9 F. 129 | U.S. Cir. Ct. | 1881
No technical objections'have been raised as to the form of any of the pleadings in this case, nor has the case been strictly argued on the facts as they appear by the pleadings. The difficulty is that the second and third pleas are not special pleas, stating the particular facts, and amount to no more than the general denial of the first, on which issue has been joined. Of course, if the bill of lading “was given, executed, and signed without authority from this defendant,” and the demurrer admits this, there can be no recovery in any view of the case; hut the allegation amounts to no more than that of the first plea, that the company “did not contract, undertake,” etc. Nor is the statement contained in these pleas, that the cotton was never delivered to the company, anything more than this general denial of the first plea; for neither of the pleas admiis the bill of lading to have been signed by an agent of the company who would have Leen authorized to sign it if the cotton had been delivered, although that important fact has been assumed in the argument. The allegation of these pleas, that the bill of lading was “false and fraudulent,” is a mere conclusion of law, based upon the other allegations that it was issued without authority, and that no cotton was delivered for transportation. The court understands from counsel on both sides that there was an agent of the defendant company at Jackson authorized to sign bills of lading when cotton was actually delivered to him, or the company’s other agents, for transportation, — the defendant contending that this was a special agency arising only on actual delivery of cotton, while the plaintiff treats him as a general agent of the largest powers; that this man Chiles, either by collusion with this agent or by false representations to him, procured him to sign the bill of lading in controversy without any aet
It will be seen, from this statement of the facts and those contained in the pleadings, that the question is whether or not a common carrier is liable for damages sustained by the indorsee of a bill of lading, issued by its agent, binding it to deliver merchandise never in fact delivered to the carrier for transportation, where there is an allegation of special damage sustained by reason of the fact that the indorsee has advanced money on the faith of a receipt of the goods by the carrier, as expressed in the bill of lading. That the plaintiffs believed this cotton was in the hands of the carrier, as certified by its agent, under a contract to deliver it to the order of Chiles, there can be no doubt. I cannot see that it is material whether this agent trustingly confided in the misrepresentations or promises of Chiles, or whether he fraudulently conspired with him to do the wrong. The question is, who shall suffer the loss, the railroad company or the plaintiffs ? If I may use the language of Mr. Justice Field:
“ The question involved is one so often unfortunately raised in courts of. justice as to which of two innocent parties is to suiter by the dishonest dealing of a third, and the only course open to a court in such case is to ascertain upon which of the parties the loss is cast by the operation of the rules of law applicable to the case, and decide accordingly. In this action the question is one of considerable mercantile importance, and I have taken time to consider the authorities applicable to it, but the legal result of the facts has always seemed and now seems to me plain.” Glyn v. E. & W. India Dock Co. 5 Q. B. D. 129,132.
But, notwithstanding this seeming confidence, the judgment of that learned court was, as the one I am about to give may be, reversed on writ of error, and the case is, though not precisely like this, very instructive here. The shipper and consignee received from the master three bills of lading, — or rather one bill of lading in three parts, as is sometimes customary, — marked
It seems to me, with all deference, that it is a misapprehension of
And these considerations cannot be overlooked or overborne by the supposed benefits of having the commercial world supplied with an assurance against inconvenience in their dealings, not with the carrier, but each other. To illustrate by this case, it is plain that the Bank of Madison, when it discounted the draft and took the bill of lading, could have known, being in the same town, by sending a messenger to the agent, depot, or warehouse of the company, that this was a false bill of lading. So, although these plaintiffs in New York could not so readily have ascertained that fact, they could have protected themselves by refusing to accept the drafts until the cotton had arrived, or until by telegraph they had assured themselves of the existence of the cotton. 16 Am. Law Reg. (N. S.) 1. They both, no doubt, trusted more to the ordinary honesty of human nature and the particular honesty of Chiles, than they did to this bill of lading, or
Mr. Justice Willes said, in a case involving a fraudulent dealing with a bill of lading, that—
“Arguments founded upon the notion that the court is to pronounce a judgment in this case which will protect those who deal with fraudulent people are altogether beside the facts of this case and foreign from transactions of this nature. To attempt such a task would be idle; to accomplish it, impossible. We must apply our minds to the facts of the case before us, and see what is their true bearing, and what is the proper conclusion we ought to arrive at in respect to the litigant parties, without considering what may hereafter happen to persons who omit to use diligence and consequently to have the misfortune to be overreached.”
And this was emphasized, when the case went to the house of lords, by Lord Chancellor Hatherley, in language I forbear to quote, only because it requires space to present it properly. Meyerstein v. Barber, 2 C. P. 38, 61; S. C. 4 H. L. 317, 332. The holder of the first two parts of a bill of lading, who had made advances on it, sued, in that case, the holder of the third part, who had in good faith, relying on the bill of lading, purchased the goods, and recovered their value, notwithstanding the argument just alluded to, which is the same suggested by the averments of the declaration and pressed in argument here. The principle established is that because others may deal fraudulently with bills of lading furnishes no ground for the court, in the supposed interest of commerce, to disregard the ordinary rules governing the contract of the parties in order to protect those who
The rule contended for would make bills of lading in this respect negotiable, like bills of exchange or other representations of money, which they are not. 2 Daniell, Neg. Inst. (2d Ed.) §§ 1727, 1751. Mr. Justice Strong puts this claim for them at rest when he says:
“ The function of that instrument is entirely different from a bill or note. It is not a representation of money used for transmission of money, or for the payment of debts, or for purchases. It does not pass from hand to hand, as bank notes or coin. It is a contract for the performance of a duty. True, it is a symbol of ownership of the goods covered by it — a representation of those goods. * * * Bills of lading are regarded as so much cotton, grain, iron or other articles of merchandise. The merchandise is very often sold or pledged by the transfer of the bills which cover it. They are, in commerce, a very different thing from bills of exchange and promissory notes, answering a different purpose and performing different functions. It cannot be, therefore, that the statute which made them negotiable by indorsement and delivery, or negotiable in the same manner as bills of exchange and promissory notes are negotiable, intended to change totally their character, put them in all respects on the footing of instruments which are the representations of money, and charged the negotiation of them with all the consequences which usually attend or follow the negotiation of bills and notes. Some of these consequences would be very strange, if not impossible, such as the liability of indorsers, the duty of demand ad diem, notice of non-delivery by the carrier, etc., or the loss of the owner’s property by the fraudulent assignment of a thief.” Shaw v. Railroad Co. 101 U. S. 557, 564.
If a statute like that described by the learned justice does not so result, how can a careless belief of the plaintiffs in this case, that this bill of lading was what it purported to be, have the effect of subjecting the carrier to the same liability as if it had issued a bill of exchange or promissory note without receiving the consideration for it ? Or the same result as if an agent, authorized to sign its notes, had executed and negotiated one on his own account to defraud the principal? Lowell Bank v. Winchester, 8 Allen, 109.
Nor do I see why the local or special custom averred in this declaration, or any general custom of dealing with bills of lading as if they possessed this element of negotiability, should give it to them as against the carrier, or enlarge his liability on them. Whart. Ag. §§ 134, 675, 676; The Reeside, 2 Sumn. 567, 569; Tierney v. Wilson, 7 Yerg. 340; 6 So. Law Rev. (N. S.) 845; The Delaware, 14 Wall, at pp. 602, 603; Blakemore v. Heyman, 6 Fed. Rep. 581.
The most plausible argument in favor of the plaintiffs is that the carrier, having authorized an agent to sign bills of lading, is estopped
The case of Farmers’, etc., Nat. Bank v. Erie R. Co. 72 N. Y. 188, illustrates the class of acts within the scope of the authority of this kind of agent, and shows where the corporation is liable for their neglect. It was a bill of lading issued to the wrong person on goods received, and the carrier was liable to the rightful owner notwithstanding it delivered to this fraudulent consignee. Of course, the company did not authorize an agent to issue to a wrong person, but having received the goods of the rightful owner its liability was fixed, and the agent was neglectful within the scope of his authority over the. goods. It was his business to deliver to the rightful owner, and it was negligence to deliver to another. Signing the bill of lading to the wrong person was only an incident of that neglect. Another illustration is found in Bradstreet v. Heran, 2 Blatchf. 116, where a master signed a bill of lading, representing that the goods shipped were in good order; and another in Relyea v. Rolling Mill Co. 42 Conn. 579, where the bill of lading represented that there was a larger quantity than was actually shipped, and libels to recover freight were dismissed. But see Blanchet v. Powell, 9 Exch. 74. But there being no goods delivered to the carrier, no agency to sign a bill of lading is called into being; indeed, there is no carrier, for there are no goods to be carried. There is a ship or a railroad, but it is not, as to any given person, a carrier without the goods, and it only as carrier that a bill of lading, in the nature of the thing, binds the company or owner.
The master of a ship has a more comprehensive agency than a station or freight agent of a railroad, and he has no authority, actual or apparent, to issue bills of lading until the goods are delivered to him or to the ship, and it took a statute in England to make him even personally liable to one injured by such bill of lading. 3 Kent, (12th Ed.) 207, and note; 1 Pars. Mar. Law, (Ed. 1859,) 135, 137, and notes; 1 Pars. Ship. & Ad. (Ed. 1869,) 187, 190, and notes; 2 Daniell, Neg. Inst. (2d Ed.) §§ 1729, 1733; 1 Chit. Cont. (11th Ed.) 7, note e; Hutch. Car. §§ 122, 123, 124; 2 Jac. Fish. Dig. 1654, and cases cited by these authorities; 18 & 19 Vict. c. 111, § 3; Jessel
These authorities establish beyond dispute that where a master signs a bill of lading for goods not received, or for more than are received, he acts beyond his authority, and the owner is not liable either to the original shipper or any assignee of the bill of lading, whether he makes advances on the faith of it or gives value for it or not; neither is the owner estopped to show the .facts as they really exist. Some courts have reluctantly yielded to this principle, and some have sought to restrict or qualify it in the supposed interest of commercial dealing; but in England, although a statute makes the individual signing the bill of lading liable, it goes no further, and the doctrine of Grant v. Norway, supra, has withstood the assaults upon it and is established law. It has been approved by the supreme court of the United States, and directly or in principle by other federal courts. Schooner Freeman v. Buckingham, 18 How. 182; Vandewater v. Mills, 19 How. 90; The Lady Franklin, 8 Wall. 325; The Keokuk, 9 Wall. 517, 519; Buckley v. Naumkeag Co. 24 How. 386, 392; S. C. 1 Cliff. 322, 328; The Loon, 7 Blatchf. 244; The Grant, 1 Biss. 193; The May Flower, 3 Ware, 300; The Edwin, 1 Sprague, 477; The Leonidas, 1 Ole. 12; The Marengo, 6 McLean, 487; McCready v. Holmes, 6 Am. Law Reg. (O. S.) 229; The Brown, 1 Biss. 76; The Wellington, Id. 279, 280; The Tuskar, 1 Sprague, 71; Sutton v. Kettle, Id. 309; Blag v. Ins. Co. 3 Wash. 5; Dixon v. Railroad Co. 4 Biss. 137, and note at page 147; Bradstreet v. Heran, 2 Blatchf. 116; Relyea v. Rolling Mill Co. 42 Conn. 579.
It must be conceded, as is contended here, that none of these eases were against railroad companies — the case of Dixon v. Railroad Co., supra, being cited only for the note as a collection of authorities; and in the Lady Franklin, supra, Relyea v. Rolling Mill Co., supra, Bradstreet v. Heran, supra, there are intimations, and in two of them something more than intimations, perhaps, that the rule might be different where the case is embarrassed by advances being made on the faith of the bill of lading. But it is thoroughly settled that there is no distinction between a bill of lading given by a carrier on land and one given by a carrier on water. Mr. Justice Story says as much, and that “each means the same obligation and liabilities, and is subject to the same duties.” King v. Shepherd, 3 Story, 349, 360. The learned annotators of Lukbarrow v. Mason, 2 T. R. 63, (S. C. 6 East, 21,) say:
*140 “ It has, indeed, been questioned whether a receipt given by a carrier for goods or merchandise placed in his hands for transportation from one part of the same country to another, along the line of a canal or railroad, is a bill of lading in the sense of the commercial law, or within the rule of Lickbarrow v. Mason. But this doubt has but little foundation in reason, and is impliedly excluded by the decisions in this country, which treat the legal effect of instruments of this description as the same, whether the property which they represent is carried by land or across the ocean.” 1 Smith, Lead. Cas. (7th Ed.) 1205, marg. p. 900. See, also, 2 Daniell, Neg. Inst. (2d Ed.) § 1732; 1 Parsons, Ship. & Adm. 134; Bouv. Law Dict. tit. “Bill of Lading,” and cases cited.
The argument of learned counsel for the plaintiffs) that this exemption of the owner of a ship from liability for the fraud of the master in issuing a false bill of lading grows out of the peculiarities of the laws of the sea, and is founded on the principle that the ship is bound to the freight and the freight to the ship, is a misapprehension, I think, of the meaning of the supreme court in The Schooner Freeman Case, for the court distinctly places its.judgment as well upon the want of authority in the master as an agent. See The Williams, 1 Brown, Adm. at p. 219; The Pauline, 1 Biss. 390.
And in respect to the intimations that there is a different rule between an assignee who has in good faith advanced money on the faith of the bill of lading and the original parties, I can only say that, in my judgment, no such distinction exists. These intimations are all founded on doubts and conflicts that were set at rest by Grant v. Norway, which is a direct authority against them. The Schooner Freeman Case, approves that of Grant v. Norway, was itself a case of advancement of money on the faith of a false bill-of lading, and must bind Us here, both in its principle and its precedent. Besides, I have no doubt, for, the reasons I have stated, that it is the correct principle, and it is a mistake to suppose that the interests of commerce require that, the common carriers of the country shall become the insurers or guarantors of merchants who choose to make, in their dealings with each other, a convenience of their bills of lading.
It is proper that I should give attention to the conflict of authority in the state courts, though in this matter of general commercial law I should feel at liberty to act independently, without attempting to reconcile the conflict, and follow the guidance that seems to me plainly pointed out by the federal adjudications I have consulted. The New York commission of appeals has deliberately overruled both the' courts of England and the supreme court, of the United States, though the lamented author of Hutchinson on Gamers seems
The Massachusetts case formulates the rules of law on this subject, the third of which says:
“ When the master is acting within the limits of his authority the owners are estopped in like manner with him; but it is not within the general scope of the master’s authority to sign bills of lading for any goods not actually received on board.”
A question is made by the defendant that the plaintiffs cannot sue in their own name because it is contended that the assignment of a bill of lading goes no further than to give the assignee a right to bring replevin or trover for the goods or some action connected with his ownership, and does not assign the right to bring an action for a breach of the contract of affreightment. This was never so in our admiralty courts, though for a long time such was the contention in courts of law. But now, as the authorities already cited and numerous others show, the assignment carries the right to bring an action against the carrier for loss or non-delivery. This would be certainly so under the influence of our Code, which makes all bills for the performance of any duty assignable, and our decisions collected in Meigs’ Digest at the places above cited. T. & S. (Tenn.) Code, § 1967; The Thames, 14 Wall. 98; S. C. 3 Ben. 279; 7 Blatchf. 226; The Vaughan and Telegraph, 14 Wall. 258; Curry v. Roulstone, 2, Tenn.
Demurrer overruled.
Note. The writer of this opinion cannot resist an impulse of affectionate remembrance, and begs the privilege of adding here a word of admiration for the thorough, careful, and able work of his deceased friend, Robert Hutchinson, the' author of the treatise on “ Carriers,” above referred to, who died in the great plague of yellow fever that desolated Memphis in 1878. Often — very often — while he was engaged in the preparation of that book, have we labored together in the late hours of the night in the library where the writer at this moment works alone beside the silent but enduring monument his dead friend has left.