22 A.D.2d 215 | N.Y. App. Div. | 1964
These are appeals and cross appeals from an order entered February 28,1964. Plaintiff, the Chase Manhattan Bank (herein Chase) appeals from so much of the order as denied its motion for summary judgment against defendant lino Kaiun Kaisha, Ltd. (herein lino), and lino cross-appeals from that part of the order which denied its motion for summary judgment against Chase and alternatively for judgment over against its codefendant, the Nissho Pacific Corporation (herein Nissho). Nissho cross-appeals from the denial of its motion for summary judgment against Chase and lino.
Nissho, a domestic corporation and wholly-owned subsidiary of the Nissho Company, Ltd., a Japanese corporation, had a series of transactions with Amkor Corporation (Amkor) prior to 1961 whereby it purchased hog grease from Amkor, also a domestic corporation, for export. Amkor would obtain the grease from domestic producers. As between Amkor and Nissho, it is claimed credit was usually involved in the various transactions. In January, February and March, 1961 Nissho entered into eight contracts with Amkor for a total purchase of inedible tallow from Amkor of 2,185 metric tons f. o. b. named ports or vessels. All but 635 tons were to have been delivered by April, 1961. There is no dispute that Amkor was in default in April on prior monthly deliveries. By a written agreement dated February 28, 1961 Nissho confirmed its purchase from Amkor Corporation of 250 metric tons of inedible choice white
Amkor, in attempting to obtain the grease, contacted Swift and arranged to purchase the grease from it. May 2, 1961, Swift wrote to several parties, including lino’s agent at Chicago, United States Navigation Company, Inc. (Navigation) concerning the loading of the hog grease. The letter noted “ We will require Mate’s receipts for both lots.” The lots were described as one having been sold to Amkor and the other to another firm not here involved. May 5, 1961 by teletype Amkor advised Nissho that it had sold the grease to Nissho on an f. o. b. vessel basis and that Amkor would not do the forwarding on this transaction, that Swift wanted to know who the forwarder ivas to process the export declaration. Amkor requested Nissho to attend to the export formalities, stating that Nissho was the shipper. Nissho stated the- name of its forwarder, Arthur J. Fritz and Company of San Francisco, California.
The application by Amkor for the advance from Chase, dated May 18, 1961, states: “ [w]e hereby apply this date for an advance of $67,194.90 to be made under our General Loan and Collateral Agreement on file with you and agree to repay the
Thereafter Chase instituted suit against Nissho and lino. Its complaint contains three causes of action. The first cause is against Nissho only and charges conversion of the goods and seeks money damages; the second, also against Nissho only, charges breach of contract, in that Nissho received the bill of lading of merchandise and became obligated to Chase for $67,522.68 which it has refused to pay; the third cause, against lino only, charges conversion and seeks money damages. lino’s answer, after pleading denials, and admitting the issuance of a negotiable bill of lading to Nissho on May 8, 1961, contains several affirmative defenses. It pleads that it acted in accordance with the requirement of the applicable statutes of the United States, the “ Carriage of Goods by Sea Act” (U. S. Code, tit. 46, § 1300 et seq.) and title 49 of the United States Code (§ 81 et seq.), and with the requirements of the laws and
Two things may be noted before further discussion.
Neither Swift nor Amkor, then customers of Chase, have been brought into this action, nor has any testimony been elicited from them. On June 14, 1962, this court affirmed a denial of a motion for summary judgment brought by Nissho against Chase. Since that time there have been extensive examinations of the various parties before trial, and certain matters are now not in dispute.
Chase did not give lino or Nissho any notice of its alleged interest until some time after the issuance of the on board bill of lading, nor did the draft presented to Nissho for payment reveal any special interest of Chase in the merchandise. Chase was aware as early as April 26, 1961, that Amkor was unable to meet its obligations, and admitted it had to assume there were possibilities of some defaults by Amkor, but did not inquire whether Amkor had defaulted on prior contracts with Nissho. There was no limitation placed by Chase on Amkor’s sale to Nissho of this shipment.
Swift, after receiving the advice from Chase, notified lino through its agent that the merchandise would be delivered to
The bill of sale, dated May 9, 1961, from Amkor to Nissho for 327.78 metric tons, recites that it is “ F. O. B. Muneshima Maru from Chicago May 9th.” “ The general rule is that upon a sale ‘ f. o. b. the point of shipment, ’ title passes from the seller at the moment of delivery to the carrier, and the subject of the sale is thereafter at the buyer’s risk (Standard Casing Co. v. California Casing Co., 233 N. Y. 413, 416; Disch v. National Sur. Co., 203 App. Div. 723.) Ordinarily, delivery to the carrier is delivery to the buyer.
The terms for payment appearing in the bill of sale were “ net cash on first presentation of accompanying sight draft.” The question arises whether setoff is a proper form of payment in light of that provision and the earlier provisions which appeared in the confirmation orders.
In Foreign Trade Banking Corp. v. Gerseta Corp. (237 N. Y. 265) defendant on October 21, 1919 entered into a contract with Raw Silk Co. to purchase 250 bales of raw silk at an agreed price of $8.65 per pound. Payment was to be by cash or trade acceptances. Raw Silk arranged with plaintiff to finance the deal by a letter of credit and the goods were shipped from China under a bill of lading in plaintiff’s name. When the goods arrived they were released by plaintiff to Raw Silk under so-called trust receipts with title to remain in plaintiff. Defendant was entirely unaware of these arrangements. July 29, 1920, Raw Silk sold 20 bales of silk to defendant who receipted therefor as the property of Raw Silk. On the same day plaintiff wrote defendant inclosing trade acceptances, invoices, etc. Defendant refused to pay, claiming a right of setoff on certain claims against Raw Silk though such claims had not matured at the time the silk was actually delivered but had matured when the action was begun. Defendant asserted it dealt with Raw Silk as principal. From a judgment on a directed verdict in favor of plaintiff, defendant appealed. In reversing and directing a new trial, the court pointed out “ [i]f the agent sells goods in his own name, having possession of the goods, the right of setoff which might be asserted against the agent may be asserted against the undisclosed principal” (p. 271). And this is so even though the sale is “ a cash sale and the purchaser, when he obtained the goods, did not intend
Under chapter 28 of title 46, “ Carriage of Goods by Sea Act ” of the United States Code (§ 1300 ei seq., eff. April 16, 1936), and more particularly section 1303, after .receiving goods into his charge the carrier “ shall, on demand of the shipper, issue to the shipper a bill of lading ”, etc. (subd. [3]). It is expressly provided that nothing in chapter 28 “ shall be construed as repealing or limiting the application of any part of .sections 81-124 of Title 49 ” (subd. [4]). Under the sections referred to bills of lading are governed by their provisions. An order bill is negotiable (U. S. Code, tit. 49, § 83) and a carrier is justified in delivering the goods to one lawfully entitled thereto (ibid., § 89). Chase urges that these goods were wrongfully delivered by lino, that section 90 of title 49 applies, and lino is liable to Chase.
Section 90 provides, in part: “ [w]here a carrier delivers goods to one who is not lawfully entitled to the possession of them, the carrier shall be liable to anyone having a right of property or possession in the goods if he delivered the goods otherwise than as authorized by subdivisions (b) and (c) of section 89 of this title ”. The subdivisions referred to justify a carrier in delivering such goods to “ (b) The consignee named in a straight bill for the goods, or (c) A person in possession of an order bill for the goods, by the terms of which the goods are deliverable to his order; or which has been indorsed to him, or in blank by the consignee, or by the mediate • or immediate indorsee of the consignee. ’ ’ Here the bill of lading was in proper form and delivery as made would be warranted unless other limitations apply.
Section 90 further declares, though the carrier deliver goods as above authorized, he shall be liable if prior thereto he “ (a) [h] ad been requested, by or on behalf of a person having a right of property or possession in the goods, not to make such
Nissho & Co., Ltd., the parent company of Nissho, by its fixture note, dated March 22, 1961, had reserved space on the Muneshima Maru for the shipment of hog grease. For all practical purposes in the context of this operation, and in light of the general course of dealings between Amkor and Nissho, and Nissho and Nissho & Co., Ltd., Nissho and its parent corporation may be considered as one to the extent that Nissho did not usurp its authority or wrongfully pre-empt the space reserved.
Amkor received title to the merchandise from Swift and intended to, and did, pass title to Nissho. Nowhere in the record before us does it appear that Amkor claims a reservation of title or a .security interest. Chase clearly knew, by its own admission, of Amkor’s financial difficulties at least as early as April 23, 1961, including the possibilities of defaults by Amkor, yet beyond its direction to Swift apparently it did nothing. Certainly it did not advise Nissho or lino of its claimed interest prior to the issuance of the bill of lading. The initial mate’s receipt bore no indication of Chase’s interest, and the mate’s receipt of May 12, 1961, was presented by someone to the mate for signature after the vessel left Chicago and while in transit. It is that receipt upon which Chase necessarily places great reliance. Presumably this document was obtained by or in behalf of Swift, because a reference appears thereto in its letter of May 16, 1961 to Chase.
Swift, however, by its letter of May 2, 1961, notified Navigation, lino ’’S agent, that it sold 335 metric tons for the account of Amkor to be delivered to Muneshima Maru, and its bill of sale dated May 9, 1961, reflects such sale to Amkor. Thus, Swift had no further interest in or authority over the goods. Meanwhile, on May 5, 1961, Amkor in its teletype conversation with Nissho had re-emphasized its sale of the grease to Nissho, that Amkor would not do the forwarding or shipping and informed Nissho that Swift wanted the name of Nissho’s forwarder. Obviously Swift and Amkor intended to part with
It must be noted that under the Carriage of Goods by Sea Act, a bill of lading is to be issued only on demand of the shipper (U. S. Code, tit. 46, § 1303; Poor, Charter Parties, § 64). A bill of lading ‘ ‘ serves three distinct purposes in connection with the carriage of goods (a) as a receipt for the goods, (b) as representing the contract of carriage, (e) as a document of title, that is, taking the place of the goods themselves for the purpose of sale, pledge, etc.” (Poor, Charter Parties, § 59; 13 C. J. S., Carriers, § 122 et seq.).
Generally, a receipt merely acknowledging the delivery of goods is not a contract at all, it is merely preliminary to a bill of lading unless the parties so intend (Luckenbach S. S. Co. v. American Mills Co., 24 F. 2d. 705; cf. R. L. Rothstein Corp. v. Kerr S. S. Co., 21 A D 2d 463) in which case the law fixes the rights and liabilities of the parties (see 13 C. J. S., Carriers, § 121 et seq.). But where a receipt is delivered after shipment under a prior contract, it "will not supersede the agreement under which the shipment was made (ibid.; cf. R. L. Rothstein Corp. v. Kerr S. S. Co., supra). Bad faith or negligence cannot be charged to these defendants who were unaware of Chase’s interest. Farmers & Mechanics’ Nat. Bank v. Logan (74 N. Y. 568) cited by Chase, is not applicable. In that case not only was the bill of lading issued to plaintiff but other documents as well. Plaintiff placed restrictive notations on the bill of lading. 'When the defendants purchased the wheat from one Brown they did not ask for any evidence of title. Had they done so they would have learned of the restrictions. Under the facts of the case there was no general ownership in Brown and defendants were charged with constructive notice of the contents of the bill. In this case there was full ownership—■ first in Swift, then in Amkor, and duly transferred to Nissho. Other cases cited may also be distinguished. Chase by its own inaction as to lino and Nissho permitted the present situation to develop. Nor did Chase actually advance any money until May 18, 1961, eight days after the issuance of the bill of lading and almost 10 days after the issuance of the initial mate’s receipt. When the bill of lading was issued Chase had at most a contemplated future interest, conditioned upon a loan which it could refuse to make,
Accordingly, the order appealed from should be reversed, on the law, the complaint dismissed, and summary judgment granted the defendants, with costs.
Breitel, J. P., Rabin, McNally and Steuer, JJ., concur.
Order, entered on February 28, 1964, unanimously reversed, on the law, with $30 costs and disbursements to defendants-appellants-respondents, the complaint dismissed and summary judgment granted to the defendants.