ELLERMAN & PAPAYANNI LINES, LTD. v. IGRAF (SALES), LTD. (SEQUERRA, THIRD PARTY).

(1942) 74 Ll.L.Rep. 177

COURT OF APPEAL.

Before Lord Justice Scott, Lord Justice MacKinnon and Lord Justice Goddard.

Sale of goods (f.o.b.) - Freight - Purchase by defendants of cases of sardines - Shipment from Portugal in plaintiffs' steamer - Freight "payable upon shipment and to be paid ship or goods lost or not lost and if not paid upon shipment shipper's consignees and the goods to remain liable therefor" - Freight not paid on shipment - Goods insured by defendants for £4500, subsequently increased to £6500 - Sale by defendants to third party - Payment: Net cash against documents, less allowances for import duty and landing charges - Part price paid by third party - Ship and cargo sunk - Agreement between defendants and third party that latter should claim under policy and that he should pay defendants balance of price, less certain allowances - Dispute as to whether third party agreed to pay freight - Claim by plaintiffs for freight admitted by defendants - Right of defendants to indemnity from third party - Subsequent discovery that vessel was sunk before contract with third party was entered into - Avoidance of contract - Effect - Restitutio - Judgment entered for defendants by Atkinson, J., against third party for agreed sum - Appeal by third party.