Opinion
No. 22337
Decided December 24, 1930.
Carriers — Stoppage in transitu — Right continues until delivery to buyer or possession taken — Reconsignment notice does not constitute taking possession — Mere arrival at destination, not taking possession, when.
1. The right of stoppage in transitu continues during the transitus, that is, until the goods are delivered by the carrier to the buyer, or possession, actual or constructive, is taken by the buyer.
2. A mere notification by the buyer to the carrier to divert the goods in course of transit and change the destination of the shipment does not constitute a taking of possession of the goods by the buyer, either actual or constructive.
3. Mere arrival of the goods at the designated destination without the carrier's recognizing the title of the consignee and agreeing to hold the goods not merely as carrier or warehouseman pending a complete delivery to the purchaser, but as agent for the purchaser under the new contract, does not of itself constitute possession, actual or constructive, of the shipment by the buyer.
ERROR to the Court of Appeals of Hamilton county.
This case was instituted in the court of common pleas of Hamilton county, and by agreement of the parties was submitted to the court upon the pleadings. Judgment was rendered for the plaintiff, the M. Degaro Company, in the amount of $2,208.70, which judgment included certain freight charges mentioned in the pleadings, paid by the plaintiff to the railroad company.
The petition, omitting the caption, formal allegations, and the prayer, is as follows:
"Plaintiff for its cause of action against the defendant states that on or about March 3, 1927, there was delivered to the Union Pacific Railway System at Grandview, Washington, by The Perham Fruit Company, 756 standard boxes of apples in car PFE-16,123 consigned to Denney Co., Chicago, Ill., that while said car of apples was in transit, it was reconsigned by Denney Co., on or about March 5, 1927, to themselves at Cincinnati, Ohio, advise The M. Degaro Company, and a sight draft on the plaintiff together with written order for delivery of the car was forwarded through the First National Bank at Cincinnati, Ohio, for collection; that on or about March 18, 1927, the plaintiff company having received notification from the defendant of the arrival of said car in Cincinnati over the rails of the defendant company, paid the sight draft above referred to, obtained the written order calling for delivery of the car, also paid the freight charges of Five Hundred Sixty-one and 33/100 Dollars ($561.33) due on said car to the defendant railway company, but before said written order for delivery of said car could be surrendered to the Railway Company and proper instructions given respecting the said delivery, said defendant Railway Company unlawfully and without legal justification diverted said car to some point in the eastern part of the United States, the exact destination being unknown to this plaintiff and the name of the party ordering said defendant company to re-consign said car out of Cincinnati likewise being unknown to this plaintiff.
"Plaintiff states that this diversion was unlawful and that said conversion of said shipment was accomplished without the consent or permission of this plaintiff; that this plaintiff had sold the car of apples in question and as a result of said unlawful conversion has been damaged in the sum of Twenty-five Hundred Dollars ($2500)."
The pertinent and material parts of the amended answer are as follows:
"Defendant for its second amended answer herein says:
"1. On March 3, 1927, the Perham Fruit Company, a corporation of the State of Washington and acting as the agent of E.S. Small, shipped from Grandview, Washington, a carload of apples in P. F. E. 16123, which apples were the property of said E.S. Small and had been sold by him to Denney Company.
"2. Upon receipt of the apples for transportation the initial carrier, the Oregon-Washington Railroad and Navigation Company, as directed by the Perham Fruit Company, executed a straight bill of lading, marked 'Not Negotiable' in which the Perham Fruit Company was shown as the consignor and Denney Company, Denver, Colorado, as consignee, and routing via Oregon-Washington Railroad Navigation Company and Union Pacific Railroad Company.
"3. Small notified Denney Company of the shipment and sent Denney Company the bill of lading.
"4. Denney Company was and is a corporation existing under the laws of Illinois, and had its principal office and place of business in Chicago, being engaged in the buying and selling of fruits and vegetables.
"5. On March 5, 1927, Denney Company requested the carriers to reconsign said shipment as follows:
"We are making the following change in consignee, destination and routing, subject to 'Reconsignment Rules' of your company, provided the through rates of freight will apply from original point of shipment to destination as changed.
"Present Billing"Car PFE 16123 Date 3/3 Contents apls.
"Shipped from Grandview Destination Denver Consigned to D. Co.
"Changed to Read"Denney Co. Cinti., Ohio Advise M. Degaro Sons Route via IC B4.
"Note on Waybill
"Permit inspection before unloading without bill of lading. Deliver without bill of lading on consignor's written order.
"6. On March 5, 1927, Denney Company drew a draft, with a delivery order attached, on the plaintiff for $1,278.13, for the price of said apples.
"7. On March 9, 1927, said shipment was reconsigned in accordance with instructions of said Denney Company set forth in paragraph 5 hereof by the Union Pacific Railroad Co., at Laramie, Wyoming (prior to reaching Denver) by making appropriate changes on the waybill of the shipment; no new bill of lading was issued.
"8. On March 9, 1927, E.S. Small, the seller, drew a draft on Denney Company for the price of said apples.
"9. On March 15, 1927, Denney Company refused to pay draft drawn on it by said Small on account of having no funds with which to pay the same. Denney Company has never paid for said apples.
"10. On March 13, 1927, said shipment arrived at Cincinnati, Ohio, over defendant's railroad and at 7:00 A. M. March 14, 1927, was placed in defendant's Central Avenue delivery yards at Cincinnati; on March 14, 1927, plaintiff was advised orally of arrival and on March 15, 1927, by written notice through the United States mail.
"11. On March 14, 1927, the said Perham Fruit Company, acting for and as agent of said E.S. Small, notified said initial carrier to reconsign said shipment to the Perham Fruit Company, Denver, Colorado, and to deliver the same only on surrender of the original bill of lading or written order.
"12. On March 15, 1927, said E.S. Small, having learned of the non-payment of his draft by said Denney Company, and that involuntary proceedings in bankruptcy were about to be begun against Denney Company, served notice on the said initial carrier, the Oregon-Washington Railroad Navigation Company at Yakima, Washington, to stop and withhold the delivery of said shipment, claiming this right as an unpaid seller to stop the shipment in transit.
"13. On March 16, 1927, defendant at Cincinnati received instructions to withhold delivery of said shipment pursuant to the seller's order to stop the shipment in transit.
"14. On March 17, 1927, plaintiff paid to the First National Bank, of Cincinnati, Ohio, the amount of Denney Company's draft drawn March 5, 1927, and took up Denney Company's delivery order covering said shipment.
"15. On March 18, 1927, plaintiff paid to defendant freight charges on said shipment from point of origin to Cincinnati, amounting to $561.33.
"16. On March 19, 1927, by instructions from said seller, E.S. Small, defendant reconsigned said shipment and forwarded the same to New York City.
"17. On March 20, 1927, plaintiff requested defendant to deliver said shipment of apples to the Kroger Grocery Baking Company, Cincinnati. Defendant refused this request for the reason that said seller had ordered said shipment stopped in transit claiming the right as the unpaid vendor of an insolvent purchaser to order such stoppage.
"18. On March 21, 1927, plaintiff presented to defendant the written delivery order from Denney Company and on the same date said written order was returned to plaintiff.
"19. On March 22, 1927, plaintiff filed a claim with defendant seeking $2,500.00 damages because said apples were not delivered to plaintiff, which claim defendant has disallowed in writing communicated to plaintiff.
"20. Plaintiff has not received back any part of the freight charges of $561.33 paid to defendant; that defendant offered to refund and has been willing at all times and now is willing to repay the plaintiff said freight charges, but plaintiff has refused to accept the same."
The judgment of the court of common pleas was reversed by the Court of Appeals upon the ground that the court erred in rendering judgment in favor of plaintiff on the pleadings, instead of in favor of the defendant. The Court of Appeals set aside the judgment of the court of common pleas and rendered judgment in favor of the railway company, defendant below.
The case comes into this court upon allowance of motion to certify the record.
Messrs. Hightower, O'Brien Porter, for plaintiff in error.
Mr. H.N. Quigley, Mr. C.P. Stewart and Messrs. Harmon, Colston, Goldsmith Hoadly, for defendant in error.
Since the bill of lading consigned the goods to a specified person, it was a straight bill. Title 49, Section 82, U.S. Code. If the contract between the consignor and the carrier had been represented by the straight bill only, without subsequent modification, delivery of the shipment by the carrier without surrender of the bill of lading would not have been wrongful. However, the request to reconsign the shipment, ordered that the present bill be changed to read, "Denney Co. Cinti., Ohio Advise M. Degaro Sons Route via IC B4. NOTE ON WAYBILL Permit inspection before unloading without bill of lading. Deliver without bill of lading on consignor's written order." Had this instruction to advise M. Degaro Sons been carried on the bill itself, the bill of lading would have had to be surrendered to the carrier before it was absolved from responsibility to the consignor. 4 Elliott on Railroads, Section 1427, page 64; Elliott on Bailments, under Carriers, page 166; Furman v. Union Pacific Railroad Co., 106 N.Y. 579.
However, in this request for reconsignment the same result was obtained, for the note on the waybill shows plainly that the carrier agreed to deliver the goods without a bill of lading only on written order from the consignor. Under the circumstances of the present record the carrier was not released from the obligation of securing a written order from the consignor before delivery.
The dates in this case are significant. Upon March 13, 1927, the shipment arrived in Cincinnati, consigned to Denney Company.
Upon March 14, 1927, the M. Degaro Company was notified of the arrival of the shipment. It does not appear from the record what, if any, action was taken by the M. Degaro Company with reference thereto until March 17, 1927.
Upon March 16, 1927, the carrier received instructions from the seller to withhold delivery of the shipment.
Upon March 17, 1927, the M. Degaro Company paid the purchaser's draft and took up the delivery order.
Upon March 18, 1927, the M. Degaro Company paid the freight charges.
The M. Degaro Company did not present the written delivery order to the carrier until March 21, 1927.
The notice of stoppage in transitu was hence received by the carrier prior to the payment of the draft and freight charges by the M. Degaro Company and prior to presentation of the written delivery order.
With reference to the reconsignment at Laramie, Wyoming, when Denney Company directed that the shipment be diverted from Denver to Cincinnati, it did not surrender the bill of lading, nor notify the carrier to deliver the apples to the M. Degaro Company. The notification was simply to reconsign the shipment to Denney Company at Cincinnati, with directions to notify the M. Degaro Company. Denney Company were still the consignees. Instead of ordering a reshipment, Denney Company thus effected a mere diversion of the route. Atchison, Topeka Santa Fe Ry. Co. v. Harold, 241 U.S. 371, 36 S.Ct., 665, 60 L.Ed., 1050. When the order of stoppage in transitu was given, the car of apples was in the hands of the carrier, consigned to the original consignee, and held pending a complete delivery to the purchaser. The carrier had taken no action such as would indicate an agreement to hold the goods as agent for the purchaser under a new contract made and assented to by both the carrier and the purchaser. The case hence is materially different upon the facts from that presented in Coleman v. New York, New Haven Hartford Rd. Co., 215 Mass. 45, 102 N.E. 92, 7 A. L. R., 1366.
When the carrier received the notice to withhold delivery, the right of stoppage in transitu still existed, and, when that right was exercised, the carrier was bound thereby.
Since the purchaser did not surrender the bill of lading nor present the written delivery order nor otherwise terminate the original transit prior to the order of stoppage in transitu, all of the transactions up to the notice to withhold delivery constituted, in contemplation of law, one continuous transaction. Therefore there was neither an actual, physical delivery of the apples to the M. Degaro Company, such as would shut off the right of the shipper to order delivery withheld, nor was there a constructive possession of the goods by the consignee prior to the order of stoppage.
With reference to the question of estoppel, since the M. Degaro Company took up the draft after the notice of stoppage in transitu, and prior to the payment of the freight charges, it is evident that the taking up of the draft was not done in reliance upon any attornment to the M. Degaro Company by the carrier.
Every one of the cases relied upon by the plaintiff in error is sharply distinguishable upon the facts. In re Arctic Stores, (D.C.), 258 F., 688, the bill of lading consigned the shipment in question to the Arctic Stores at a designated siding, alongside of the warehouse of the Arctic Stores. This was held to constitute complete delivery.
In re Nesto, (C.C.A.), 270 F., 503, turns upon the question of fraud, and, moreover, in that case the goods were rebilled to an ostensibly new carrier.
In re W. A. Paterson Co., (C.C.A.), 186 F., 629, 34 L.R.A. (N.S.), 31, upon arrival of the shipment at the destination, the bill of lading was surrendered to the railroad company and the goods were rebilled to a subsequent vendee.
In the case of Norfolk Hardwood Co. v. New York Central Hudson River Railroad Co., 202 Mass. 160, 88 N.E. 664, while the vendor consigned goods shipped by freight to its own name in the city where the purchaser did business, upon being notified by the carrier of the arrival of the goods at such destination, the vendor expressly authorized the carrier to deliver the goods to the purchaser. The carrier thereupon, at the request of the purchaser, transported the goods to a neighboring city and stored them there in the carrier's warehouse in the name of the purchaser.
In no case cited on behalf of the plaintiff in error has the proposition been urged which is here advanced, namely, that a mere notification by the buyer to the carrier to divert the goods in course of transit and change the destination of the shipment constitutes a taking possession of the goods, either actual or constructive, and that mere arrival of the goods at the designated destination where the bill of lading evidently contemplates acceptance by the consignee or his agent of itself establishes possession, actual or constructive, of a shipment by the buyer.
The receipt of the freight charges, after acceptance of the notice to withhold delivery, was wrongful on the part of the carrier. Since the record, however, shows a continuous offer at all times to refund these freight charges to the M. Degaro Company, and refusal of such company to accept them, the judgment of the Court of Appeals will be affirmed.
Judgment affirmed.
MARSHALL, C.J., KINKADE, ROBINSON, JONES, MATTHIAS and DAY, JJ., concur.