The Bowhill Coal Co., Fife, Ltd v. Tobias [1902] ScotLR 40_234 (18 December 1902)

The Bowhill Coal Co., Fife, Ltd v. Tobias [1902] ScotLR 40_234 (18 December 1902)

Under an f.o.b. contract for export, the seller is liable for any export duty that must be paid before shipment, even if imposed after the contract was made. The seller cannot claim the contract price without giving credit for export duty paid by the purchaser under protest. The purchaser was justified in rescinding the contract due to the seller's refusal to pay the duty.

Citation
[1902] ScotLR 40_234
Parties
Pursuer: The Bowhill Coal Company, Fife, Limited; Defender: A. Tobias
Jurisdiction
Scotland
Judgment Date
18 December 1902
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary
Outcome
appeal dismissed; judgment for defender (purchaser) affirmed
Legal Topics
Allocation of Statutory Duties Under Contract, F.o.b. (free on Board) Contracts, Imposition of Export Duties, Effect of Supervening Legislation on Contract Performance
Contract Law Commercial Law Taxation Allocation of Statutory Duties Under Contract F.o.b. (free on Board) Contracts Imposition of Export Duties Effect of Supervening Legislation on Contract Performance

Case Brief

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Parties

The Bowhill Coal Company, Fife, Limited

Pursuer

A. Tobias

Defender

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary

Legal Issues

  1. 1 Whether, under an f.o.b. contract for export, the seller or purchaser is liable for an export duty imposed after the contract was made.
  2. 2 Whether the seller is entitled to claim the contract price without giving credit for export duty paid by the purchaser under protest.
  3. 3 Whether the purchaser was justified in rescinding the contract due to the seller's refusal to pay the export duty.

Ratio Decidendi

Under an f.o.b. contract for export, the seller is liable for any export duty that must be paid before shipment, even if imposed after the contract was made. The seller cannot claim the contract price without giving credit for export duty paid by the purchaser under protest. The purchaser was justified in rescinding the contract due to the seller's refusal to pay the duty.

Court Disposition

appeal dismissed; judgment for defender (purchaser) affirmed

Orders

  • Pursuers (sellers) must give credit to the defender (purchaser) for sums paid as export duty under protest.
  • Pursuers have been paid in full for coal delivered under the contract.