LEGAL PRINCIPLE: MARITIME LAW – Bills of Lading – Indorsement – Indorsement Without Consideration Does Not Transfer Property
PRINCIPLE STATEMENT
No case has gone so far as to decide that a bill of lading is transferable like a bill of exchange, and that the mere signature of the person entitled to delivery of goods prima facie passes property in them to the indorsee; much confusion has arisen from similitudinary reasoning upon this subject; there must be value upon the indorsement of a bill of lading, or no property in the goods is thereby transferred; if no property passed to indorsee, they could have no right to complain of non-delivery or conversion of goods as injury to themselves.
RATIO DECIDENDI (SOURCE)
"No case has gone so far as to decide that a bill of lading is transferable like a bill of exchange, and that the mere signature of the person entitled to the delivery of the goods prima facie passes the property in them to the indorsee. Much confusion has arisen from similitudinary reasoning upon this subject. There must be value upon the indorsement of a bill of lading, or no property in the goods is thereby transferred. If no property passed to the indorsee, he could have no right to complain of the non-delivery or of the conversion of the goods as an injury to himself."
EXPLANATION / SCOPE
Bills of lading differ from bills of exchange: Bills of exchange: Mere signature/indorsement prima facie passes rights—negotiable instruments. Bills of lading: Require consideration/value for property transfer—not purely negotiable like bills of exchange. “Similitudinary reasoning” (reasoning by similarity) has caused confusion—treating bills of lading like bills of exchange. Critical principle: Indorsement requires value/consideration—without consideration, no property transfer occurs. Mere indorsement (signature alone): doesn’t transfer property, is insufficient without value, and leaves property with indorser. Consequence: If no property passes: indorsee has no property right in goods, cannot sue for non-delivery or conversion (these require property interest), and has no standing to complain as owner. This serves: protecting true owners, preventing claims by non-owners, and requiring actual property transfer (through consideration) not mere paper indorsement. The principle: indorsement is necessary but insufficient—value/consideration is essential for property transfer. Without consideration: indorsement is empty formality, property remains with indorser, and indorsee gets no ownership rights. This prevents: treating bills of lading as pure negotiable instruments, assuming indorsement alone transfers property, and indorsees without consideration claiming ownership rights.