| Conn. | May 12, 1925
The rights and liabilities of the parties in this shipment are governed by the Federal Bills of Lading Act as interpreted and construed by the Federal tribunals, and by the terms of the bill of lading given to Mersky by defendant as accepted and applied by the Federal tribunals. Adams Express Co. *465
v. Croninger,
While the Federal Bills of Lading Act does not impose in terms the duty upon the carrier to secure the surrender of the bill of lading, it is not obliged under § 8 of the Act to make delivery except upon its production and surrender. If it makes delivery without such production and surrender, it does so at its peril, and if in consequence the shipper suffers a loss, the carrier is bound to indemnify him, and it is held that an action of conversion, not created by the Act but arising out of the obligation of the carrier created by the bill of lading, will lie against the carrier. Pere Marquette Ry.Co. v. French Co.,
The plaintiff was required to prove the delivery of the car of rails by Mersky to defendant and his receipt therefor of the order bill of lading as alleged; the indorsement and transfer of it to the plaintiff for value; the delivery of the car to the Foster Company by defendant without requiring the production and surrender of the bill, and the consequent damage. If the defendant had lawful excuse for such delivery, it was incumbent upon it to allege it and to assume the burden of proving it.
The facts set out in the complaint are not contested except as to the damage caused to plaintiff. The two special defenses are not supported by the finding.
The assignments of error pursued are: (1) The court erred in finding that the plaintiff was a bona fide purchaser of the bill of lading. (2) The court erred in refusing to hold that the bill of lading was spent at the time it was indorsed and turned over to plaintiff. (3) The court erred in refusing to hold that both the plaintiff and Mersky ratified the wrongful delivery to the Foster Company.
The claim that the plaintiff was not a bona fide purchaser, covers both the first and second of these assignments of error, and specifically is, (a) that defendant's delivery to the Foster Company did not cause plaintiff any loss, since it did not cancel Mersky's debt, and, as far as appears, he was able to meet it, and (b) that the goods described in the bill of lading when indorsed to plaintiff had already been delivered to the Foster Company, and the circumstances were such that it must have known that something was *467
wrong with the shipment. The finding fully answers these claims. The plaintiff gave to Mersky its note, which he discounted, and with the proceeds purchased the rails, of which the car lot in question was a part, and upon plaintiff having to pay the note, promised to pay it from the proceeds of the sale of the rails. From time to time plaintiff spoke to Mersky with reference to receiving the proceeds of the sale of the rails from Levinson, and about October 14th handed it the bill of lading in order to trace the car. Plaintiff endeavored to locate the car through the agent of defendant, and on November 24th was informed it had been delivered to the Foster Company. Prior to this date Mersky indorsed the bill of lading in blank and turned it over to plaintiff, with the understanding that the proceeds of the car of rails were to be applied on his indebtedness to it. The consideration for the transfer cannot be questioned. When it was made neither Mersky nor plaintiff knew that the car had been delivered to the Foster Company If they had known of this, we fail to see what difference it could have made in defendant's obligation arising upon this bill of lading The obligation under it never could become satisfied, nor could the bill become spent, until the obligation had been met. The defendant, by delivering the goods without requiring a surrender of the bill of lading, caused Mersky, the consignee of the goods, to suffer their loss, and the plaintiff, through the indorsement of the bill to it, succeeded to the rights of Mersky. Plaintiff did not cancel any part of Mersky's indebtedness to it, but did agree that the proceeds obtained upon the bill should be applied to this debt, and the refusal of defendant to pay the loss resulting from the delivery of this car lot in violation of its contract obligation to Mersky, is the direct loss to the plaintiff of the value of these goods, in reliance upon which in *468
good faith it had agreed to dispose of the goods and apply the proceeds in reduction of the debt owed it by Mersky. The court did not err in refusing to find that the bill of lading had been spent at the time it was indorsed to plaintiff. This was not a finding of a fact, but a conclusion to be drawn from the subordinate facts, if these justified it. These facts show that the obligation arising upon this bill of lading had not been met, and hence the bill could not have become exhausted or spent. The plaintiff is a bona fide holder of this order bill of lading, and the defendant carrier having delivered the goods without requiring its production and surrender, is liable to it for their loss. The plaintiff took the bill of lading as security for its advances to the consignor named in this bill. In such a case the court, in King v. Barbarin, 161 C.C.A. 311" court="6th Cir." date_filed="1917-03-05" href="https://app.midpage.ai/document/king-v-barbarin-8807224?utm_source=webapp" opinion_id="8807224">161 C.C.A. 311, 313, 249 F. 303, 305, holds that "a carrier, by delivering goods to the consignee without the production of the bill of lading, is liable to a bona fide holder of the bill for value — whether by way of purchase or as security for advances — before the delivery of the goods at destination." If the plaintiff had suffered no damage, it, as the holder of the bill of lading, could not maintain its action; for example, if Mersky, who retained the bill of lading, had been paid for the goods shipped, the defendant would not be liable to Mersky or his indorsee (the plaintiff) merely because defendant failed to secure the bill before delivery of the goods. Weinstein
v. Davis (Minn.)
The liability of the carrier under the Federal Bills of Lading Act as amended, is not that of an insurer, but that arising for some default in its common-law duty as a carrier, and is limited by the terms of the *469
Act to "`any loss, injury or damage caused by it or a succeeding carrier to whom the property may be delivered.'"Adams Express Co. v. Croninger,
So the consignor or the holder may by his own negligent course deprive himself of the right to invoke the carrier's negligence in delivering the shipment without requiring the surrender of the bill of lading, the carrier's negligence in these circumstances not being the proximate cause of the loss of the shipment.Fourth National Bank v. Nashville, C. St. L. Ry.Co.,
The final claim of the carrier is that plaintiff and Mersky ratified the wrongful delivery to the Foster Company by the attempt of plaintiff to secure payment for the goods by drawing on the Foster Company by draft and later by offering to transfer to it the bill of lading. Defendant's liability had already arisen for its wrongful delivery, and plaintiff was entitled to secure payment from the Foster Company for the shipment or to dispose of the bill of lading to it. In neither act was there basis for a claim that thereby the wrongful delivery was ratified. Plaintiff's course was an attempt to secure payment for the shipment from the person to whom the goods were wrongfully delivered; had it succeeded in its attempt defendant would have been relieved of its obligation to plaintiff. The defendant should not be permitted to complain of plaintiff's attempt.
There is no error.
In this opinion the other judges concurred.