D had advanced monies to a distillery company on the security of manufactured whisky stored in a warehouse. On the occasion of each advance, the company delivered to D an invoice and a warrant which described the particulars of the whisky and stated that it was deliverable to D or his assigns.
Held: A person against whom the unauthorised liquidator is litigating may not object to such lack of authorisation, for it is a matter between the liquidator and the creditors. Lord Parker stated: ‘in my opinion s.151 of the Companies (Consolidation) Act, 1908, which enables a liquidator in the case of a winding-up in Ireland to bring or defend legal proceedings with the sanction of the Court, was not intended to confer, and does not confer, on third parties any right to object to proceedings brought by a liquidator in the name of the company, on the ground that no such sanction has been obtained.’
Delivery of the subject property is absolutely necessary to complete a pledge, although the transfer of possession may be actual or constructive: ‘There are, however, cases in which possession may pass to the pledgee without actual delivery, for example, whenever there is some agreement between the parties the effect of which is to change the possession of the pledger from a possession on his own account as owner into a possession as bailee for the pledgee: see Meyerstein v. Barber.(1) Such an agreement operates as a delivery of the goods to the pledgee and a redelivery of the goods by the pledgee to the pledger as bailee for the purposes mentioned in the agreement. A mere book entry cannot, however, have this effect . .’
The terms of the warrant were ambiguous. Lor Parker said that if the true meaning of the warrant was that it was intended to be an acknowledgement by the distillery company that it held the goods referred to as bailee for D or his assigns by indorsement: ‘it is sufficient to change the nature of the company’s possession, operating as an actual delivery of the goods to [D], and a redelivery of the same goods by him to the company to hold as bailee for him. Under these circumstances, on the hypothesis that the company was in actual possession, [D] obtained a good pledge at common law.’
Judges:
Lord Parker of Waddington
Citations:
[1914] AC 823, 111 LT 8
Statutes:
Companies (Consolidation) Act 1908
Jurisdiction:
England and Wales
Cited by:
Cited – Borealis Ab v Stargas Limited and Others and Bergesen Dy A/S Berge Sisar Dorealis Ab v Stargas Limited and Others HL 27-Mar-2001
The ship came to port, and samples of the cargo proved contaminated. The carrier asserted that the consignee was to be deemed to have demanded delivery, and had so assumed the risk. The court found that the mere taking of samples was not such a . .
Lists of cited by and citing cases may be incomplete.
Equity, Company, Insolvency
Updated: 29 April 2022; Ref: scu.194545