Nelson Grain Co. v. Ann Arbor Railroad

140 N.W. 486, 174 Mich. 80, 1913 Mich. LEXIS 435

• Court: Michigan Supreme Court
• Decided: March 20, 1913
• Docket: Docket No. 91
• Status: Published

Opinions

Brooke, J.

(after stating the facts). The bills of lading here considered are entirely unambiguous and show conclusively that Botsford & Barrett were the shippers and that the shipments were made to their order.

The evidence of Mr. Nelson, president and manager of the plaintiff corporation, does not in our opinion tend to contradict the bills of lading and (they being unambiguous) if it did so tend it would not be admissible under the authority of Sturges v. Railway Co., 166 Mich. 231 (181 N. W. 706).

The learned circuit judge in rendering judgment for plaintiff seems to have relied upon the case of Forbes v. Railroad Co., 133 Mass. 154. In that case Gallup, Clark & Co. consigned a shipment of corn to Boston to their own order. They sent the bill of lading indorsed with draft attached for the value of the corn to Foster & Co. at Boston. Foster & Co. paid the draft and immediately indorsed the draft and bill of lading to Forbes for an advance to the full amount of the draft. Forbes thereafter held the draft and bill of lading duly indorsed. Some weeks later the defendant carrier delivered the corn for export upon the order of Foster & Co. Foster & Co. did not produce the bill of lading, but represented that it was in their possession. The court held that by the transfer from Foster & Co. Forbes took title as purchaser of the corn, and could maintain the action, in the absence of laches, upon proving conversion by defendant. It was further held:

_ “ It is settled that any misdelivery of property by a carrier or warehouseman to a person unauthorized by the owner or person to whom the carrier or warehouseman is bound by his contract to deliver it is of itself a conversion, which renders the bailee liable in an action of tort in the nature of trover, without regard to the question of his due care or negligence. Hall v, Railroad Corporation, 14 Allen [Mass.], 439 [92 Am. Dec. 783].”

We are unable to see the applicability of the Forbes Case to the case at bar. Here there is no innocent holder for full value of a properly indorsed bill of lading, the failure to demand production of which led the carrier to make delivery of the consignment to one not entitled to receive it. Here the delivery was made to the consignees named in the bills of lading and upon the order of the shipper exactly as, by the terms of the written instrument, the carrier was instructed. The learned circuit judge says:

“ What was done by Botsford & Barrett and the plaintiff amounted to an assignment of the bill of lading to the plaintiff. Even if it be conceded that Botsford & Barrett were the owners mentioned in the bill of lading, yet they had the right to assign the bill of lading to the plaintiff, and had they been present at Ithaca, and made the shipment personally, and then made a regular assignment to the plaintiff, no one would contend that the railroad would be protected in making delivery upon the order of Bots-ford & Barrett, even though it was a genuine order, unless it was accompanied by the original bill of lading.”

Touching these views it is sufficient to say that Botsford & Barrett were not, so far as the record discloses, present in Ithaca, that they did not make the shipment personally, and that they did not make any formal assignment of the bill of lading to the plaintiff. The conclusion, that what was done between Botsford & Barrett and plaintiff amounted to an assignment of the bill of lading to the plaintiff, is, we think, wholly unwarranted by the disclosed facts. The record contains no hint that the defendant knew or had cause to believe that the plaintiff had retained any interest or right of property in the beans. The bill of lading indicated the contrary. An examination of that paper shows that the plaintiff was an utter stranger to the transaction, except that as to the last bill its name appears beneath that of Botsford & Barrett, Shipper, with the prefix “per.” This can have but one meaning, viz., that the beans were shipped by Botsford & Barrett; the plaintiff acting for them in the transaction. Assuming that defendant knew of plaintiff’s ownership of the beans prior to the moment of delivery, the terms of the bill of lading would indicate a sale to Bots-ford & Barrett and an intent to vest them with the title and right of possession thereto.

The bills of lading here in question contained the following language:

“The surrender of this original bill of lading, properly indorsed, shall be required before the delivery of the property.”

It being conceded by defendant that delivery of the beans was made without the surrender of the original bill of lading, it becomes pertinent to inquire what effect these words have upon the controversy.

Hutchinson on Carriers (3d Ed.), vol. 1, § 177, in his text, says:

“The carrier takes the risk of a delivery to the person entitled to the goods by the bill of lading and its indorsements. The consignee named in the bill of lading is presumptively the owner of the goods and must be treated by the carrier as the absolute owner until he has had notice to the contrary; and a delivery to him without such notice will discharge the carrier. Thus, if the consignor would for any reason retain the ownership or control of the goods, he must notify the carrier of such fact; for otherwise the presumption that the consignee named is the rightful owner and entitled to their possession will prevail as against any undisclosed intention which the consignor may have had to the contrary.”

At section 181, vol. 1, the same author says:

“But while the carrier takes the risk of making delivery to the person entitled to the goods by the bill of lading and its indorsements, and should, therefore, be careful to require the person demanding the goods, when such person is another than the consignee, to produce the bill of lading properly indorsed, he will fully discharge his duty in making a delivery without requiring the bill of lading to be presented if delivery is made to the person who is lawfully entitled to the goods. The right of the carrier to demand the presentation of the bill of lading is a precaution of which he may avail himself, for the purpose of avoiding delivery to the wrong person, but which, if he sees fit, he may dispense with; and if delivery is made to the person vested with the right to receive the goods, the carrier will have performed his duty. If therefore the consignee should direct the carrier to make delivery to a third person to whom he has transferred title, and delivery is made in accordance with such directions without requiring the bill of lading to be produced, the failure of the carrier to require its production will place him under no responsibility to a bona fide holder who, after such delivery, has taken the bill of lading from the consignee. And although a bill of lading providing for a delivery to the consignor or his order contains an express provision that the carrier shall require its surrender or production before making a delivery of the goods, such requirement, it is said, will be considered as having been inserted for the benefit of the carrier, and, as between himself and the consignor, cannot subject the carrier to liability for failing to require the production of the bill of lading on making delivery to one to whom the consignor has ordered that the goods shall be delivered.”

An examination of the authorities cited by the writer will show that the text is amply supported.

In 4 Elliott on Railroads (2d Ed.), § 1523, it is said:

, “The rule in regard to the person to whom delivery must be made is very strict. It must be made to the right person, and it seems that neither the fraud nor imposition of any one else nor mistake on the part of the carrier will excuse it from liability, if it delivers the goods to the wrong person. The right person is, ordinarily, the consignee or his authorized agent. But if the carrier delivers to any one, even to the consignee, without the production of the bill of lading, it runs the risk of having to show a delivery in accordance with the terms thereof, and, where a vendor ships goods and takes a bill of lading in his own name or to his order, the carrier cannot safely deliver the goods to any one else unless the bill is indorsed or transferred by him and produced by the person to whom they are delivered.”

Further, in a note to section 1524, the author says:

“That a carrier may be protected in a proper case even if it does not require production of the bill of lading, if it shows it delivered to the right party, see (citing many cases).”

The case of Chicago Packing, etc., Co. v. Railway Co., 103 Ga. 140 (29 S. E. 698, 40 L. R. A. 367), is instructive. The bills of lading in that case contained the same provision that the goods should not be delivered without surrender thereof. They were indorsed and signed by the plaintiff as follows: “Deliver to Hobbs & Tucker, or order, for collection.” Tucker ordered delivery to one Ragan in the following terms:

“E. N. Clark;, Agent: Let N. L. Ragan have car meat on dray track, and I will be responsible for B — L. May 18, 1893. A. W. Tucker.”

The carrier made delivery to Ragan relying upon this order without the surrender of the original bill of lading. The shipper thereupon sued . the carrier for damages caused by a wrongful delivery. The court said:

“If a natural person consigned goods to his own order under a bill of lading which provided that it should be surrendered before delivery could be made, and called in person upon the carrier’s agent at the point of destination, demanded a delivery of the goods, and thereupon received the same, it certainly could not be questioned that, as between him and the carrier, such delivery would be good, and would free the carrier from further liability to him, although the bill of lading may not have been produced and surrendered in accordance with the stipulations therein contained. While in such a case the carrier might not, aa against one who had in good faith and in the due course of business obtained the bill of lading properly indorsed, be protected by a delivery to the original consignor, surely the latter would have no cause of complaint against the carrier. If such a consignor could thus obtain a delivery of the goods to himself in person, what difference, in principle, would it make if, instead of doing this, he, by a written order, directed delivery to another, who obtained the goods upon such order without producing and surrendering the bill of lading. In either case, looking at the transaction with reference only to the consignor and the carrier, the latter would have done all that the former had any right to require of it. In other words, the stipulation in such a bill of lading requiring its surrender upon delivery of the goods is for the benefit of the carrier, and not that of the consignor.”

See, also, Gates v. Railroad Co., 42 Neb. 379 (60 N. W. 583); Nebraska Meal Mills v. Railway Co., 64 Ark. 169 (41 S. W. 810, 38 L. R. A. 358, 62 Am. St. Rep. 183); 6 Cyc. p. 472, and cases cited in note 49.

Whether the stipulation in the bill of lading that surrender thereof shall be required before delivery is considered to be for the benefit of the carrier or the shipper would seem in this case to make no difference, for the plaintiff was not the shipper. Being the owner of the property at the time of delivery to the carrier, plaintiff chose to represent by the contract negotiated with the carrier that Botsford & Barrett were the shippers thereof, to whose order delivery should be made, at the same time neglecting to disclose to the carrier that it (the plaintiff) desired or intended to retain any control over the shipment for its own protection. Defendant had no knowledge or notice of plaintiff’s secret intention. For aught defendant knew, Botsford & Barrett might have paid plaintiff before the shipment was made. Indeed, the terms of the bill of lading negotiated by plaintiff plainly indicated that such was the fact. We cannot escape the conclusion that this loss has come to plaintiff (if a loss there be through the financial inability of Botsford & Barrett) by reason of its own carelessness in failing to make the shipments to its own order, or in some other manner notifying the defendant that it desired to retain its title to the shipments until paid for the same. Having made delivery of the shipments to the parties named in the bills of lading upon the order of Botsford & Barrett as directed in the bills, we think the defendant should be held to have performed its full duty in the premises.

Defendant requested the court to make findings of law as follows:

“Under the evidence in this case, when defendant received the beans in controversy and issued its bills of lading therefor, and the same were accepted by plaintiff, the beans became (as between the plaintiff and defendant) the property of Botsford & Barrett, and the plaintiff cannot complain of a delivery of the same by the defendant or its connecting carrier to or on the order of Botsford & Barrett.

“ The fact that the original bills of lading were not surrendered to the delivering carrier at the time of the delivery of the beans will not make the defendant liable, for the reason that the beans were delivered on the order of Bots-ford & Barrett and the evidence does not show any notice to defendant that the title to the beans was not to pass to Botsford & Barrett, or that the same were not to be delivered on their order.”

These findings should have been made.

The judgment is reversed, and there will be no new trial.

Steere, C. J., and McAlvay, Kuhn, Ostrander, and Stone, JJ., concurred with Brooke, J.