Opinion
No. 5542.
January 30, 1929.
Appeal from the District Court of the United States for the Southern Division of the Northern District of California; Frank H. Kerrigan, Judge.
Action by Macondray Co. against W.R. Grace Co. From an adverse decree, plaintiff appeals. Affirmed.
The appellant, as assignee of Naigai Boyeki Kaisha, Limited, hereinafter to be designated the Naigai Company, combined two causes of action in the court below in a complaint against the appellee. The first was for money had and received, alleging that on April 20, 1920, the appellee became indebted to the appellant's assignor in the sum of $12,147.60 for money had and received to the use of said assignor, that $3,304.04 had been paid on said indebtedness and $8,843.56 remained due and owing. The second cause of action set up a contract between the appellant's assignor and the appellee, whereby the former agreed to pay the latter for merchandise the agreed price of $12,147.60, which contract price was paid to the appellee, and the alleged failure of the latter to comply with the terms of said contract and its failure to return the money so paid thereon, except the sum of $2,304.04, leaving a balance due of $8,843.56. The terms of the contract are shown in a stipulation of the facts, which are in substance the following: On February 11, 1920, at San Francisco, one Wada, the agent of the Naigai Company, entered into a written contract with the appellee whereby the former purchased from the latter 20 long tons of carbolic acid crystals. The contract provided: "Shipment: February/March, 1920, from New York. Price: 26½¢ per lb. U.S. Gold, C.I.F. Kobe. * * * Confirmed Banker's Letter of Credit to be established in San Francisco on placing the order, to be drawn against by _____ days sight draft with shipping documents attached." On February 26, 1920, the purchaser established a letter of credit in the Yokohama Specie Bank at San Francisco, to be drawn against in making payment under said contract. It was not specified that any particular kind of bill of lading was required. In March, 1920, by agreement of the parties, the period of shipment was extended to and including April 30, 1920, and the period of said letter of credit was similarly extended. On all of said dates the Oanfa was scheduled to sail from New York to Kobe on or about April 10, 1920. On April 7, 1920, the appellee delivered in New York at dock the said merchandise to the steamship companies who owned or operated said steamer, and paid said companies freight for the transportation thereof from New York to Kobe. Funch, Eyde Co., Inc., were the general agents of the steamship companies in New York and attended to all their bookings and other business at that port. On March 31, 1920, the appellee wrote to the Naigai Company as follows: "With regard to shipment of these 20 tons of carbolic acid crystals, beg to advise that we have been obliged to cable for extension of letter of credit and although we expected to ship early April we asked you to open credit to April 30 for fear there might be some delay in our receiving the shipping papers from New York. We learned about ten days ago that shipment had duly left factory, but the steamer by which shipment is going forward had not yet reached New York and the Steamship Company absolutely refused to issue bill of lading so that we were not able to negotiate under your first letter of credit. Suppliers have now telegraphed us that shipment is going forward per SS. `Oanfa,' scheduled to leave New York about April 10th." On the same day the appellee wrote to Wada: "We beg to confirm our advices of today that the 20 tons of phenol sold your firm thru you, and covered by our contract No. 1334, are going forward by the S.S. `Oanfa,' scheduled to leave New York about April 10th." On April 20, at San Francisco, the appellee presented to the Naigai Company at the Yokohama Specie Bank, the following documents: (1) A bill of lading signed by said Funch, Eyde Co., Inc.; (2) an insurance contract executed by Fireman's Fund Insurance Company; (3) an invoice; and (4) draft for the amount of said invoice, to wit, $12,147.60. On April 20, 1920, the Naigai Company, by said Yokohama Specie Bank, accepted said documents from the appellee without specifying or giving notice of any objection thereto, and paid the appellee $12,147.60, and neither said sum of money, nor the goods represented thereby, have been returned or redelivered or reassigned to the appellee. Nor has the latter made any demand for said goods. The goods were at all times covered by a marine insurance policy issued by Fireman's Fund Insurance Company to Hooker Electro Chemical Company, who manufactured and supplied the goods to the appellee, and the premium for certificate of insurance issued under said policy was paid by the appellee. The Oanfa did not leave New York on April 10, 1920, but, owing to a stevedores' strike, was delayed at that port until June 3, 1920, before sailing for Japan. The appellee was not aware of the fact that the goods were not transported on that vessel until July 28, 1920, when the Naigai Company cabled the appellee to that effect, and the Naigai Company was not aware that the goods were not transported on the Oanfa until that vessel arrived at Kobe. On July 28, 1920, the Naigai Company cabled the appellee requesting it to cancel said contract. It was further stipulated, with a reservation of all legal objections, that the form of bill of lading customarily issued and used by ocean transportation companies in the United States and accepted by banks and merchants in full compliance with c.i.f. and other contracts requiring the delivery of bills of lading was the form known as "received for transportation" bills of lading, that is, the bill of lading stated that the goods therein described were received for shipment on a specified vessel, or any other vessel, and did not state that the same were received "on board" a particular vessel. It was stipulated that the appellee offered proof by qualified experts that by the word "shipment," as used in c.i.f. contracts, was customarily meant the delivery of goods to a carrier for transportation, and its acknowledgment of the receipt thereof for transportation by a named vessel; and that if appellee's witnesses were called and permitted to testify, they would so testify. Prior to February 11, 1920, the Naigai Company had frequently made purchases from the appellee under contracts in the form marked "Exhibit E," and the appellee tendered, and the Naigai Company received, in compliance therewith and without objection, certificates of insurance and bills of lading attached to such contracts. The goods in the instant case were by the steamship companies placed on board their steamer Telemachus, notwithstanding the request of the suppliers of the shipment, made to Funch, Eyde Co., Inc., that they be not shipped. The Telemachus left New York September 20, 1920, with the goods and arrived at Kobe in December, 1920. On January 12, 1921, the Naigai Company, acting by its agent Wada, assigned to the appellant its claim against the appellee.
The court below deemed it unnecessary to pass upon the question whether or not the appellee violated its contract, and concluded that if indeed there was a breach of the contract, the appellant had failed to allege or prove any substantial damages, it being stipulated that the appellant's assignor had at no time returned, or redelivered, or reassigned to the appellee, the goods which it had received, and that nowhere in the pleadings or in the stipulated facts was there proof of the market value of the goods at the time fixed for their delivery, or at any subsequent time.
Louis T. Hengstler and Frederick W. Dorr, both of San Francisco, Cal., for appellant.
George Herrington and Orrick, Palmer Dahlquist, all of San Francisco, Cal., for appellee.
Before GILBERT and DIETRICH, Circuit Judges, and LOUDERBACK, District Judge.
The appellant contends that its cause of action as pleaded is one for money had and received, that its assignor paid the money to the appellee in consideration of the latter's promise to make an April shipment of goods from New York, and that the appellee did not make a legally valid April shipment from New York and thereby the contract was put an end to, and that, even if the cause of action is not strictly one for money had and received, it is a case where the purchaser was induced by the seller to pay money under a mistake of facts by handing on April 20, 1920, to the purchaser's agent an invoice advising it that the money was being demanded as the purchase price of goods shipped at New York per steamship Oanfa, for Kobe, which was not true, and handing to the agent an insurance certificate advising it that the money was being demanded as the purchase price of goods which were shipped on board said vessel from New York to Kobe, which also was not true. The contention ignores certain essential features of the contract. Under a c.i.f. contract, as this was, it was not necessary that the appellee place the goods on board a ship bound from New York to Kobe. As to its obligation to make shipment the contract was performed on the appellee's part when it delivered to the appellant's assignor the bill of lading providing for the shipment of the goods to their destination, the insurance contract in customary form, and the invoice, and when the papers were accepted by the appellant's assignor.
Under a c.i.f. contract the obligation of the seller is to deliver documents rather than goods, to transfer symbols rather than physical property. Manbre Saccharine Co. v. Corn Products Co. (1919) 1 K.B. 198, 203; Karberg v. Blythe (1915) 2 K.B. 379, 388; Harper v. Hochstim (C.C.A.) 278 F. 102. In Scrutton on Charter Parties and Bills of Lading (11th Ed.) p. 192, it is said: "This form of the sale of goods is one to be performed by the delivery of documents representing the goods, i.e., of documents giving the right to have the goods delivered, or the possible right, if they are lost or damaged, of recovering their value from the shipowner or from the underwriters. The seller performs his contract by tendering the documents, and breaks it by failing to tender them." In A. Klipstein Co. v. Dilsizian (C.C.A.) 273 F. 473, 475, the court said: "The c.i.f. contract is an expression which indicates that the price fixed covers the cost of the goods and insurance and freight on them to the place of destination. Under such a contract, the seller must ship the goods, arrange the contract of affreightment to the place of destination, pay its cost and allow it from the purchase price, and procure insurance for the buyer's benefit for the safe arrival of the goods and pay therefor. When the seller has done this, and forwarded the papers to the buyer, he has fulfilled his contract, and delivery is complete. There is no obligation by the seller to deliver the goods at the place of destination." There can be no question, we think, but that the appellee shipped the goods. The accepted meaning of the term is that goods are shipped when they are delivered to a carrier for transportation on a regular line of transportation between the point of shipment and the destination. 23 R.C.L. 1372; Stallman v. Francis A. Cundill Co. (D.C.) 288 F. 643; Jacob Glass Inc. v. Banka Marmorosch, 122 Misc. Rep. 637, 204 N.Y.S. 636; Childs Bro. v. Hirsch Co. (Sup.) 202 N.Y.S. 226; Horner v. Daily, 77 Ind. App. 378, 133 N.E. 585; State v. Lieber, 143 La. 158, 78 So. 431.
In the case at bar it was stipulated that the form of bill of lading which was delivered by the appellee was that which was generally issued by ocean transportation companies in the United States and accepted by banks and merchants in full compliance with c.i.f. contracts, and was the form known as a "received for transportation" bill of lading, that is, the bill of lading stated that the goods therein described were received for shipment on a specific vessel or any other vessel, and did not state that the same were received on board a particular vessel, and the appellee stipulated that if the appellee's expert witnesses were called, they would testify that by the word "shipment," as used in a c.i.f. contract, was customarily meant the delivery of goods to a carrier for transportation and its acknowledgment of the receipt thereof for transportation by a named vessel, or a following one of the same line. The bill of lading contained an acknowledgment of the receipt from the appellee "to be transported by the good steamer Oanfa to sail from the port of New York, and bound for far Eastern ports, via Suez Canal, or otherwise, with liberty to substitute another steamer or steamers, 191 drums phenol, and to be delivered at the port of Kobe, unto order of W.R. Grace Co." Nor do we think that in Thames Mersey Ins. Co. v. United States, 237 U.S. 19, 26, 35 S. Ct. 496, 499 (59 L. Ed. 821, Ann. Cas. 1915D, 1087) in saying that one of the incidents of a c.i.f. contract is "that the shipper fulfills his obligation when he has put the cargo on board and forwarded to the purchaser a bill of lading and policy of insurance with a credit note for the freight," the court intended to rule that one of the conditions of a c.i.f. contract was that the shipper must put the cargo on board or that it must be put on board. The question whether or not the cargo must be put on board a vessel was in no way involved in that case. The case here is not one such as those cited by the appellant, as the decision of this court in George Wills Sons v. Larzelere, 288 F. 559, where it was held that a contract providing for shipment "to be effected" from Australia by steamer on the 10th of March required more than a mere delivery to a steamship at the wharf, or the Olivier Straw Goods Corporation v. Osaka Shosen Kaisha (C.C.A.) 27 F.2d 129, which was a suit against a carrier in a case where the contract required an "on board" bill of lading of goods, but the goods were not on board. It was held that the carrier was estopped to deny the truth of its assertion as against a purchaser of the bill of lading misled thereby.
But irrespective of the question whether or not the appellee fulfilled its contract, we are unable to see in any view of the pleadings and the stipulated facts that the appellant has a cause of action to recover the money which the Naigai Company paid to the appellee. That company received, and, so far as the record shows, still retains, the possession of the goods for which the money was paid. Presumably the value of the goods was at all times equal to the price paid for them, for there is no evidence to the contrary. There is absence, therefore, of proof of damage or loss to the Naigai Company. It is true that when in July, 1920, that company became aware of the fact that the goods were not on the Oanfa, it cabled to the appellee requesting it to cancel the contract. But the contract was not canceled, and the fact that the request was made effected no change in the contractual relations of the parties. The request was not a declaration of rescission, for such a declaration must clearly indicate rescission and must be accompanied by an offer of restoration to the status quo of the parties. Shappirio v. Goldberg, 192 U.S. 232, 24 S. Ct. 259, 48 L. Ed. 419; Blank v. Aronson (C.C.A.) 187 F. 241; Ripley v. Jackson Zinc Lead Co. (C.C.A.) 221 F. 209.
The decree is affirmed.