First National Bank v. Oregon-Washington Railroad & Navigation Co.

136 P. 798, 25 Idaho 58, 1913 Ida. LEXIS 23

Opinions

STEWART, J.

The facts in this case are as follows: The Sprague Sanitary Preserving Company of Clarkston, Washington, and Lewiston, Idaho (hereafter referred to as the preserving company) consigned a shipment of canned goods moving from Lewiston, Idaho, to Waco, Texas, on July 6, 1912, on an order bill of lading to E. F. Drake & Co., at Waco, Texas. Immediately upon the presentation of the goods by the preserving company to the defendant for shipment the company presented the bill of lading to the plaintiff with two drafts signed by the preserving company attached thereto, aggregating the sum of $1,863.55, which drafts were drawn on E. F. Drake & Co., at Waco, Texas, and the plaintiff paid to the preserving company said sum and the bill of lading and drafts were assigned to the plaintiff.

The evidence shows that E. F. Drake & Co. at Waco, Texas, were fruit brokers and commission merchants and had had correspondence with the preserving company with reference to consigning to Drake & Co. the carload of fruit in controversy, and that as soon as the car was loaded the preserving company drew the drafts in question in order to secure ready cash, claiming that the fruit had been sold to Drake & Co. The plaintiff claims that a portion of the goods amounting to $1,863.55 was sold to Drake & Co. at the time they were loaded into the car at Lewiston.

The order bill of lading shows that the appellant received at Lewiston, July 6, 1912, from the preserving company, certain described canned goods. It is also shown by the evidence that the canned goods delivered by the preserving company to the appellant and loaded in the defendant’s cars and consigned to E. F. Drake & Co., Waco, Texas, arrived at Waco the 22d of July and were delivered to E. F. Drake & Co. on the 23d of July, and were so delivered at the request of E. F. Drake, and that at the time of such delivery the bill of lading had been assigned to the plaintiff and the drafts had been drawn by the preserving company and directed to E. F. Drake & Co., Waco, Texas, and made payable to the order of the First National Bank of Clarkston on the arrival of the car of the O. W. R. & N. Co., #10,558, which the evidence shows to be the car that carried the shipment which contained the canned goods as shown in the complaint.

The drafts drawn by the preserving company against E. F. Drake & Co. were transmitted for collection to the First National Bank at Waco, Texas, but the drafts were not paid, and the bill of lading was not delivered. The bill of lading above referred to contains the contract of the railroad company made with the preserving company, and is signed by the Sprague Sanitary Preserving Co., shipper, E. L. Wilsa, agent. The bill of lading is from the Oregon-Washington Railroad & Navigation Company, and is in part as follows: ■

“Received, subject to the classifications and tariffs in effect on the date of issue of this original bill of lading, at Lewiston, Idaho, July 6, 1912, from Sprague Sanitary Preserving Co. the property described below, in apparent good order, except as noted, (contents and condition of contents of packages un known), marked, consigned and destined as indicated below, which said Company agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigns.

“The surrender of the Original Order Bill of Lading properly indorsed shall be required before the delivery of the property. Inspection of property covered by the bill of lading will not be permitted unless provided by law or unless permission is indorsed on the original bill of lading or given in writing by the shipper.....

“Consigned to order of Sprague Sanitary Preserving Co. Destination Waco, State of Texas, County of-. Notify E. F. Drake & Co. at Waco, Texas. Route U. P. c/o C. & S. Ry. Car Initial O. W. R. N. Car No. 10558.

Packages. Description of Articles and Special Marks. Weight.

804 As Canned Goods @ 60 #Ea........48240

40 “ “ “ @100 #Ea........ 4000

52240”

This bill of lading contains this language: “The property described below, in apparent good order, except as noted .... which said company agrees to carry to its usual place of delivery at said destination, if on its road, otherwise to deliver to another carrier on the route to said destination. It is mutually agreed, as to each carrier of all or any of said property over all or any portion of said route to destination, and as to each party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, herein contained (including conditions on back hereof) and which are agreed to by the shipper and accepted for himself and his assigns. The surrender of the original order bill of lading properly indorsed shall be required before the delivery of the property.”

The allegations in the complaint are based upon violations of the foregoing provisions of the bill of lading, in that the company violated the provision, “the surrender of the original bill of lading properly indorsed shall be required before the delivery of the property.”

The evidence clearly proves, and the jury so found, that the car of canned goods covered by the bill of lading was shipped from Lewiston, Idaho, to Waco, Texas, and there delivered to E. F. Drake & Co., the party who was named in the bill of lading and who was to be notified by the railroad company carrying the ear into the city of Waco, Texas, and to whom the evidence shows the Sprague Preserving Company sold the contents of said car, and as payment of the purchase price the drafts in question were issued.

We think there can be no question but that the evidence conclusively shows a delivery to E. F. Drake & Co., and after they were delivered to Drake & Co. the evidence shows that Drake & Co. transferred the warehouse receipt to the last connecting carrier and thereupon redelivered the car of canned goods, but not until after Drake & Co had failed to sell the canned goods, and in an effort to defeat the payment of the drafts at the First National Bank at Waco. Drake knew that the bill of lading with the drafts attached were at the First National Bank before the 23d day of July, 1912, for the evidence clearly shows this in a letter written by Drake & Co. to the preserving company in which .they say: Gentlemen: The First National Bank of this city have two drafts on us from you with bill of lading attached. These drafts we presume are for ear of canned goods you are shipping to us, but as you suggested consigning this car to us, we do not feel justified in paying these drafts until it has arrived and we can get the buyers here started on it. ’ ’ The delivery on the 23d day of July is admitted, so there is no question in this ease hut that there was a delivery to Drake & Co.

Counsel for appellant and respondent disagree as to the questions presented upon this appeal. After examining the record we are satisfied that the action is founded upon the bill of lading and whether the respondent can recover upon the facts of the case; that the other questions raised in the ease are purely incidental and relate to whether the facts show a liability under the law. We will first consider the bill of lading and the liability of the appellant arising out of the facts, which we think disposes of this case.

In the case of First National Bank v. Northern Pac. Ry. Co., 28 Wash. 439, 68 Pac. 965, the supreme court of Washington had under consideration facts very similar to the facts in the present ease, and in that opinion the court very fully reviewed the effect of the bill of lading and the liability of the railroad company, and said: “Primarily, a bill of lading or receipt is not necessary to constitute the contract. The delivery of commodities to the common carrier, with the designation of the person and place of the shipment, is all that is requisite. Custom and the law fixes the responsibility and liability of the carrier. The presumption then is that the consignee is the owner, and without notice to the contrary, the carrier may safely make delivery to him. It seems from an examination of a large number of cases involving the nature of bills of lading made by a common carrier that the custom very generally exists of shippers selling or assigning such bills of lading and receiving payment therefor and advances upon the same. This custom enables the shipper to receive immediately payment from his local bank. The usage materially aids and stimulates trade and commercial transactions. It enables the small shipper or producer to realize upon agricultural products, such as wheat, at the most favorable market prices. In the case of Ratzer v. Burlington etc. R. R. Co., 64 Minn. 245, 58 Am. St. 530, 66 N. W. 988, where a delivery was made without demanding the bill of lading, the court observed: ‘We are of the opinion that on the facts found the plaintiff is entitled to judgment. A vast portion of the produce of this country is moved from the agricultural districts to the commercial centers and the seaboards by the aid of advances made on the security of such bills of lading.....This is well understood by the railroad companies and everyone else.’ ” ■

The court then discusses the result that would follow the adoption of a rule contrary to that announced in the case of Batzer v. Railroad Co., supra, and the reasoning is very convincing. The court then further in the opinion in that case cites the case of Savings Bank v. Atchison T. & S. F. R. Co., 20 Kan. 519, and the following eases are‘also cited in support of the rule: Union Stockyards Co. v. Westcott, 47 Neb. 300, 66 N. W. 419; Walters v. Western etc. R. R. Co. (C. C.), 63 Fed. 391; Gates v. Chicago etc. R. R. Co., 42 Neb. 379, 60 N. W. 583; Furman v. Union etc. R. R. Co., 106 N. Y. 579, 13 N. E. 587; Garden Grove Bank v. Humeston & S. Ry. Co., 67 Iowa, 526, 25 N. W. 761; and the court concludes: “Thus the better reasoning and the weight of authority seem, by the force of general commercial usage, to require that the delivery of commodities be made upon the production of the bill of lading, if one be issued by the carrier. Hutch. Carr., 2d ed., sec. 130b, observes: ‘ The carrier, being thus bound to deliver the goods in accordance with the bill of lading, is, it is said, under obligations to ascertain whether or not a bill of lading was delivered to the shipper, and, if delivered, he must retain the property until it is demanded by one claiming under that title. ’ ’ ’

Many other cases support this rule and many eases hold that the rule announced by the supreme court of Nebraska in the Ratzer v. Railroad Co. case is correct. It is hardly necessary to cite authorities to the general proposition that when a bill of lading is outstanding, the railroad company delivers the goods at its peril, without requiring the bill of lading, and if it so delivers them to someone other than the hona fide holder for value of the bill of lading, it is liable to him for conversion of the goods.

The foregoing authorities state the rule of law- which we believe should prevail in the cases where -the bill of lading provides, as it does in this case, “that the surrender of the original order bill of lading properly indorsed shall be required before the delivery of the property,” and such rule is especially applicable because of such provision contained in the bill of lading, and the determination of this question, in our judgment, determines the case.

The appellant cites no authorities which hold contrary to the above holdings, but relies upon the following cases: Rylands v. Chesapeake Ry. Co., 55 W. Va. 181, 46 S. E. 923; Gulf etc. Ry. Co. v. Pitts & Son, 37 Tex. Civ. App. 212, 83 S. W. 727; Gulf etc. Ry. Co. v. Everett, 37 Tex. Civ. App. 167, 83 S. W. 257; Baumbach v. Gulf etc. Co., 4 Tex. Civ. App. 650, 23 S. W. 693; Wells, Fargo Co. v. Hanson, 41 Tex. Civ. App. 174, 91 S. W. 321; Clark v. Am. Ex. Co., 130 Iowa, 254, 106 N. W. 642.

We have examined these eases and we find that the courts properly state the law in those cases applicable to the facts in the particular cases, and in said opinions have discussed the law where the cause of action was for delay in transportation and in delivery of the property, causing damages, and was not for damages for conversion of a ear of canned fruit delivered without surrender of the original bill of lading at the time of or before the delivery, but such law does not apply to the facts in this case where it is shown clearly that the bill of lading was not surrendered and that the bill of lading itself was a contract between the railroad company and the shipper, and in that bill of lading the defendant company and the shipper agreed to a provision that “the surrender of the original order bill of lading, properly indorsed, shall be required before the delivery of the property.” This provision applies alike both to the railroad company and the shipper and does not apply alone to limitations in favor of the railroad company, and the railroad company is bound by the provisions the same as the shipper, and certainly by this agreement the facts in this case are subject to the rule of law cited, and which this court approves and adopts and applies where the facts are such as in this case.

But whether delivered or not, the bill of lading in this case specifically provides that the surrender of the original order bill of lading properly indorsed shall be required before the delivery of the property, and the evidence shows without question that the railroad company carried the property described in the bill of lading on its road and its connections, in the identical car which was covered by the bill of lading, to Waco, and delivered the same to the party notified, B. F. Drake & Co., and that the bill of lading was not indorsed as required by the terms of the same, and was never delivered to the party to whom the property was delivered, or its assigns, and has remained in the possession of the plaintiff except in its course pursued to collect the drafts involved in this case.

Drake & Co., upon demand for the payment of the drafts, refused to pay the same, although admitting that they had received the carload of said canned goods from the preserving company. Upon this refusal the plaintiff in this case brought this action and seeks to recover from the defendant for the conversion of said property in violation of its contract with the preserving company, in that it permitted B. F. Drake & Co. to get possession of the property before it was paid for, and contrary to the contract of sale, and thereby plaintiff was damaged.

It is immaterial whether before shipment the car of canned goods was sold to Drake & Co., or was shipped to them merely as brokers of the preserving company or anyone else. Drake & Company could not get the bill of lading from the respondent without first paying the drafts on which the respondent advanced $1,863.55, the amount of the drafts.

The trial court instructed the jury very clearly on the law applicable to the facts in this case, and no exceptions were taken to the instructions, and the jury followed the instructions and the evidence, and the damages allowed in this case were clearly proven.

We find no error which justifies a reversal of the judgment. The judgment is affirmed. Costs awarded to respondent.

Ailshie, C. J., concurs.