74 Colo. 247 | Colo. | 1923
delivered the. opinion of the court.
THE action is for damages against the representative of a carrier company for misdelivery, or failure to make proper delivery, of a shipment of a carload of hay. The hay was delivered by the plaintiff to the Denver & Rio Grande Railroad Company at Fruita, Colorado, March 4, 1918, as the initial carrier, to be transported to Fort Worth, Texas, the connecting carriers being the Missouri Pacific and the M. K. & T. Railroads. The shipment was on consignor’s order bill of lading, with directions endorsed thereon to notify Harris Brothers Grain Company, the purchaser. The plaintiff drew a draft on the grain company for the invoice value of the hay, and, through its agent, The First Bank of Fruita, Colorado, sent the draft, with the bill of lading attached thereto, for collection to the Continental Bank of McKinney, Texas. The bill of lading was not then, or thereafter, endorsed by the plaintiff in blank or otherwise, and no one was ever authorized by it to endorse, negotiate or transfer it. On March 8, the Harris Brothers Grain Company telegraphed the plaintiff, that as it had to divert all hay from Fort Worth — the destination named in the bill of lading — to have the McKinney Continental Bank accept a new bill of láding showing diversion to other points in Texas. Plaintiff
This made it a straight bill. Thereafter the bill of lading was returned to Harris Brothers Grain Company, and by it returned to the Continental Bank, and still later the draft and bill were returned to the First Bank of Fruita, May 7, 1918. The draft was never paid by Harris Brothers Grain Company, nor has plaintiff ever been paid for the hay. The shipment reached Gregory, Texas, April 23, and was delivered by the railroad company there, on that date, to the Harris Brothers Grain Company, without asking for, or taking up, the original' bill of lading. Neither the commercial agent of the Missouri Pacific nor Rigdon, the agent of the M. K. & T. Railroad, connecting carriers, had any knowledge or information of the contents of the telegraphic correspondence hereinabove set forth, .at the time the original bill of lading was presented
The question for decision is: Was the carrier justified in making delivery of the hay on straight consignment to the Harris Brothers Grain Company, having no knowledge of the contents of the telegraphic correspondence and acting only on the fact that the Company had in its possession the original bill of lading, for which it paid nothing, which was not endorsed by the shipper in blank or otherwise, the grain company not being the consignor or consignee and not being the owner of the hay? Still further condensed, and otherwise phrased, the question is, was the Harris Brothers Grain Company, having physical possession of an unendorsed bill of lading, under the facts stipulated, lawfully entitled to the possession of the hay?
The plaintiff in error, defendant below, has filed an opening and reply brief exhaustively discussing the law applicable to bills of lading of an interstate shipment before and after the passage of the bills of lading statute, commonly known as the Pomerene Act. The object of this discussion, we take it to be, is to advise the court that before the passage of this act, open bills of lading were not attended by all the consequences, or subject to all the rules, of negotiable instruments, while the object of the Pomerene Act was to make them, in legal effect, as much like negotiable instruments as the nature of the transaction thereby evidenced is susceptible of. As the shipment in question is an interstate shipment, .the rights of the parties are to be determined under this federal act, as interpreted by the Supreme Court of the United States. It is our duty to conform to decisions of that tribunal con
To simplify the issues and the discussion, the defendant, in his opening brief, concedes: “1. That defendant as initial carrier in operation of the Denver & Rio Grande Railroad is liable if the diversion constituted misdelivery. 2. That for the purpose of the transportation contemplated by the original bill of lading, the diversion constituted delivery. 3. That if under the circumstances of diversion, there was misdelivery, such misdelivery was conversion of the shipment.”
Dearned counsel for both parties say that this leaves for consideration merely the issue of whether or not, in the circumstances surrounding the diversion, there .was a misdelivery of the shipment.
That an order bill of lading under the Pomerene Act is a document possessing substantially the same attributes of negotiability as commercial paper is admitted by both parties. The defendant says that in the practical operation of common carriers, and in making delivery of shipments under order bills of lading, perhaps in a majority of instances, the carrier delivers without the production of the bill of lading endorsed or unendorsed. That may be true, and that circumstance may have due weight with the courts in determining such questions as are now before us. The rights o,f the parties, however, in the final analysis, are measured by the statute law and, so far as this court is concerned, by the decisions of the Supreme Court of the United States interpreting the same. The provision in order bills that their surrender, properly endorsed, shall be required before delivery of the property, is for the benefit both of the shipper and the carrier. A valid delivery may be made by the carrier without a production of the bill, but in such a case the carrier acts at its peril. The provisions of the Pomerene Act which are material here, are sections 8, 9, 10, 22, 27, 28, 29, 30, 31
Defendant contends that before the Pomerene Act was passed, under the weight of authority, the delivery of this bill of lading to the Harris Brothers Grain Company was justified. This court, in Florence & C. C. R. R. Co. v. Jensen, 48 Colo. 28, 108 Pac. 974, and the Court of Appeals in Rocky Mountain Fuel Co. v. Sparling Coal Co., 26 Colo. App. 260, 143 Pac. 815, have decided to the contrary. See also the French & Company Case, infra. If the doctrine now is different, it is because the Pomerene Act, as construed by the ultimate authority, makes it so, and upon this specific inquiry we now enter.
Under this act there is the same substantial distinction between a straight bill of lading and an order bill of lading as' there was before it became a law. Section 3 of the act defines an order bill of lading. Any nonnegotiable provision therein is void unless, upon its face and in writing, the shipper agrees thereto. Sections 9 and 10 seem to be the ones upon which the decision of this case must be made. They read:
“Section 9. Persons to whom carrier may deliver goods. A carrier is justified, subject to the provisions of the three following sections, in delivering goods to one who is — •
(a) A person lawfully entitled to the possession of the goods, or
(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.”
“Section 10. Liability of carrier in case of delivery of goods to improper person.
Where a carrier delivers goods to one who is not law
(a) Had been requested, by or on behalf of a person having a right of property or possession in the goods, not to mak¿ such delivery, or
(b) Had information at the time of the delivery that it was to a person not lawfully entitled to the possession of the goods.
Such request or information, to be effective within the meaning of this section, must be given to an officer or agent of the carrier, the actual or apparent scope of whose duties includes action upon such a request or information, and must be given in time to enable the officer or agent to whom it is given, acting with reasonable diligence, to stop delivery of the goods.”
Construing these two sections together we say that, •unless the Harris Brothers Grain Company was lawfully entitled to the possession of the hay under the facts hereinabove recited, the initial carrier is liable to the plaintiff for its value, because the delivery was otherwise than as provided in subdivisions “b” and “c” of section 9. The burden of proof, therefore, is upon the defendant to show that the grain company was lawfully entitled to possession of the hay at the time the connecting carrier, through its agent, diverted the same from Fort Worth, or when delivered at Gregory, Texas. The defendant says that, under the decision of the Supreme Court of the United States in Pere Marquette Ry. Co. v. French & Company, 254 U. S. 538, 41 Sup. Ct. 195, 65 L. Ed. 391, this diversion at Fort Worth, Texas, by Kigdon, made at the request of the grain company, which held the unendorsed bill of lading, constituted a delivery which fully discharged and satisfied the obligations assumed by the carrier thereun
“Under the Uniform Bills of Lading Act, a carrier is justified in delivering the goods to the person in physical possession of the order bill of lading properly endorsed, unless it has information that such person is not lawfully entitled to them.”
In the French Case the order bill of lading was in possession of the purchaser, properly endorsed by the consignee in blank, and so the holder came clearly within subdivision “c” of section 9. The court in its opinion said:
“When in the interests of commerce the Federal Uniform Bills of Lading Act, (the Pomerene Act), extended to bills of lading certain characteristics of negotiable paper in order to protect a bona fide purchaser of such bills, it was deemed proper to afford also certain protection to the carrier. This was done, in part, by providing in § 9 that the carrier would be justified in making delivery to any person in possession of an order bill of lading duly endorsed, with certain exceptions to be noted below.”
The court also said:
“Under § 9 it is physical possession of the bill which is made a justification for delivery of the goods by the carrier. Under that section it is immaterial in what capacity the person holds possession of the bill, and also whether he holds it lawfully or unlawfully, so long as the carrier has no notice of any infirmity of title.”
“The only exception to the rule justifying the carrier in making delivery to one in possession of an order bill of lading endorsed in blank, which is urged as applicable here, is where the carrier has information that the person in possession of the bill is not lawfully entitled to the goods.”
The converse is necessarily true, that the carrier is not
The defendant, however, further contends that delivery, both at Fort Worth and at Gregory, was made without any information possessed by the carrier at the time, that the grain company was not lawfully entitled to possession of the hay, whereas, if it had such information, it concedes that delivery was not justified. Defendant says that since, by section 29 of the Eomerene Act, a bill may be transferred by the holder by delivery, accompanied by an agreement, express or implied, to transfer the title of the bill for the goods represented thereby, and by section 33, when such a “bill is transferred for value by delivery, and the indorsement of the transferor is essential for negotiation, the transferee acquires a right against the transferor to compel him to indorse the bill, unless a contrary intention appears,” the facts of this case prove that there was an intention to, and in fact, there was a transfer by the plaintiff, through its agent, by de
In complying with the request of the grain company for a diversion of the shipment, the plaintiff authorized the Continental Bank, which held for collection the bill of lading with the draft attached, to secure a diversion, which the bank did by delivering possession of the order bill, unendorsed, to the grain company, which, in turn, made the request of the connecting carrier. The carrier did not take up the bill and issue a new one, but made the notation for the diversion, and, in connection therewith, used the language which changed the consignee. Therefore, defendant says the damage to plaintiff was caused by its own act in delivering, through its agent, this bill, and thus enabling that agent by its wrongful conduct to change the consignee, to plaintiff’s injury. Defendant also says that change of diversion could only be had on surrender of the bill. It is to be remembered that the connecting carriers were not aware of the telegraphic correspondence. The only information or knowledge they possessed of the contract of the parties was from the unendorsed bill of lad
A further contention of the defendant is that, even conceding that the agent of the connecting carrier was not justified in changing the order bill into a straight bill, still the plaintiff was in possession, through its agent, the
We think the judgment of the trial court was right and it is affirmed.
Mr. Justice Burke, sitting for Mr. Chief Justice Teller, and Mr. Justice Sheafor concur.