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his protection against loss or damage by effecting a more comprehensive or different insurance himself?.
The degree of sanctity with which the c.i.f. seller's obligation of insurance has been invested, has involved during the past year a judicial construction of that obligation which has been so literal, so technical, as to occasion surprise in a commercial casea. Lush and Rowlatt JJ. had already held in 1913 that even when the goods have arrived safely, the buyer is entitled to demand his 'pound of flesh' and can refuse to accept them on the ground that the c.i.f. seller had omitted to insure them.
In connexion with insurance under a c.i.f. contract, some light has also been thrown upon an obscure section of the Sale of Goods Act, 1893, s. 32, sub-s. 3, as follows:
‘Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, under circumstances in which it is usual to insure, the seller must give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails to do so the goods shall be deemed to be at his risk during such sea transit.'
What does this mean? There is less authority on what it does mean than there is on what it does not mean, and so far no one has been able to discover any vital use for it. Bailhache J. said in Wimble v. Rosenberg4 that it does not apply to the ordinary contract for the sale of goods f.o.b., but the Court of Appeal (Vaughan Williams and Buckley L.JJ., Hamilton L.J. dissenting) said it didá. But they found it unnecessary to apply it to the contract then before them. Hamilton L.J. indicated the class of contract to which, in his opinion, the sub-sections applied-neither f.o.b. nor c.i.f. In his judgment Bailhache J. said obiter that it did not apply to c.i.f. contracts or to contracts 'ex-ship, and in Law & Bonar v. British American Tobacco Co.1 the question of its applicability to c.i.f. contracts was raised directly before Rowlatt J. The goods were consigned from Calcutta to Smyrna on board a British vessel under a bill of lading dated 20th July, 1914, and on or about the 13th August the British vessel with her cargo was sunk by a German cruiser. The contract being c.i.f., the seller had effected an insurance which was admittedly upon the terms then 'current in the trade,' that is, excluding war risks. The buyer refused to accept the documents when tendered and claimed that under s. 32 (3) of the Sale of Goods Act he was entitled to notice from the buyer to enable him to insure against war risks. Rowlatt J. without saying that the sub-section would not ‘apply to a contract c.i.f. made at a time when insurances other than those to be provided by the seller-e.g. against war risks—are usual,' held that it did not apply to a contract c.i.f. (made 6th and 7th May, 1914, in this case) when it is not customary to insure against war risks, and gave judgment for the sellers. Surely this amounts to saying that it does not apply to a c.i.f. contract at all, because, if it was made at a time when it was customary to insure against war or any other abnormal risks, then a policy against those risks would be ‘current in the trade and the seller would not fulfil his obligations unless he tendered such a policy.
1 C. Groom, Limited v. Barber (1915] 1 K. B. 316, contains an interpretation of the expression ‘War risk for buyer's account occurring in a c.i.f. contract.
Manbre Saccharine Co. v. Corn Products Co. (1919] 1 K. B. 198; Wilson, Holgate & Co. v. Belgian Grain & Produce Co. (1919] W. N. 180.
8 Orient Co. v. Brekke & Howlid (1913] 1 K. B. 531. 4 (1913] 1 K. B. 279.
6 (1913] 3 K. B. 743 (C. A.)—for reasons which appeared to convince Lord Reading C.J. in a later case in the Court of Appeal (1917) 33 T. L. R. 516 (C. A.), though it was not open to that court to differ from the decision of the majority in Wimble v. Rosenberg.
Later the Court of Appeal had an opportunity of reconsidering Wimble v. Rosenberg in the case of a contract f.o.b. and followed it, but again holding that it did not prevent the particular sellers from recovering as the buyers had sufficient knowledge of the facts to enable them to insurea.
It seems therefore that the sub-section we have been discussing, though originally a barbarism imported from Scotland, can apply to a contract f.o.b. but from the nature of things, it being customary for the buyer under such a contract to send
1  2 K. B. 605.
2 Northern Steel & Hardware Co. v. John Batt & Co. (1917) 33 T. L. R. 516 (C. A.).
a ship, rarely does; probably does not, it is submitted, apply to a contract c.i.f. or 'ex-ship’; and finds its proper sphere of activity in a class of case where 'the seller's obligation to send the goods arises not on the sale itself but only incidentally to it, as part of a simultaneous mandate given by the buyer to his seller.' For these and other mercies we are indebted to the Act of Union with Scotland.
(3) Effect of action by the Executive. We now come to consider the effect upon contracts for the sale of goods of prohibitions of export or import and similar official action of an emergency nature. Many of the cases turn upon the construction of particular clauses and it is not easy to extract any general principles, nor is it always possible to draw the line (as we have seen in Chapter V) between supervening illegality and impossibility of performance. In that chapter we found it necessary to the thread of our argument to consider several of these cases, so that the remarks which follow are supplementary and somewhat fragmentary.
The lawful requisition by the Government of specific goods which are the subject of a contract of sale but not yet delivered, will excuse the seller from further performance of the contract2. Whether we regard it as a case of impossibility arising from the cessation of a state of affairs postulated as the foundation of the contract or in the narrower light of impossibility arising from a lawful act of the State4 the conclusion arrived at is the same.
Whether the case would be different if the act of the State purporting to requisition goods which are specifically the subject of a contract of sale was ultra vires is not clear. In the case of Russian Bank for Foreign Trade v. Excess Insurance Co.1 Bailhache J. held upon a policy of marine insurance that voluntary compliance with an ultra vires order of the Admiralty purporting to requisition a ship outside the British Isles and the waters adjacent thereto did not amount to a ‘restraint of princes'; 'as disobedience to an ultra vires order is not illegal, obedience to such an order, unless compelled by force, or threats of force, is a voluntary act and not a restraint of princes.' This judgment was affirmed by the Court of Appeal on another ground, and Scrutton L.J. inclined to doubt this view. It may have to be considered in the case of voluntary compliance with an unlawful requisitioning of goods.
1 Per Hamilton, L.J.  3 K. B. at 763.
2 Shipton, Anderson & Co. and Harrison Bros. & Co.'s Arbitration (1915] 3 K. B. 676.
3 See Chapter V.
4 Bailey v. De Crespigny (1869) L. R. 4 Q. B. 180. For a case of the requisition before completion of a ship sold while under construction, see Dale Steamship Co. v. Northern Steamship Co. (1918) 62 S. J. 328 (C. A.).
Where the sale is one of goods which are not specific or where the prohibition of export or import is only partial, more difficult questions are apt to arise.
In Ford & Sons (Oldham), Ltd. v. Henry Leetham & Sons, Ltd.?, the seller had power to cancel the contract for the sale of flour not specific in case of prohibition of export... preventing shipment or delivery of wheat to this country.' Later, export was prohibited from twenty-one countries, but remained permissible in the case of three countries which were the principal sources of supply to this country. The price of wheat rose considerably as the result of the prohibition, and the seller made a short delivery, and claimed to cancel the contract. Bailhache J. held that the fact of one or more substantial sources of supply being closed by prohibition of export enabled him to exercise his right of cancellation.
Many prohibitions of exportation or importation imposed during the war have merely been prohibitions in form and have in substance been the means of regulating exportation or importation by a system of licences or permits. Failure to obtain the necessary licence or permit has frequently given rise to disputes, as it may happen that a seller on a rising market will not display as much zeal in his attempts to obtain
2  2 K. B. 123;  1 K. B. 39 (C. A.).
a licence from the appropriate Government department as his buyer considers is due from him.
In Anglo-Russian Merchant Traders and John Batt & Co.'s Arbitration there was an agreement to sell and deliver abroad aluminium made at a time when to the knowledge of both parties aluminium could only be exported from the United Kingdom under licence from the British Government. The sellers duly applied for an export licence but their application was refused. Upon the assumption that both parties contemplated shipment from this country, were the sellers liable to pay damages for breach of the contract which was in terms absolute and contained no such expression as 'subject to permit being obtained'? The umpire and Bailhache J. held that the sellers, having entered into a positive contract to ship aluminium and not having stipulated for the event of being unable to obtain a permit, were liable in damages; they had 'assumed the obligation and risk of obtaining a permit equally with the obligation and risk of obtaining the goods or freight room.' There is a great deal to be said for this view of the obligations of one who enters into a positive contract with his eyes open, but the Court of Appeal unanimously (Viscount Reading C.J., Lord Cozens-Hardy M.R. and Scrutton L.J.) took an entirely different line and applied The Moorcocka; to give 'business efficacy' to the contract it was necessary in their opinion to imply an obligation that the sellers should use their best endeavours to obtain a permit; they had done so and failed, and therefore there was no breach of contract. It is not easy to define the limits of The Moorcock doctrine, but clearly unless it is applied with care, it may injure the interests of business, the essential basis of all trade' being the right to rely upon contracts.
1  2 K. B. 679 (C. A.). 2 (1889) 14 P. D. 64.