Bosworth v. Chicago, M. & St. P. Ry. Co.

87 F. 72, 30 C.C.A. 541, 1898 U.S. App. LEXIS 1769

• Court: Court of Appeals for the Seventh Circuit
• Decided: February 25, 1898
• Docket: Nos. 442, 452, 453, and 454
• Status: Published

Opinions

WOODS, Circuit Judge

(after making the foregoing statement). If Hie facts were simply that tinder the agreement of 1892, and in accordance with the custom which had grown up, cars from the receiver’s road were taken by the terminal association and placed upon its tracks, and permitted to remain there until the receiver, at the request of the consignee, should make out and deliver to the terminal association new waj bills showing a particular destination, it would perhaps be true, as contended in behalf of the interveners; that the responsibility of the receiver for the cars, with their contents, which were destroyed, had not ceased, because the waybills under which they could have been transferred had not been made out. But, besides the fact of the custom, the undisputed evidence is that shipments of barley originating on the Chicago, Milwaukee & St. Paul Railroad, including the consignments in dispute, were made to or by way of East St. Louis in order that the cars should come into the possession of that association for transfer in pursuance of an understanding amounting to an agreement between the assoeiátion and the consignees that the association should hold the cars on its tracks, and afford other facilities about its yards at East St. Louis, until the consignee of a car should determine and give notice to what point the transfer should be made.. That agreement was equivalent to a specific direction by the consignee upon the receipt of each car by the terminal association that the car should be held for further orders; and' in that situation, whatever otherwise might have been his duty, the receiver was under no obligation to notify the consignee of the arrival of a car, and it is not material whether such notice was given or not. The delivery to the terminal association was complete, and no delay in making out new waybills, or in sending junction notices to the owners of the cars, if owned by other companies, could be of force to show a continued legal or constructive possession by the receiver. The consignees, whether buyers of the grain or agents of the shippers, it is well settled, had authority, in the absence of notice to the contrary, to direct what disposition should be made of the cars on their arrival at East St. Louis, and the legal result is the same as if the terminal company’s possession and detention of the cars had been with the consent or by direction of the interveners themselves. In view'of the custom which prevailed, and of the agreement between the terminal association and the consignees of barley at St. Louis, the liability of the receiver as carrier ceased once the cars had been placed upon the terminal tracks. From that time the question was not whether the placing of the cars upon its tracks by the terminal association operated to transfer the liability of a carrier from the receiver to the terminal association, but was whether the liability of a bailee for hire, or as warehouseman, was on the receiver, or on the terminal association. It is doubtless true, in a general sense, that the shipper of goods, or the owner of goods shipped, is entitled to the common-law liability of the carrier until the goods shall have reached their destination; but that right, it must be clear, does not exist when the course of transportation is not to be continuous, as when, to the knowledge and with the consent of the shipper, there must be on the way a place and period of storage; and, when the right exists, it is one which the shipper or his agent, the consignee, may waive, and in this case it was waived by the consignees when they agreed and directed that the cars and contents should be held on the terminal tracks to await their specific orders for transfer. If the original destination was St. Louis, and was so intended by the shippers, no notice of any restriction upon the authority of the consignees to change the destination was given; and when by their direction the course of transit was broken or suspended the liability of the carrier raised, and under the facts, as they appear, the liability of bailee commenced, on the part cither of the receiver or of the terminal association, and the question is, on which? It does not solve this question to say (hat the action of the terminal association, under its contract with Ihe receiver to break up trains and to remove the cars to'certain tracks, did not constitute a delivery. Under that contract, and under the custom which had prevailed, if the proof went no further, it is conceded that the terminal association would have been under obligation to obey the orders of the receiver with respect to the cars; but when, in addition to that contract and the custom, it is shown that the terminal association was under a separate agreement with the consignees (to which the receiver was not a party, and of which it does not appear that he had knowledge) to hold on its tracks all cars consigned to them, until they should give notice of the desired transfer, a radically different case is shown. Under that agreement it was not material, nor was it contemplated, that the terminal association should know of the final destination of any car, or of its contents, until the lime for transfer should come. The purpose of the agreement was to leave the destination undetermined until the last. No liability as common carrier could attach to the terminal association until a forward movement or transfer of the car should be ordered; and there being, as already explained, no question of liability as a carrier j the question of formal delivery, as affecting the existence of such liability, or its transfer from one company to the other, was in no sense; involved. Whether (he receiver, either in ignorance of the agreement of the association with the consignees, or for other reason growing out of the custom of business between ihe two companies, supposed himself to be in some sense responsible for the consignments in question, is not material. Neither is it important, if true, that the terminal association undertook to furnish terminal or yard facilities which it was the duty of the receiver’s company to provide;. If otherwise there would have been such a duty on the receiver, lie was relieved of the duty iu respect to these cars by force of the agreement between the consignees and the terminal association. To a consignee who has provided a place for the receipt and storage of his goods a carrier is certainly under no obligation to afford like faeiUlies; and if, by reason of an independent contract, the carrier has a right to make delivery or to store goods in the same place provided by the consignee, the carrier does not on that account remain responsible io that consignee for the safety of his goods after depositing them in that place. These consignees having bargained with the terminal association to hold their cars upon its tracks, the tracks became theirs for that purpose, just as much as otherwise they would have been the tracks of the receiver under his agreement with the terminal association; and, the cars having been placed upon those tracks, the receiver’s possession and responsibility ceased, as they would have ceased if the cars had been placed on private tracks of the consignees; and whether waybills had been handed over, or remained in the possession of the receiver, could be of no possible significance.

The principles of law underlying these propositions, if they are not to be regarded as elementary, are well established and familiar, and are quite in harmony with the opinion in Mt. Vernon Co. v. Alabama G. S. R. Co., 92 Ala. 296, 8 South. 687, and other cases to which reference has been made. See, also, Pratt v. Railway Co., 95 U. S. 43. While it is conceded that ordinarily there must be a continuous liability as common carrier upon somebody until the goods have arrived at their destination, manifestly the rule does not apply when, as here, the shipper, through his agent, the consignee, has consented to an interruption of the course of transit, and to the holding of the goods meanwhile by a bailee of his own selection. The supposed difficulty with the proposition that the terminal association was still in possession, because it did not know that these cars were for St. Louis, nor to whom they were consigned, nor w'hether they might not be intended for the Wiggins Perry Company, and in the usual course of business could not know until waybills had been delivered to it, is not substantial. There is no evidence that the association did not in fact know that the cars were for consignees in St. Louis for whom it had agreed to hold cars. The evidence show's that sometimes the agents of the association at the instance of consignees called for cars for which no waybills had been requested of the receiver "by the consignees. I,f the information had been deemed important, it was easy to obtain it from the consignees and their agents, and doubtless from the agents of the receiver, without waiting for the time of transfer, when, customarily, waybills were called for and delivered. The information, however, was not in fact important, because until the particular destination of a car had been determined by the consignee the responsibility of the association as bailee was only for ordinary care, and could not be greater or less whether the name of the consignee or the destination of the car were -known or unknown. u Indeed, the association, under its contract with the receiver, was under the same liability to the receiver, if the receiver remained liable to the owner; and on no possible supposition or theory is it perceived that its liability could be affected by its knowing or not knowing whether particular cars came within the scope of its agreement with the consignees at St. Louis. Besides, it wras not a part of the agreement that the terminal association would hold for the consignees cars received upon its tracks, which it knew to be, or when it knew them to be, so consigned. Such a limitation upon the scope of the agreement is not even suggested by the evidence, would be in itself unreasonable, and presumably was not in the mind of either party. Even under the agreement with the receiver, the actual possession and physical control of the cars passed immediately upon arrival to the terminal association; and, if consigned to parties for whom the association had agreed to hold them, there is no reason suggested for continued liability of the receiver, in any character, except the lack of the mere formality of making out and delivering to the terminal association a waybill, which, in the course of business, could not be made out until the consignee, in his own pleasure, should give the necessary diredion; and, if tliat had been done, the terminal association would have become liable, as a carrier, to make an immediaie transfer to the place, or in tin* direction, of ultimate destination. In other words, on the theory that the terminal association’s liability to the consignees or shippers could arise only upon receipt, in the usual course, of waybills from the receiver, it could never have become liable as bailee under its agreement with the consignees to hold the cars for them, and could have Incurred liability only as a carrier to make transfers as ordered. It is evident, moreover, that the receiver was not bound to .make out new waybills, and might have avoided this formal objection to his discharge from liability, if he had known of the agreement of the terminal association with the consignees, by de livering or tendering the original waybills on the arrival of the ears, or at a later time to the terminal association; but that, again, would have been only a. formality, without substantial effect upon the relations or rights of the parties, and therefore was not necessary. It is perhaps true that, if the responsibility of the receiver had not ceased, the owners, whether consignees or shippers, would have liad their election lo sue the receiver for 'a breach of contract as bailee, or ihe terminal association for negligently causing the injury; but. having themselves entered into an understanding with the terminal association whereby it was to hold the goods for them, they necessarily waived any right to look further to the responsibility of the receiver; and, upon the desíruction of their property through the fault of the terminal association in exposing it to what the master has characterized as a veritable fire trap, they had, upon the facts disclosed, and presumably have yet, a clear right of action against that association upon its contract with them; and in such an action, if brought, the association could hardly be heard to say that no liábiliiy had arisen under lhat contract because it had not received waybills, or did not know to whom the cars had been consigned.

If it appeared that the receiver had knowledge of the agreement between the terminal association and the consignees, the plain, if not necessary, inference, would he that it was merely for the convenience of the parlies that the receiver did not give the original waybills, or copies, to the terminal association upon the arrival of cars, but waited until the consignees had determined the final destination, and then made out new waybills; and, if it be assumed that the receiver was ignorant of that agreement, it is no less clear that the terminal association and the consignees, solely for their own convenience, continued, according to the custom, not to call upon the receiver for waybills until by the determination of the consignees the cars were to be forwarded; and the legal consequence should be and is the same as if the receiver had possessed full knowledge of the situation, or, if there he a difference, it is in the receiver’s favor. The principle involved is well illustrated, upon a converse state of facts, in the case of St. Louis, I. M. & S. Ry. Co. v. Commercial Ins. Co.. 139 U. S. 223, 11 Sup. Ct. 554. There the owners of cotton destroyed by fire, and the railroad company which was sued, were, as here, in separate contract relations with the Union Compress Company, which, like the terminal association here, held the goods as bailee either for the owner or for the railroad company. Pursuant to a custom which had grown up for the convenience of all parties, the railway company had been in the habit of giving to the owners of cotton, in exchange for the receipts of the compress company, through bills of lading, before the cotton had been loaded upon the cars, and had been accustomed to give the compress company notice of the fact of loading, with direction in each instance to ship the cotton on the railroad by a route and to an address named; but in this case no bill of lading had been given, and, before loading, the cotton was burned. The railroad company was charged with a negligent failure, though often requested by the compress company, to furnish transportation according to its contract with that company; and one of the questions in the case was how far the railway company’s liability in the action was affected by the fact that it had issued bills of lading for other cotton, which formed a part of the accumulated mass which was burned in the street, — no "waybill having been given for the 340 bales for the destruction of which the suit was brought. “This cotton, certainly,” says the opinion, “was in the exclusive possession and control of the compress company. - The' railway company had not assumed the liability of a common carrier, or even of a warehouseman, with regard to it; had given no bills of lading for it; had no custody or control of it, and no possession of it, actual or constructive; and had no hand in placing or keeping it where it was.” And, speaking directly in respect to the effect of the issuing of bills of lading upon the company’s liability for cotton covered thereby, the court said:

“There is nothing else in the ease which has any tendency to show that the railway company had or exercised any control or custody of the cotton, or of the place where it was kept by the compress company, before it was put upon the cars by that company. * * * The evidence warranted, if it did not require, the inference that the bills of lading were issued merely for the convenience of all parties, and with no intention of making any change in the actual or legal custody of the cotton until it was so loaded. California Ins. Co. v. Union Compress Co., 133 U. S. 387-415, 10 Sup. Ct. 365. Upon the facts of this case, it may well be doubted whether the liability of the railway company as a common carrier began before the cotton had been received upon its cars, and had thereby come into its actual and exclusive possession and control.”

In California Ins. Co. v. Union Compress Co., referred to above, in respect to a similar issue of bills of lading it is said:

“At most, the railroad companies, by acquiring the receipts of the plaintiff and issuing bills of lading for the cotton, took only constructive possession of it;, and the plaintiff, retaining actual and physical possession of it, did not lose any element qf possession necessary to give it the right to effect insurance for its, own benefit.”

So, bere, upon the' facts stated, the nondelivery of waybills by the receiver to the terminal association, in any view, can constitute evidence only of constructive possession, and, since in that respect a waybill is less significant than a bill of lading, should not, in view of the agreement between the consignees and the terminal association, be deemed to be controlling, or even persuasive, evidence of continued possession, even constructive, on the part of the receiver, and of consequent responsibility for the safe-keeping of the cars. Two things are necessary .to the beginning of liability as a carrier, namely, delivery (that is io say, a transfer of the physical possession of the goods) and shipping directions, while to the initiation of liability merely as a bailee for hire notice of ulterior destination is unimportant, and only possession of the goodsis essential. And it is on this distinction that upon a delivery thereof into the possession of the terminal association the liability oi' the receiver ceased, and that association, if any one, became responsible for such cars and coutents as were covered by its agreement with the consignees, whether it had or had not received notice of the ultimate destination of particular cars.

It is conceded that a railroad company is responsible for the cars of another company in use upon its road, under the same rule of liability as for the goods carried therein; and it follows that, not being responsible in these cases for the contents of the cars of the Chicago, Milwaukee & St. Paul Eailway Company, the receiver is not responsible for the loss of the cars themselves.

The agreements and the custom under which cars were transferred at East St. Louis, of course, had no application to the case of the Carr, Ryder & Engler Company, and the decree in favor of that company was right. .No cessation in the course of carriage was contemplated, and, by the rule that the liability of one carrier iu a continuous transit does not cease until the liability of the connecting carrier begins, the receiver must be held responsible for the loss of the goods of that company. Though in physical possession, under its agreement with the receiver, of the car in which the goods were being transported, the terminal association had not become responsible as a carrier therefor, because it had not been put in possession of a waybill or other form of information on which it could proceed with the carriage. In respect to that car, no interruption in the course of transit having been contemplated or authorized either by the shippers or by the consignees, it may be said that the receiver, as one of the connecting carriers, was under the double duty — it would perhaps be proper to say as agent for the shipper — to deliver possession and to communicate shipping directions to the next carrier; and that duty, in one aspect, not having been performed, his liability as carrier had not ceased.