McEwen v. Jeffersonville, Madison, & Indianapolis Railroad

Elliott, J.

The -contract of shipment, which is the basis •of the -complaint, is contained in the bill of lading, by which the appellee acknowledged the receipt of the flour from Jones & Co. and agreed to deliver it to Comstock & Co., at the -regular station at Indianapolis, on payment of freight “-and presentation of duplicate 'hereof” The latter •clause, which we have italicised, was inserted in the hill of lading by the appellee’s agent, at the instance of Jones & Co. The reason for which was, as alleged in the complaint, that Jones & Co. had previously contracted the flour to Comstock & Co., to he delivered on cars on the appellee’s railroad, and to he paid for-on the receipt of the bill of lading. Comstock & Co. had in the meantime become insolvent, and Jones & Co. did not intend that the flour should pass to their possession until it was paid for. This they intended to guard by the Insertion -of a clause in the bill of lading, making it a condition to the delivery of the flour that Comstock & Co. should first present to the appellee the .duplicate bill of lading. Jones & Co. -did not forward the ■-duplicate .to Comstock & Co., but transferred it by indorsement, with a draft drawn on the latter for the price of the flour, which they negotiated with the appellants, by whom at, with the hill -of lading attached, was forwarded to Indianapolis for collection. Comstock & Co. did not pay the .draft on presentation, and consequently the bill of lading was not delivered to them; and, therefore, they could not present it to the appellee; but,the latter .delivered the flour without its presentation.

*374 Comstock & Co. were the consignees- o-f the flour, and', in the absence of any condition being annexed to- the delivery, would have been entitled to its possession on its arrival at Indianapolis, by paying the freight. The question, therefore, as to the sufficiency of the complaint depends upon-the proper meaning and legal effect of the clause of the bill of lading, “and presentation of duplicate hereof.”

It is contended by the appellee’s counsel that this- clause in the bill of lading must be regarded as having been inserted for the benefit of the-carrier, as a means of identifying the-consignees,-that the railroad company was responsible for the delivery of the flour to- Comstock & Co., the consignees; and that in- delivering it to them without1 the presentation of the duplicate bill of lading; the only risk incurred was that of the proper identity of the persons' named as consignees. No direct authority is cited in support of this proposition; but it is claimed that it stands upon the same footing as the other provision in the bill of lading, “upon payment of freight,”' and it is insisted that it is settled by the authorities that this latter provision in bills of lading is always- regarded as having been inserted' for the benefit of the carrier; which he may disregard in the delivery of the goods- to-the-consignee and look to th© consignor for the freight. But this- proposition is too broadly stated, and not sustained by the cases: cited. In Collins & Timberlake v. The Union Transportation Co., 10 Watts, 384 , the goods were shipped by E. & D. Gratz, commission and forwarding merchants, for Collins & Timberlake, who were merchants in Lexington, Kentucky, and the owners of the goods, which were consigned to- Hutchinson & Leslie, a commission and forwarding house in Pittsburgh, and to be delivered to them “upon the payment of freights.” The goods were carried by The Union Transportation Company and delivered to Hutchinson & Leslie without the payment of the freight, who forwarded them to Collins <55 Timberlake, and they paid the- freight to Hutchinson & Leslie. The-.latter became insolvents The Union- Trans* *375 portation Company then sued Collins & Timberlake for the freight, and it was held that they were liable. It is said in the opinion of the court, “that the stipulation in a bill of lading, for delivery on payment of freight, is introduced for the benefit of the consignor,' or the party for whom the consignee is agent,” and that “if the agent should be faithless, the loss should fall on those who trusted him, and they ought to bear it.”

Barker v. Havens, 17 Johns. 234 , is also cited. In that case the owner of goods shipped them on the plaintiff’s vessel, to be carried from NewYorkto Liverpool,to be delivered to C., the consignee, he paying freight, &e. The master delivered the goods to the consignee without receiving the freights, which the consignee subsequently refused to pay. The suit was brought against the consignor, the owner of the goods, and he was held liable for the freight. But it was said by Spencer, C. J., who delivered the opinion of the court, that he should be clearly of opinion, “that if it appeared that the goodswere not owned bythe consignor, and were not shipped on his account, and for his benefit, the carrier would not be entitled to call on the consignor for freight.” This, upon principle, would seem to be the proper rule in such cases. If the owner consigns the goods, for his own benefit, to his agent, and the latter refuses to pay the freight, though the carrier is not bound to deliver the goods to him until the freight is paid, still the owner of the goods should be liable. But if the consignee is the owner of the goods, and they are shipped for his benefit, it is his duty to pay the freight, and if it is so stipulated in the bill of lading, the earlier must look to him alone for the freight.

Shepard v. DeBernales, 13 East, 565, is cited in both the foregoing cases as a leading case on this subject, and accords with the opinion expressed above.

But the stipulation that the goods were to be delivered to Comstock & Co. upon the presentation of the duplicate bill of lading, does not rest on the same- foundation as that for the payment of freight. It is true that an unconditional *376 consignment of goods to a consignee by name is prima facie evidence that he is the owner and entitled to the possession of them, but it is not conclusive, and in many cases the consignee is but the agent of the consignor and receives the goods for his benefit. It is the right of the shipper, or consignor, in naming a consignee, to subject the delivery of the goods to him to any condition deemed proper by the consignor; and if, upon the arrival of the goods at the place of destination, the consignee does not comply with the condition, the carrier may discharge his liability as such by storing the goods in a proper warehouse, subject to the order of the shipper. In such a case the carrier is the agent of the shipper, and his primary duty is “ to observe the instructions of his principal; and when he disregards them, he voluntarily assumes a responsibility by which he must content himself to abide.” Johnson v. The N. Y. Central R. R. Co., 83 N. Y. 610 .

In this case, the stipulation in the bill of lading that the flour should be delivered to Comstock & Co. upon the presentation by them of the duplicate bill of lading, was inserted at the instance of Jones & Co. for their benefit and protection. It constituted a condition to the delivery of the flour to Comstock & Co., that they should' first present the duplicate bill of lading to the appellee, and without which the latter was not authorized to deliver the flour to them. The duplicate bill of lading was delivered to Jones & Co. by the agent of the appellee; it could not be in the possession of Comstock & Co. until it was delivered or transihitted to them by or through Jones & Co.; and until it was received by them they were not authorized to receive the flour. By the contract of sale, Comstock & Co. were to pay for the flour on presentation of the duplicate bill of lading; and as they had become insolvent, care was taken to have the bill of lading, with a draft for the price of the flour, presented to them before the arrival of the flour at Indianapolis. The draft was not paid, and the bill of lading was not, therefore, delivered to them; and if the appellee *377 had observed the condition annexed to the delivery of the flour, the appellants, as the assignees of Jones & Co., would have been protected from loss. The loss resulted from the wrongful delivery of the flour by the appellee, without requiring the production of the duplicate bill of lading. The delivery was in violation of the instruction of the consignor, and the appellee must suffer the consequences.

But it is contended that under the contract between Jones & Co. and Comstock & Co., as stated in the complaint, the right of property in the flour vested in Comstock & Co. as soon as it was placed on the appellee’s cars at Columbus, and that they were, therefore, entitled to its possession on its arrival at Indianapolis. We do not think so. Had the bill of lading stipulated for the delivery of the flour, under the contract of sale, to Comstock & Co. unconditionally, on its arrival at Indianapolis, the right of property would undoubtedly have vested in them, subject only to the right of Jones & Co. or their assigns of stoppage in transitu, before delivery. But as between Jones & Co., the consignor, and the carrier, it was the privilege of the former to annex a condition to the shipment and delivery of the flour to Comstock & Co. by which the former would retain the control of the possession. It is conceded that if the shipment had been made subject to the order of Jones & Co., though intended to be applied to the contract with Comstock & Co., the latter could not have claimed possession without the order of Jones & Co.; and we think that precisely the same result was effected by the stipulation that Comstock & Co. should present the duplicate bill of lading before receiving the flour, and then withholding the bill of lading from them until the flour should be paid for. See Angeli on Carriers, 424, § 511. The discount of the draft by the appellants and the assignment and delivery to them of the duplicate bill of lading by Jones & Co. amounted to a sale of the flour to the appellants, in trust, to be delivered to Comstock & Co. if they paid for it on presentation of the draft and duplicate bill of lading, or in case they refused, *378 then to sell the flour and pay the draft. Allen v. Williams, 12 Pick. 297 ; The Bank of Rochester v. Jones, 4 N. Y. 497 .

F. T. Hord, for appellants. S. Stansifer, T. A. Hendricks, O. B. Hord, and A. W. Hendricks, for appellee.

It is claimed, however, that when Comstock & Co. accepted the draft, they were entitled to the possession of the flour. By the terms of the contract, as stated in the complaint, the draft, it being accompanied by the bill of lading, was payable on presentation, and Comstock & Co. were not entitled to three days of grace; and the error of the appellant’s agent in allowing that time before protesting the draft for non-payment did not entitle Comstock & Co. to receive the flour without the duplicate bill of lading. The appellants were secure in their lien on the flour so long as they withheld from Comstock & Co. the duplicate bill of lading, if the appellee had. not violated the stipulation requiring the production of the duplicate before the delivery of the flour.

The third paragraph of the answer was manifestly bad. It admits, in effect, that the agent who signed the bill of lading was the appellee’s station agent at Columbus, where the flour was shipped, with authority to receive and forward freights, which necessarily included the power to make and sign bills of lading and receipts for freights shipped at that point. It was the right' of the shipper to name the consignee and annex such conditions as he deemed proper to the delivery to him of the goods shipped; and the fact that the agent was furnished blank bills of lading which did not specify any condition to the delivery of goods shipped, could not limit the power of the agent in that respect.

Judgment reversed, with costs; and the case remanded, with directions to the circuit court to overrule the demurrer to the complaint and sustain it to the third paragraph of the answer.