A bill of lading is not "clean" if it contains a qualifying clause, such as "signed under guarantee to produce ship's clean receipt." Such qualification prevents the shipowner from being estopped by the statement that goods were received in apparent good order and condition.

Lord Wright:-

The appellants claimed in the action as holders of a bill of lading in respect of a quantity of sugar shipped at Demerara on the respondents' steamship Colborne for delivery at Montreal. In due course the appellants, who had purchased the sugar on c. i. f. terms, took up the bill of lading against payment of 95 per cent. of the purchase price when it was presented to them in accordance with the terms of the contract and thereupon became owners of the sugar and duly thereafter paid the balance of the price. The sugar was found to be damaged. In the action it was alleged, in addition to the claim on estoppel, that the damage had been sustained during the voyage and that the respondents as shipowners were liable either for failure to carry with due care or for bad stowage. On the appeal before this Board the primary issue on which the appellants claimed to succeed was on estoppel based upon the terms of the bill of lading which, it was contended, contained an unqualified statement that the sugar had been received in apparent good order and condition for shipment on the Colborne; the appellants, it was said, accepted the bill of lading on presentation at Montreal and paid for the sugar on the faith of that statement and were entitled to recover accordingly for the resulting loss. The trial Judge upheld the claim, but the Supreme Court of Canada dismissed it on the ground that the statement of good order and condition was qualified by the other terms of the bill of lading.

[2] The two further contentions of fact on which the appellants originally relied, namely, want of due care on the voyage and bad stowage, did not succeed either before the Judge or before the Supreme Court and need not here be further considered. Their Lordships agree that the contentions failed.

[3] The bill of lading dated at Georgetown, B.G., on 13th June 1938, and signed by the agents of the shipowners (the respondents) was a "received for shipment" not a "shipped" bill of lading. The loading of the sugar in question was completed on 13th June and the ship's receipt was signed on that date. It is not clearly established whether the signing of the bill of lading was before or after the actual completion of the loading, but as the bill of lading bore on its face an indorsement "signed under guarantee to produce ship's clean receipt" it would seem reasonable to infer that the ship's receipt had not reached the agents' office when they signed the bill. As will be shown later, this particular point is not material in the final stage of the argument. Evidence was given and not questioned that there was a practice at the port to issue bills of lading before the completion of the loading and the issue of the mate's receipt in order to facilitate the shippers' business arrangements by enabling them to catch an earlier mail for the port of destination so that the document could be presented to the buyer for acceptance and payment before the carrying vessel's arrival. In the present case the Colborne did not arrive until 3rd July 1938, but the bill of lading was taken up against payment at Montreal on 29th June 1938.

[4] It was not disputed that the sugar which had been lying for some time at the wharf at Georgetown had suffered some damage before shipment. From this resulted the damage found on arrival at Montreal. The voyage had been made under favourable weather conditions and there was nothing to account for the wet condition of part of the cargo, except exposure during the rainy season while waiting for shipment. The ship's receipt signed on 13-6-1938, by the Chief Tally Clerk acting for Booker Bros McConnell and Co., Ltd., who were the shippers and sellers, and by the same company as agents for the shipowners, had the notation "Many bags stained, torn and resewn." This state of things would be sufficient to explain the damage found at Montreal on unloading, though that damage would not involve an inference of bad stowage, as on the evidence the Supreme