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.