Charles M'Kinnon, Esq. and his Guardians v. Sir Alexander Macdonald, Bart., John MacKenzie, his Trustee, and Lieutenant John Mackinnon

Factual and Procedural Background

Merchant A, a Virginia trader, entered into a commercial arrangement with the Appellants, merchants based in Glasgow. Under the contract the Appellants agreed to supply Glasgow goods to Virginia, and Merchant A undertook to remit payment by consigning tobacco and other commodities. In August 1765 Merchant A shipped a cargo of tobacco to Scotland. Although the bill of lading stated that the cargo was shipped on Merchant A’s account and risk, it specified delivery “to the Appellants or their assigns,” freight payable on delivery. A few hours after the vessel reached The City, the Respondent—one of Merchant A’s creditors—served an arrestment over both the ship and its cargo to secure a debt owed by Merchant A.

The Court of Session determined that Merchant A had not divested himself of ownership in either the ship or the cargo and therefore held that the arrester’s diligence validly attached to both. The Appellants sought review in the House of Lords. The interlocutors appealed against were dated 17 February, 19 July, and 29 November 1768, and 2 March 1770.

Legal Issues Presented

1. Whether the Appellants held a special property in the cargo, by virtue of the bill of lading and the underlying contract, that was superior to the Respondent’s arrestment.
2. Whether the same reasoning applied to the vessel itself, thereby preventing or permitting the Respondent’s arrestment over the ship.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The House of Lords concluded that, notwithstanding the bill of lading’s statement that the shipment was on Merchant A’s account and risk, the contractual documentation conferred on the Appellants a special property in the cargo as consignees. That proprietary interest was held to prevail over the Respondent’s arrestment, which depended on Merchant A retaining title. Accordingly, the Respondent’s diligence could not attach to the cargo.

Conversely, the Lords found no basis to alter the Court of Session’s ruling regarding the ship itself. Ownership of the vessel remained with Merchant A, so the Respondent’s arrestment over the ship remained effective. The Lords therefore drew a clear doctrinal distinction between goods covered by a bill of lading that vested title in consignees and the separate question of title to the carrying vessel.

Holding and Implications

Partially REVERSED and Partially AFFIRMED. The interlocutors relating to the cargo were reversed, and the Appellants were declared to have a special property in the goods, ranking ahead of the Respondent’s arrestment. All interlocutors concerning the ship were affirmed.

The immediate effect is that the cargo must be released to the Appellants, while the ship remains subject to the Respondent’s arrestment. The opinion turns on the allocation of property rights under a bill of lading but does not purport to establish any broader precedent beyond the parties involved.