Summary of Churchill & Sim v Goddard case

Churchill & Sim v Goddard [1936]

Summary of Facts: The case was brought by a London firm of Timber brokers. The plaintiffs (Churchill & Sim) who as del Credere agents for a Finish firm of Timber exporters, had paid into a London bank for the account of the exporter the invoice amount of certain quantities of timber shipped to one Goddard, the importer and purchaser of the goods, and at the same time had drawn two bills of exchange on the importer. The bills were accepted by the defendant at 4 months from the date of the bill of lading and returned to the plaintiffs. The shipments arrived and on inspection were rejected by the importer. The dispute between importer and foreign shipper went to arbitration and was still pending at the end of 4 months when the bill of exchange became due. The defendant refused payment and plaintiff’s sued for recovery of the amount of the bills. Judgment for the defendant was rendered in the lower court (King’s Bench division), but the Court of Appeal reversed the judgment and found for the plaintiff’s.

Judgment: The court pointed out that if the plaintiffs were collecting the proceeds of the bills for the account of their principals, the foreign exporters, an answer good against the exporter would also be good against the plaintiffs, but if, in this case, the agent had actually settled with their principals, then they could collect on the bills of exchange despite any claim which the defendant might have against the foreign shipper.

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