Smith Co. v. Marano

Citations

• 267 Pa. 107
• 110 A. 94
• 10 A.L.R. 697
• 1920 Pa. LEXIS 818

Syllabus

<p>Contract — Sales—“C. I. F.” contract — Definition—Words cmd phrases — Act of May 19,1915, P. L. 518 — Freight—Insurance—Delivery — Passing of title — Bill of lading — Sight draft.</p> <p>1. The letters “O. I. F.” are abbreviations of the words “cost, insurance and freight” and when used in connection with commercial quotations, signify that the price to be paid for goods will include all charges to the port of destination.</p> <p>2. Where the parties to a contract use the initials “O. I. F.” and agree that the price quoted and accepted includes “the cost of said goods, the cost of obtaining the customary insurance thereon and freight charges” to the port of destination, the title to the goods passes to the buyer upon the seller’s delivery of them to the carrier. If the goods are lost at sea after such delivery, it is the buyer’s loss, and he must pay for them.</p> <p>3. In such case the buyer cannot assert that, under rule 5, section 19, of the Pennsylvania Sales Act of May 19, 1915, P. L. 543, the goods were never delivered to him. If the price had not included insurance, such a claim might well be urged, but reading the contract as a whole, as it must be read with the item for insurance included in it, a “different intention” on the part of the buyer is disclosed from that contemplated by rule 5. If it was the intention of the parties that the property in the goods should not pass to the buyer until at the port of destination, he had no interest in the goods until they reached such port, and the provision with regard to insurance was entirely meaningless and mere surplusage.</p> <p>4. Where a bill of lading under a “O. I. F.” contract is made out to the seller or his order, and immediately endorsed by him in blank and attached to a sight draft drawn upon the buyer, the seller’s intention is merely to retain property in the goods to secure performance by the buyer of his promise to pay for them; and the buyer is not, by the express words of section 20 and sectio