence of
this agreement before I went to
NIC”.
Paragraph 5 of this Exhibit 11
stated:
“Cargill shall send to Umarco
Tema copy of its temporary trade
invoice drawn on Kaguin Ghana
covering cost, insurance,
freight value to Tema of the
merchandise shipped”.
Hence, the temporary or
provisional invoice, Exhibit B.
And the import of such an
invoice as explained in Vol. 34
of the 3rd edition of Halbury’s
Laws of England, page 171, is:
"A provisional invoice, if sent
is no more than an intimation of
the way in which the sellers
intend to perform their
contract, and may merely be an
intimation of the way in which
the sellers are willing, as a
concession, to perform".
From the terms of Exhibit 11 and
the fact that Kaguin had made no
provision nor indicated as to
how it would pay for the
consignment it is too plain and
commonsensical that Exhibit B
was intended to be nothing more
than what is quoted above from
Halsbury's Laws. It never vested
ownership of the rice in Kaguin.
Exhibit C, the photosanitary
certificate was evidence of the
fact that the rice had been
inspected according to the
appropriate procedures of the
importing country. While exhibit
D, the SGS clean report findings
also evidenced that the rice
were shipped according to the
import requirements of Ghana in
terms of quantity, quality and
price.
Now although Kaguin was
described on Exhibit B, C and D
as the importer of the rice,
these three documents do not
constitute the shipping
documents, delivery of which to
the buyer is symbolic of
delivery of the goods to the
buyer. In other words, these
three documents do not
constitute documents of title
enabling the buyer to take
delivery of the goods.
In a C.I.F. contract, as
appeared so on the face of the
invoice Exhibit B, the requisite
shipping documents, are the
invoice, bill of lading and
policy of insurance. Thus
section 61 of the Sale of Goods
Act 1962 (Act 137) set out the
conditions provided in
subsections (c), (d), and (e)
thus:
“61. In a c.i.f. contract,
unless a contrary intention
appears—
(c) the seller is bound to
transfer to the buyer proper
shipping documents in accordance
with the terms of the contract;
(d) the buyer is bound to take
up proper shipping documents
and, on doing so, to pay the
price in accordance with the
terms of the contract;
(e) the goods are deemed to be
delivered to the buyer, and the
property therein accordingly
passes to the buyer, on the
transfer to him of the bills of
lading."
The expression ‘proper shipping
documents’ is defined in section
64 to mean—
“(a) the sellers invoices for
the goods
(b) bills of lading which
acknowledge that the goods have
been shipped and which contain
no reservation as to the
apparent good order and
condition of the goods or the
packing; and
(c) in a c.i.f contract and in
any other contract where the
seller is bound to effect
insurance on the goods, policies
of insurance or, where permitted
by commercial custom,
certificates."
The bills of lading accompanying
the rice in dispute were all
consigned ‘To Order’ and not to
Kaguin. The particulars of
Kaguin appeared at the Notify
address column.
In export trade and as confirmed
by section 61(e) of Act 137, a
bill of lading is the evidence
of the title and of the goods
shipped, and by its endorsement
and delivery the transfer of the
possession, and also of the
property in the goods is
effected.
All the bills of lading on the
rice came into the hands of
Umarco (Gh) Ltd. by which Umarco
had authority to take delivery
of the rice. As pleaded by
Kaguin in paragraph 5 of its
Statement of Case.
"5. The defendants were shipping
agents, and were in receipt of
the Bill of Lading, which stated
that the plaintiff was the party
to be notified of the arrival of
the rice, and the consignee of
the said goods was 'To Order'."
Indeed section 7(1) of the
Billing of Lading Act 1961 (Act
42) states:
"Every consignee of goods named
in a Bill of Lading and every
endorsee of a Bill of Lading to
whom the property in goods
therein mentioned passes under
the contract in pursuance of
which the endorsement was made
shall have transferred to and
vested in him all rights, and be
subject to the same liabilities
in respect of the goods as if
the contract expressed in the
Bill of Lading had been made
with himself”.
Kaguin was not the consignee in
the Bill of Lading Exhibit A.
Kaguin was designated in the
'Notify Party' column and this
does not make Kaguin the
consignee. Thus as Amissah J.A's
in C.I.L.E.V. vrs. Black Star
Line Ltd. & Anor. (1968) G.L.R
480 at 485 to 486 explained:
"Where a person unto whom it is
stated in this part that the
goods are shipped differs from
the one given in the 'notify
address', I cannot conceive the
name given in that notify
address being by any stretch of
the imagination described as the
consignee. It is simple common
sense that the consignee of good
is the person to whom the goods
are sent and not necessarily the
address to be notified of the
arrival of goods at its
predestined port. All that the
'notify address' means to me is
that if the address given is
notified of the arrival of the
goods the person to whom they
are consigned or to whom they
ought to be delivered will come
forward to take delivery of
them."
It is often said that a c.i.f.
contract is not the sale of the
goods themselves but a sale of
the documents relating to the
goods. This is because in such a
contract the delivery of the
shipping documents to the buyer
is deemed as delivery and for
that matter property and risk
thereon passes to him. Thus the
method of payment under a c.i.f.
contract is for the buyer to
pay to the seller the price of
the goods in cash upon delivery
of the shipping documents. Of
course, the parties may also
agree that payment shall be made
by the buyer by acceptance of a
bill of exchange against
delivery of the shipping
documents. In such a case the
bill of exchange drawn by the
seller upon the buyer is
forwarded to the buyer with the
other documents, and the
property in the goods does not
pass unless the buyer upon
presentation of the documents
accepts the bill of exchange.
Payment is also frequently made
by means of a confirmed credit.
Thus section 63 of the Sale of
Goods Act 1962 (Act 137)
provides:
“63. Where in a c.i.f. or f.o.b.
contract the price is to be paid
by means of a letter of credit
opened at a bank to be nominated
by the seller, then in the
absence of a contrary intention—
a) the credit must be opened not
later than the earliest date on
which the seller may ship the
goods, or where the date of
shipment is to be fixed by the
buyer, not later than the
earlier date on which the seller
may be required to ship the
goods;
b) as against the buyer, the
seller is only entitled to draw
against the credit on
presentation to the bank of
proper shipping documents.”
Which of these methods of
payment, or indeed any method of
payment, did Kaguin adopt in the
importation of the rice which it
claims in his suit to be the
importer and owner thereof? None
whatsoever!
It is indeed the practice of
shippers to protect their
interest when a consignment has
not been paid for to hold on to
the commodity and allow it to
remain their property by
inserting in the consignees
column ‘To Order’ as was done in
the instant case. And by
inserting ‘to order’, Cargill
was to direct the one to whom
the rice were to be delivered.
If Cargill had intended Kaguin
to be the consignee they would
have inserted Kaguin’s name in
that column.
From the terms of the agreement
Exhibit 11, it was evident that
because Kaguin had not paid a
pesewa nor opened any letters of
credit for the purchase of the
rice, Cargill was mindful of
ensuring that any quantity of
rice delivered to Kaguin on
their instructions was paid for
before further quantities were
released to them.
And as the evidence clearly
established, the first 700
metric tonnes of rice, released
to Kaguin on the instructions of
Cargill in accordance with
Exhibit 11 had up to date not
been paid for. The plaintiff’s
representative, Mr. Kwaku
Diawusie admitted this while
under cross-examination:
“No I did not pay Cargill the
cost of rice allocated to us”.
Indeed throughout the entire
trial, Kaguin who claims to be
the importer/owner of the
entire rice, never led a shred
of evidence on the terms on
which Kaguin agreed with Cargill
to pay for the goods. He made no
cash payment nor opened any
letters of credit. Experienced
traders like Cargill therefore
would not consign their goods to
unsecured importer like Kaguin.
Hence the precaution they took
in engaging Umarco to store and
guarantee the security and
condition of the rice.
On the whole, one cannot help
but discern some incongruity on
the part of Kaguin in this
action, especially on the part
of Kwaku Diawusie who described
himself in his evidence as
“… the sole shareholder and
director in the
plaintiff/company”.
This is the man who according to
Exhibit 20, the NIC report, had
complained that
“Edward Sane, even though a
foreigner, had involved himself
in the retail trade in Ghana by
unilaterally selling quantities
of American long grain rice
which have been imported into
Ghana in breach of the Ghana
Investment Code”. (emphasis
mine)
It is this same rice which he
now claims in this action to
belong to his company, Kaguin,
at a time he had succeed in
throwing out Edward Sane from
the company. Can he now allege
that the rice was properly
imported by his company?
Next, by the report of the NIC,
which Kwaku Diawusie was fully
aware, the NIC found the rice to
belong to Cargill and permitted
it to direct Umarco to release
it for sale. This was
accordingly done. Again Cargill
shipped the entire rice
consignment into the warehouse
of Umarco (Gh) Ltd. and not to
Kaguin. If indeed Kaguin
genuinely believed that they
imported the rice, why did they
not direct their action against
Cargill which had obviously
refused to deliver the rice to
them. Umarco only acted as the
agent of Cargill. And this fact
of agency was not unknown to
Kaguin. This action against
Umarco when the facts fully
disclose that Cargill had all
along exercised control and
ownership of the rice in Ghana,
clearly testifies to the
emptiness of Kaguin’s action.
Throughout the whole of his
evidence, Kwaku Diawusie never
set out the terms on which
Kaguin allegedly imported the
rice.
On the facts, this action by
Kaguin against Umarco is
misdirected and certainly in bad
faith. The proper person to sue
if Kaguin has any genuine case,
is Cargill and not Umarco (Gh)
Ltd.
Accordingly, I find that the
judgment of the court of Appeal
is impeccable and fully
supported by the evidence. The
appeal therefore ought to be and
is hereby dismissed.
ATUGUBA, J.S.C.:
The
Plaintiff/Respondent/Appellant
sued in conversion. In Street,
The Law of Torts, 7th edition,
at p. 30 it is stated:
“Conversion may be defined as an
intentional dealing with goods
which is seriously inconsistent
with the possession or right to
immediate possession of another
person.
The tort protects the
plaintiff’s interest in the
dominion and control of his
goods, it does not protect his
interest in its physical
condition. It follows,
therefore, that the tort is much
concerned with problems of title
to personal property. Indeed,
many cases on conversion are in
essence disputes on title…”
Also in STANDARD CHARTERED BANK
VS. NELSON (1998-99) GLR 810
S.C. Charles Hayfron-Benjamin,
J.S.C. delivering the judgment
of the Court stated at p. 817
thus: “whenever, as in the
present case, chattels belonging
to one person are appropriated
to the use of another, the
proper action is in conversion.
In so saying, we have derived
much assistance from the learned
authors of Clerk & Lindsell on
Torts (12th ed.), who states at
p.899 that:
“The word conversion, however,
is the recognised legal
expression for the wrongful
deprivation of the possession of
goods, and its use in this
artificial and fictitious sense
has now probably become
inveterate.” (emphasis supplied)
The question is whether the
appellant possessed or had the
right to the immediate
possession of the goods in this
case.
In JOHN HOLT SHIPPING SERVICES
VS. EDWARD NASSER & CO. LTD.
(1971) 1 GLR 205 C.A. at 206
Archer, J.A. stated the ancient
principle that
“… the bill of lading ….
constituted the legal title of
the respondents to the goods.”
(emphasis supplied)
This basic principle has been
consistently followed. See PAN
AFRICAN TRADING CO. VS. HOLLAND
WEST AFRICA (1976) 1 GLR 237 at
238. In TABURY VS. GHANA
COMMERCIAL BANK (1980) GLR 90 at
94 Sarkodee, J. said:
“ ‘The bill of lading in law and
in fact represents the goods.
Possession of the bill of lading
places the goods at the disposal
of the purchaser.’
See BIDDEL BROTHERS VS. E.
CLEMENS HORST CO. (1911) 1 K.B.
934 at pp. 956-957. However,
delivery of the bill of lading
operates as a symbolical
delivery of the cargo and
whether property in the goods by
the indorsement and delivery of
the bill of lading will pass
will depend upon the intentions
of the parties that the property
should pass. This can be
inferred from the manner the
parties carried on their
business.” (emphasis supplied)
In the House of Lords, in E.
CLEMENS HORST CO. VS. BIDDEL
(1911-13) ALL ER 98 H. L. at p.
101 the Earl of Loreburn L.C.
said:
“The question is: When is there
delivery of goods on boardship?
That may be quite different from
delivery of goods on shore. The
answer is that delivery of the
bill of lading when goods are at
sea may be treated as delivery
of the goods themselves. That is
so old and so well established
that it is unnecessary to refer
to authorities on the subject.”
(emphasis supplied)
It is therefore clear that in
order to gain possession of or
title to goods shipped under a
bill of lading one must be the
holder of the bill of lading.
But that means a holder as
consignee or endorsee thereof.
In this case even if the
Appellant came by the bill of
lading he was not the consignee
or endorsee in any manner
entitling him to the goods
thereof. He was plainly on the
face of the bill of lading,
which is the dominant document
in C.I.F. shipments, as in this
case, holder of a notify
address. That does not give him
title or possession of the
goods. That has been settled in
C.I.L.E.V. VS. BLACK STAR LINE
LTD. (1968) GLR 480, PAN AFRICAN
TRADING CO. VS. HOLLAND WEST
AFRICA, supra, and ALFA
ENTERPRISES LTD. VS. PAN AFRICAN
TRADING CO. (1979) GLR 511 C.A.
Without the bill of lading, the
fact that the Appellant claims
to have been the purchaser is
irrelevant. That was so laid
down in C.I.L.E.V. VS. BLACK
STAR LINE LTD. supra and ALFA
ENTERPRISES LTD. VS. PAN AFRICAN
TRADING CO., supra. At no time
did the Appellant, (except those
actually delivered to him by
UMARCO), gain possession or
title to the goods, per the bill
of lading. As Jiagge, J.A.
stated in the Alfa Enterprises
Ltd. case, supra, at p. 574
“ ‘ The right to have possession
of the goods passes to the
transferee of the bill of
lading, that is the symbol of
the goods, and a transfer of it
is, symbolically, a transfer of
the possession of the goods
themselves. Until the goods have
been delivered, a delivery of
the duly indorsed bill of lading
operates, as between the
transferor and the transferee,
and all who claim through them,
as a physical delivery of the
goods would do.’ (emphasis
supplied)
Carver on Carriage of Goods by
Sea (10th ed.) pp. 710-711.” As
noted at p. 575 per Jiagge, J.A.,
however, there are a few
instances in which the bill of
lading will be ineffective in
the hands of an indorsed holder,
as where the vendor or shipper
lacked title to the goods ab
initio. But that is not so in
this case.
I would therefore also dismiss
the appeal.
AKUFFO, J.S.C.:
I agree that the appeal be
dismissed.
COUNSEL
Dr. Ekow Daniels for the
Appellant.
T. A. Tagoe (with him E. K.
Mensah) for the Respondent.
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