In Ontario the Sale of Goods Act (s. 2) provides:
"Document of title" shall include any bill of lading and warehouse receipt, as defined by The Mercantile Law Amendment Act, any warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or delivery, the possessor of the document to transfer or receive goods thereby represented.
The foregoing is copied from the Factors Act, R.S.O. 1914, c. 137, s. 2. See 46.
The Mercantile Law Amendment Act, R.S.O. 1914, c. 133, s. 2, provides:
2. In this Act,
(a) "Bill of lading" shall include all receipts for goods accompanied by an undertaking to transfer the same from the place where they were received to some other place by any mode of carriage whatever, whether by land or water or partly by land and partly by water;
(b) Goods shall include wares and merchandise;
(c) "Warehouse receipt" shall mean any receipt given by any person for goods in his actual, visible and continued possession as bailee thereof in good faith and not as of his own property, and shall include
(i) a receipt given by any person who is the owner or keeper of a harbour, cove, pond, wharf, yard, warehouse, shed, storehouse or other place for the storage of goods delivered to him as bailee, and actually in the place or in one or more of the places owned or kept by him whether such person is engaged in other business or not;
(ii) a receipt given by any person in charge of logs or timber in transit from timber limits or other land to the place of destination of such logs or timber; and
(iii) a specification of timber.
In the United Kingdom the Sale of Goods Act (s. 62) provides that document of title to goods has the same meaning as it has in the Factors Acts, and the Factors Act, 1889, s. 1, provides:
1. - (3) The expression "goods" shall include wares and merchandise. (4) The expression " document of title" shall include any bill of lading, dock warrant, warehouse-keeper's certificate, any warrant or order for the delivery of goods and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.
The Sale of Goods Act (Ont. s. 29; U. K. s. 29) provides: 29. - (3) Where the goods at the time of sale are in the possesion of a third person, there is no delivery by the seller to the buyer unless and until such third person acknowledges to the buyer that he holds the goods on his behalf; provided that nothing in this section shall affect the operation of the issue or transfer of any document of title to goods.
As to delivery, see' chapter 6, 62. The sub-section is quoted here on account of the proviso.
The Sale of Goods Act (Ont. s. 46; U.K. s. 47) provides: 46. Subject to the provisions of this Act, the unpaid seller's right of lien or retention or stoppage in transitu is not affected by any sale or other disposition of the goods which the buyer may have made, unless the seller has assented thereto. Provided that, where a document of title to goods has been lawfully transferred to any person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, then, if such last-mentioned transfer was by way of sale the unpaid seller's rights of lien or retention or stoppage in transitu is defeated, and if such last-mentioned transfer was by way of pledge or other disposition for value, the unpaid seller's right of lien or retention or stoppage in transitu can only be exer-cised subject to the rights of the transferee. This section is. discussed in chapter 7, 75, in connection with the seller's lien and right of stoppage in transitu. It is quoted here as an example of the effect of the transfer of a document of title.
It is to be observed that in the foregoing statutory definitions bills of lading are grouped with warehouse receipts and other similar receipts under the general name of "documents of title," and that in the other provisions of the Sale of Goods Act just quoted, as well as in the Factors Act (to be referred to later), all these documents of title are put on the same footing for the purposes mentioned in the statutes. Similarly under the Bank Act (ss. 2, 86, 87), and in Ontario under the Mercantile Law Amendment Act, bills of lading and warehouse receipts are put on the same footing as regards their transfer to a lender by way of collateral security.
At common law, however, the transfer of a warehouse receipt, unlike that of a bill of lading, did not have the effect of transferring the property in the goods to the transferee, at least until the receipt was presented to the bailee and acted upon.
Bank of British North America v. Clarkson, 1869, 19 U.C.C.P. 182, at p. 188; Glass v. Whitney, 1863, 22 U.C.R. 290. As to bills of lading, see Barber v. Meyerstein, 1870, L.R. 4 H.L. 317, 4 R.C. 797; Glyn v. East and West India Dock Co., 1882, 7 App. Cas. 591, and the cases cited in chapter 7, 75.
In the United Kingdom the Bills of Lading Act, 1855, provides:
Whereas by the custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner, and it is expedient that such rights should pass with the property; and whereas it frequently happens that the goods in respect of which bills of lading purport to be signed, have not been laden on board, and it is proper that such bills of lading in the hands of a bona fide holder for value, should not be questioned by the master or other person signing the same on the ground of the goods not having been laden as aforesaid: Be it therefore enacted ... as follows: 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 shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.
2. Nothing herein contained shall prejudice or affect any right of stoppage in transitu, or any right to claim freight against the original shipper or owner, or any liability of the consignee or endorsee, by reason or in consequence of his being such consignee or endorsee, or of his receipt of the goods by reason or in consequence of such consignment or endorsement.
3. Every bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same notwithstanding that such goods or some part thereof may not have been shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not been in fact laden on board; provided, that the master or other person so signing may exonerate himself in respect of such misrepresentation by showing that it was caused without any default on his part, and wholly by the fraud of the shipper, or of the holder, or some person under whom the holder claims.
In Ontario the foregoing statute is in effect re-enacted (without the preamble), in the Mercantile Law Amendment Act, R.S.O. 1914, c. 133, s.7. Apart from merely verbal differences, s. 3 of the original statute is altered by the insertion of the words "train or conveyance of any kind" after the word "vessel," and by the insertion of the words "or unless the bill of lading has a stipulation to the contrary" immediately before the proviso. See also the Bills of Lading Act, R. S.C. 1906, c. 118, which is substantially the same as the Ontario statute, except that in the section corresponding to s. 2 of the original statute there is a clause safeguarding "any right of an unpaid vendor under the Civil Code of Lower Canada." As to the Bills of Lading Act, see the following cases:
Grant v. Norway, 1851,10 C.B. 665, 24 R.C. 258, followed in Erb v. Great Western Ry. Co., 1881, 5 Can. S.C.
R. 179 (fraudulent receipt for goods not received), and in Cox v. Bruce, 1886, 18 Q.B.D. 147, 24 R.C. 268 (goods incorrectly described).
Sewell v. Burdick, 1884, 10 App. Cas. 74, 4 R.C. 758 (pledgee not liable for freight).
The Freedom, 1871, L.R. 3 P.C. 394, followed in Friendly v. Canadian Transit Co., 1886, 10 O.R. 756 (right to sue upon contract follows property in goods).