Canadian Pac. Ry. Co. v. Wieland

226 F. 670, 141 C.C.A. 426, 1915 U.S. App. LEXIS 2241

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 4, 1915
• Docket: No. 2582
• Status: Published

Opinion

GILBERT, Circuit Judge

(after stating the facts as above). [1] It is the contention of the plaintiff that the goods before the time of their destruction had been delivered and accepted by the defendant, as a carriei-, for immediate transportation, that the fact that the goods were destroyed while in the government warehouse, in the exclusive custody of the Belgian customs officials, in no way limits or varies or changes the responsibility of tile defendant, and that it is liable for the goods as an insurer thereof. It is the contention of the defendant that the goods were never at any time before their destruction in its possession, custody, and control, but that, on the contrary, being in the exclusive custody of the Belgian customs officials in the government warehouse of the kingdom of Belgium, they were in custodia legis, and, Being there destroyed without fault on the part of the defendant, it is relieved from liability for their loss as an insurer.

In support of its contention that the goods were not delivered to the defendant, it cites St. Louis, etc., Ry. Co. v. Commercial Union Ins. Co., 139 U. S. 223, 11 Sup. Ct. 554, 35 L. Ed. 154 In that case cotton had been destroyed by fire while in the possession of a compress company. The railway company had never given any bill of lading for it. The cotton had been insured by the owners against loss by fire, and when the cotton was destroyed the insurance companies paid the losses and claimed that the railway company was liable under the contract which that company had made with the compress company to receive the cotton and transport it over its railroad across the Arkansas river to the press of the compress company, a distance of a mile and a half. The insurance companies contended that, by the failure of the railway company under its contract with the compress company to transport this cotton as fast as it came in, the amount of tire cotton became so great as to constitute a- public nuisance, as it was piled up in the compress company’s warehouse, and overflowed into the adjoining streets. The court held that, as the railroad company had issued no bills of lading for the cotton which was destroyed, its failure to furnish sufficient transportation for the cotton to the compress company created no liability in contract or tort to the owners or insurers of the cotton or to any other person. The court said:

“This cotton,- certainly, was in the exclusive possession and contyol 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 there.”

The important distinction between that case and the case at bar is that in the latter case the defendant had, so far as it lawfully could, received the goods in transit and had assumed the direction of their disposition, and by its own act had placed the goods in the warehouse in which they were destroyed.

A case more directly in point is Arthur v. Texas & Pacific Ry. Co., 204 U. S. 505, 27 Sup. Ct. 338, 51 L. Ed. 590, in which it was held that where a railway company has no other place for delivery of cotton than the stores and platform of a compress company,- where all cotton transported by it is compressed at its expense and by its order, its acceptance of and exchange of its own bills of lading for receipts of the compress company passes to it the constructive possession and absolute control of the cotton represented thereby, and constitutes a complete delivery thereof to it, and that the railroad company could not thereafter divest itself of responsibility for due care by leaving the cotton in the hands of the compress company, as that company became its agent.

Another case in point against the defendant’s contention is Southern Railway Co. v. Hubbard Bros. Co., 146 Fed. 31, 76 C. C. A. 489. In that case the defendant, a railroad company, made a contract with a cotton compress company which recited that the railroad company would receive uncompressed cotton for shipment, but for its „ own con-remenee desired to have a portion of the same compressed, and provided that the compress company would receive and receipt for such cotton from the railroad company, or the shippers, compress the same, and load it in cars of the railroad company as directed, and that it should be responsible to- the, railroad company for any loss or damage to such cotton while in its possession. A through shipment of cotton was made from a point in Mississippi to the plaintiff at New York, by way of Birmingham, and thence over the defendant’s railroad. The initial carrier delivered the cotton to the Belt Bine road, which delivered it to the compress company, arid then paid to defendant its share of the freight and delivered to it the compress company’s receipts. The cotton was not delivered by the compress company to the defendant, and was never received by the plaintiff. There was evidence of a custom of the initial carrier to make deliveries of cotton to the defendant at Birmingham in the manner which was pursued in this instance. It was held that the evidence warranted the submission 1o the jury of the question whether the delivery of the cotton to the compress company constituted delivery to the defendant, either because of agency to receive It, created by the contract, or because of the evidence tending to prove a custom.

Upon the agreed statement of the facts it appears that it was the duty of Debenliam, the defendant’s agent, to receive at Antwerp shipments of merchandise coming there in bond for export and intended to be transported by the defendant, and to cause the same to be there embarked. It was not his duty to receive goods for warehousing or storage. If goods were warehoused, it was only for the defendant’s own convenience, and for the reason that it had no available ship ready to receive the goods. The warehouse charges were paid by Deben-ham as agent for the defendant, and we.re not charged either to the. shipper or the purchaser. The correspondence between Debenliam and the shipper in this instance shows that they both had in contemplation a shipment for immediate carriage, and that it was Debenham’s purpose to have the shipment timed with, reference to the sailing day of the steamer. The waybill recited that the shipment was in bond “in transit :o the United States.” The whole correspondence shows that the relation of the defendant to the shipment was that of a common carrier only. It is evident that, the goods would not have been warehoused, but for the fact that the ship was not ready to receive them. When the goods arrived at Antwerp, and Debenliam received the waybill, lie had the right to cause them to be placed a.t once on hoard a ship or on the wharf for loading, or to have them placed in the cus-ios? 'S warehouse, and he had the further alternative o f paying the duty and relieving them from bond. The shipper had wholly parted with his control of the goods, and had placed them in the care and control of the defendant’s agent at Antwerp, subject only to the paramount authority of the customs officials, so long as the goods remained at that place in bond, and until they were loaded on the ship. On June 1, 1901, Debeuham caused the goods to be deposited in- the customs warehouse, and received an acquit de transit. At noon of the same day the ship arrived. Two days later she began to load. Two days after she began loading the goods were destroyed by fire, but before that time Debenham had surrendered the acquit de transit, and had paid the warehouse charges, and had received a remise au depart, authorizing him to take the goods from the warehouse. Upon those facts we think that the goods had been delivered to the defendant and accepted by it for carriage, and that its liability as a common carrier had commenced.

We think it clear that at the time when the goods were destroyed they were not in custodia legis. The defendant was not obliged to place them in the warehouse. It could have so arranged its business as to make the warehousing unnecessary. It placed the goods in the warehouse purely for its own convenience, and it had the right at any time to take them from the warehouse to the wharf for loading, upon the payment of the warehouse charges, charges which it had incurred for its own convenience, and which it was under obligation to defray at its own expense. The defendant quotes from section 4 of Hutchinson on.Carriers:

“If, for example, the private carrier or any other ordinary bailee be robbed of the goods, or if they should be accidentally destroyed by fire or any other calamity, without negligence on his part, the law will excuse him; but if they be taken from a common carrier by force ever so irresistible, less than the public enemy, or if they should be destroyed by fire ever so unavoidable, be will nevertheless be liable for them. He is an insurer of the goods against all losses except those caused by the act of God, the public enemy, the law, the owner, or the inherent nature of the goods.”

But “the law” so enumerated in the exceptions does not comprehend that class of authority which was exercised by the Belgian government, under its treaty, with reference to these goods, for, as we have seen, the defendant was under no obligation to place the goods in the customs warehouse. The custody of the goods by the customs officials of Belgium was a qualified possession, and was solely for the purpose of complying with the International Treaty and securing the observance of customs regulations while the goods were in bond en route to a foreign country. That custody was not inconsistent with a concurrent possession by the defendant. It was not a greater or different custody while the goods were in the customs warehouse than it was while they were on the train in pare of train officials before the defendant received them.

“When property is lawfully taken, by virtue of legal process, it is in the custody of tbe law, and not otherwise.” Gilman v. Williams, 7 Wis. 329, 76 Am. Dec. 219.

The defendant in this connection cites Hutchinson on Carriers (3d Ed.) § 755, as follows: What was meant by the text-writer as to the carrier’s liability for the destruction of goods in transit while in the possession of customs officials is rendered certain by the authorities which are cited to sustain it. These are Parker v. Steamship Co., 74 App. Div. 16, 76 N. Y. Supp. 806, and Howell v. Railway Co., 92 Hun, 423, 36 N. Y. Supp. 544. In the first of those cases the plaintiff arrived at Bremen from .New York on the defendant’s steamer. His truuks were in the baggage room of the steamer. He desired to have them forwarded by slow freight to a town in England, and the defendant agreed to forward them in that way to the designated address. On tlieir arrival in England they were detained in the customhouse and were there destroyed by fire. The court held that the defendant was not liable for the loss, that the transportation of the trunks by the defendant had ended on their arrival at Bremen, and that the defendant’s contract to forward the trunks to England was not the contract of a com-mod carrier, but only a contract to forward, and that it involved no common carrier’s responsibility. In Howell v. Grand Trunk Ry., the plaintiff purchased a ticket from the defendant railway to go to a designated point, and obtained leave to stop over for a day at an intermediate station. He requested that his baggage be unloaded there; bul this was not assented to, and it was carried through to the original point of destination. There it was taken in charge by the United States customs officers, and there it remained until destroyed by fire. It was held that the defendant was not liable for the loss. The court said:

“The parties to the contract of carriage must be presumed to have contracted with the common knowledge of the necessity for customs detention and inspection, and the burden is on the shipper to make provision for the passage of his property beyond the borders of the foreign territory, if non-dutiable. The carrier is wholly powerless to prevent its seizure and detention and he cannot be held liable for its destruction, either in transit or at the place of destination, while in the possession of customs officials, by a fire which he did not occasion, and which he” could not, by any possible act of diligence, have prevented.”

“The properly was not In the possession or under the control oí the de-fondant at the time of the loss; nor was it in any sense the fault of the defendant that it was not so.”

The distinction between those cases and the case at bar is very clear. In the cases cited the defendants had fully complied with their contracts to carry the plaintiff’s baggage to a designated point. In the second case cited that point was Suspension Bridge, on the border line between the United States and the Dominion of Canada. There the baggage was unloaded, and it was taken into the possession of the customs officers of the United States. 'With that act the defendant had nolhing to do. It fully carried out fits contract in hauling the baggage to Suspension Bridge. The baggage was not delivered to the crsiom.s authorities for the convenience of the defendant, and from the lime when the baggage arrived at Suspension Bridge the defendant had no further right of control over it.

The defendant suggests that the controversy involved herein presents in some respects questions which are wholly new. Conceding that to be the case, we are called upon to apply to its determination the settled principles of the law. The shipper of the- goods had parted with the possession thereof under a contract which provided for their continuous carriage to their point of destination. He had the right to rely upon the carrier’s liability as an insurer. He had no notice that at any point en route that that liability would be suspended. He had no notice of a suspension of that liability, and no- opportunity to insure against loss during such suspension. But there was no suspension of liability. The defendant, through its agent, received the waybill of the goods, and the authority to control their disposition. For the defendant’s convenience he elected to store them in the customs warehouse. If the goods had been destroyed while en route to Antwerp, there could be no question but that the carrier in whose .possession they were would have been responsible for their loss. We think it clear that the defendant, which received the goods at Antwerp, is responsible for their loss while in the customs warehouse, for the custody and control of the customs officials over the goods was the same while they were in transit by rail through Belgium that it was after their arrival at Antwerp and while stored in the customs warehouse.

[2] It is contended that the court below erred in ruling that the measure of damages was the value of the goods at their destination, and not their value at the place of their destruction. The defendant admits the general rule, as expressed in section 1360, Hutchinson, Carriers, that:

TRe measure oí damages “is generally the value of the goods at the destination to which he [the carrier] undertook.to carry them, with interest on such value from the time when the goods should have been delivered, deducting, however, the unpaid cost of transportation.”

Bu-t the defendant invokes the exception to the rule as • expressed in Moore on Carriers, page 401, in which it is said:

“And where the contract so provides, or where the special circumstances so require, the market value at the place of shipment may be taken instead of that at the place of destination.”

To support this exception the text-writer cites Lakeman v. Grinnell, 5 Bosw. (N. Y.) 625, and Wheelwright v. Beers, 2 Hall (N. Y.) 391, where a vojrage was broken up at an intermediate port, and it was held that the measure of damages was the difference between the prime cost of the cargo and what it was sold for after the voyage was broken up, and Dusar v. Murgatroyd, 1 Wash. C. C. 13, Fed. Cas. No. 4, 199. In the Lakenran Case goods were consigned to Liverpool, and were burned on board the ship before leaving the port at New York.' The court, in adopting the value of the goods in New York as the measure of damages, was influenced,.as it appears from the opinion, by the consideration that the goods could be immediately replaced at New York and sent forward by another vessel, and that it would be unreasonable to give the plaintiff the profits which he might have made if the goods had not perished. The court said a case could well be imagined in which goods were lost in a port of departure, in which, from an impossibility of procuring other articles of the same kind, or from other causes, the value at the port of destination would furnish the only adequate indemnity to the plaintiff, and'admitted the general rule that, when the vessel has arrived at the port of destination without the goods, the value of tire missing goods at that place is adopted; but it based the decision as to tire measure of damages upon the fact that the ship itself was lost before leaving the port, of shipment, for Slos-son, J., in his opinion said:

“There is no question on the authorities but that the common carrier, who has received goods for transportation and has actually performed the journey or voyage, is, in case of nondelivery of the goods, unless the failure to deliver is excused by the act of God or perils of the soa, liable, as a general rule, for the value or price which they would have brought at the port or place of destination, if they had been delivered according to the contract.”

In Dusar v. Murgatroyd, it was held that, where goods were destroyed on board a vessel in the port where they are shipped, damages must be ascertained by the difference between the prime cost and charges and the sales at the port of shipment, and not by the probable profits if the goods had gone safely to the port of destination. The distinguishing feature in that case, or the “special circumstances” which may have been held to justify an exception to the general rule, >vas that the action was brought at the port of shipment by the consignor, who owned the goods, which were being shipped for sale at a foreign port. In such a case reason might be found for saying that the measure of damages would be the sum for which like goods could be bought in the market at the port of shipment. But in the case at bar the action is brought at the port of destination by the consignee, the purchaser of the goods, and we discover in the case no special circumstances requiring a deviation from the general rule. Hutchinson, Carriers, § 1361, says of the rule:

“Its justice is apparent, when tbe owner of the goods himself is to take them at their destination, there to use or to sell them on his own account.”

That rule was adopted by this court in Northern Commercial Co. v. Lindblom, 162 Fed. 250, 89 C. C. A. 230. See, also, The Nith (D. C.) 36 Fed. 86, 96; The Arctic Bird (D. C.) 109 Fed. 167, 175; The Joshua Barker, 1 Abb. Adm. 215, Fed. Cas. No. 7,547; The Boston, 1 Lowell, 464, 469, Fed. Cas. No. 1,671.

We find no error. The judgment is affirmed.