Collins v. Seaboard Air Line Railway Co.

120 S.E. 824, 187 N.C. 141, 1924 N.C. LEXIS 244

• Court: Supreme Court of North Carolina
• Decided: January 22, 1924
• Status: Published

Opinion

Adams, J.

It is unquestionably true as a general rule that delivery of goods by the seller thereof to a common carrier for transportation to the buyer is prima facie a transfer of title, and such goods while in the carrier’s possession are presumed to be the property of the consignee; but if before delivery to the consignee the seller notifies the carrier not to deliver the goods the carrier’s duty then depends upon the actual facts as to whether the relation between the consignor and the consignee was such that delivery to the carrier constituted a transfer of title. 10 C. J., 228, sec. 317; Moore on Carriers, 188; Aydlett v. R. R., 172 N. C., 47; Gaskins v. R. R., 151 N. C., 19; Mfg. Co. v. R. R., 149 N. C., 261; Stone v. R. R., 144 N. C., 220. Such relation, it has been said, may be determined not only by the terms of the bill of lading but by the intention' of the parties as expressed hy their dealings and by all the circumstances of the transaction. Emery's Sons v. Nat. Bank, 18 A. R. (Ohio), 299.

The Madison Lumber Company delivered the lumber in question to the Georgia and Florida Railway Company and obtained from it an open bill of lading in which the Dunham Company was named as consignor and the Charlotte Lumber Company (afterwards acquired by the plaintiff) as consignee, and the appeal is based on the contention (the name of the Madison Company not appearing in the bill of lading) that the Dunham Company was the consignor, that neither the Dunham Company nor the consignee demanded a redelivery of the lumber, and that the defendants were without authority to divert or return the shipment. The contention of the defendant is diametrically the opposite. So the immediate question is this: When the Dunham Company refused to pay for the lumber and to accept the bill of lading, were the defendants justified in returning the shipment to the Madison Company upon its demand? Embraced in this question are two others: (1) May the seller retain title to goods shipped upon an open bill of lading in which his name does not appear and in which the buyer is called the consignor and the person to whom the buyer has contracted to sell is called the consignee, in the absence of a stipulation in the bill of lading that title shall be retained? (2) If so, is there sufficient evidence that the title was returned by the Madison Company?

Eminent authorities in other jurisdictions maintain the general doctrine that when a draft is attached to a bill of lading, whether the bill of lading is made out in the name of the consignor or consignee, title to goods usually does not pass to the consignee upon delivery to the carrier. The consignee cannot refuse to pay the draft and at the same time claim title to the property. Hopkins v. Cowen, 47 L. R. A. (Md.), 124; Spence v. N. and W. Ry. Co., 29 L. R. A., 578; Bank v. Jones, 55 A. D. (N. Y.), 290. See, also, note to Ramsey & Gore Man. Co. v. Kelsea, 22 L. R. A., 428.

There is an elaborate discussion of the question in Greenwood Grocery Co. v. Canadian County M. and E. Co., 2 L. R. A., N. S. (S. C.), 79, in which the material facts were as herein stated. The defendant, a corporation resident in Oklahoma, contracted to sell and deliver to the plaintiff at Greenwood, South Carolina, 250 barrels of flour at $4.50 a barrel. The defendant consigned the flour to the plaintiff and sent to- the bank of Greenwood a draft on the plaintiff, with the bill of lading attached; but the draft called for payment at the rate of $5.50 a barrel instead of $4.50, the contract price. The plaintiff tendered to the bank the contract price and demanded the bill of lading, but the bank refused to accept less than the full amount of the draft and withheld the bill of lading. The plaintiff then brought suit for damages and attached the flour which was in the possession of the railroad. The defendant’s position was that when the flour was delivered to the carrier, consigned to tbe plaintiff, it ceased to be the property of the defendant and became the property of the plaintiff, subject only to the right of stoppage in transitu, and that the attachment must therefore fail.

The Court held that the effect of a bill of lading issued by the carrier on the title to the property as between the consignor and the consignee is a question of fact to be determined, not only by the terms of the paper itself, but by the intention of the parties as expressed by dealings with each other, and that when a draft for the price of the shipment is drawn on the purchaser with the bill of lading attached, the title does not ordinarily pass to him until the draft is paid. In support of this position the Court adopted the following language of Lord Justice Cotton: “So, if the vendor deals with or claims to retain the bill of lading in order to secure the contract price, as when he sends forward the bill of lading with a bill of exchange attached, with directions that the bill of lading is not to be delivered to the purchaser till acceptance or payment of the bill of exchange, the appropriation is not absolute, but until acceptance of the draft, or payment, or tender of the price, is conditional only, and until such acceptance or payment or tender, the property in the goods does not pass to the purchaser; and so it was decided in Turner v. Liverpool Docks, 6 Exch., 543; 20 L. J. Exch., N. S., 393; Shepherd v. Harrison, L. R., 4 Q. B., 196; Ogg v. Shuter, L. R., 1, C. P. Division, 47. But if the bill of lading has been dealt with only to secure the contract price, there is neither principle nor authority for holding that in such a case the goods shipped for the purpose of completing the contract do not, on payment or tender by the purchaser of the contract price, vest in him. When this occurs, there is a performance of the condition subject to which the appropriation was made, and everything which, according to the intention of the parties, is necessary to transfer the property is done; and in my opinion, under such circumstances, the property does, on payment or tender of the price, pass to the purchaser.”

The reasoning and conclusion of the Court are fortified by numerous precedents which are set out in the opinion and need not be cited here. In addition the following authorities may be examined: Bmery’s Sons v. Nat. Bank, supra; note to Chandler v. Sprague, 38 A. D., 419; Nat. Bank v. Dearborn, 15 A. R. (Mass.), 92; Grove v. Brien, 8 Howard, 429; 12 L. Ed., 1142, and note; Means v. Bank, 146 U. S., 620; 36 L. Ed., 1107; Mason v. Cotton Co., 148 N. C., 492; Buggy Corporation v. R. R., 152 N. C., 120; Myers v. R. R., 171 N. C., 190.

The plaintiff insists, however, that the principle enunciated in these cases is not pertinent for the reason that the Madison Company, at the request of the Dunham Company, consigned the lumber to the latter’s customer and that the title thereby vested in the consignee named in the bill of lading. We do not assent to tbis conclusion. Tbe bill of lading did not necessarily determine tbe contract between the consignor and tbe consignee, and if treated as an admission or declaration of tbe consignor’s purpose at tbe time sucb admission or declaration was subject to rebuttal and explanation by other circumstances attending tbe transaction. Emery’s Sons v. Nat. Bank, supra. The Madison Company sold tbe lumber, not to tbe plaintiff, but to tbe Dunbam Company, and tbe consignment to tbe plaintiff did not affect tbe relation existing between tbe vendor and tbe vendee. Nat. Bank v. Shaw, 61 N. Y., 283; Minor v. R. R., 32 Conn., 91.

In view of tbe doctrine stated and maintained by tbe foregoing authorities we cannot concur in tbe plaintiff’s argument that it was not open to tbe defendants to show that tbe title to tbe lumber in question was retained by the vendor and did not vest in tbe Dunbam Company. Tbis being so, tbe remaining question is whether reversible error was committed in tbe trial.

Among tbe exceptions addressed to tbis question only those relating to tbe charge require discussion; the others, we think, are clearly untenable.

His Honor instructed tbe jury that if a custom prevailed among lumber dealers in that territory to tbe effect that lumber delivered to tbe railroacf should remain tbe property of tbe shipper until paid for, or that tbe shipper (Madison Company) retained tbe original bill of lading issued by tbe railroad and tbe shipper having tbe bill of lading in its possession demanded of tbe railroad tbe return of tbe lumber, they should answer tbe first issue “Yes.” To tbis instruction tbe plaintiff excepted on the ground that there was no evidence of such custom, and tbe retention of tbe bill of lading and tbe demand for tbe return of tbe lumber did not warrant an affirmative answer to tbe first issue. His Honor further told tbe jury to answer tbe first issue “No”-if they found from tbe evidence that tbe original bill of lading was delivered to tbe Dunbam Company by tbe Madison Company or by tbe railroad and was attached to tbe draft sent to Charlotte Lumber Company for collection.

Tbe plaintiff contended that tbe original bill of lading was obtained by tbe Dunbam Company and forwarded with tbe draft drawn on tbe plaintiff, and tbe defendants contended that tbe bill of lading sent to tbe plaintiff was “spurious” and that tbe shipper retained tbe original in its possession.

As we understand tbe evidence tbe plaintiff does not deny that tbe shipper sent for collection to a bank in Albany its draft on tbe Dunbam Company with tbe bill of lading attached or that tbe shipper demanded of tbe defendants a return of tbe lumber. These undisputed facts with tbe jury’s finding that tbe original bill of lading was retained by the shipper were sufficient to support the answer to the first issue, even if there was not adequate evidence of a general custom. It will be noted, however, that the third issue refers to a custom between the seller and the purchaser, and his Honor’s instruction was evidently understood by the jury to apply to the previous dealings between these parties. 17 C. J., 520, sec. 87.

After careful and deliberate consideration of all the exceptions we find

No error.