Craig v. Marx & Kempner

Robertson, Associate Justice. It is not clear from the testimony whether the ties shipped by Goodhue to the railroad company were inspected at the place of shipment or upon their arrival at Houston. There is no direct evidence upon the question, and the circumstances incidentally developed on the trial, loosely induce contrary inferences. On the one hand, whilst the contract provides for delivery at the point of shipment, it also stipulates that the ties shall remain at Goodhue’s risk until inspected and received, and Kempner testifies that there were frequent discrepancies between the bills [653] of lading and the certificates of inspection. It was also shown that the certificates of inspection were often delayed. These circumstances feebly indicate that the inspection was to be made at Houston. On the other hand, the right of the railroad company, under the contract, to receive at a reduced price such ties as did not pass inspection, might explain, consistently with inspection before shipment, the discrepancies between the bills of lading and the inspection certificates ; and the provision in the contract between Goodhue and Marx & Kempner, that the drafts of the former upon the latter should be accompanied by both the bills of lading and the certificates of inspection, is absurd as to the bills of lading, unless the inspection preceded the shipment. If the inspection takes place at Houston, the certificate of inspection shows that the ties have been shipped, received and accepted; it thus shows all that the bill of lading could be used to prove, and also that the bill of lading as the representative of property in transit, or any sort of security, is functus officio. In this state of the record, if the court below considered that the inspection preceded the shipment, we cannot determine that the conclusion was wrong. If the fact that the ties were inspected at Houston was material to the plaintiff’s case, and the court below held that it was not proven, there is nothing to warrant a reversal of the ruling. If the ties represented by the bills of lading delivered to Craig with the drafts described in the petition, had already been delivered by Goodhue and accepted and received by the railroad company, in accordance with the terms of the contract between them, the property in the ties had passed to the railroad company, and Goodhue had no interest in them to be transferred to Craig, and his delivery of the bills of lading could confer no lien. In the bills of lading, the carrier contracted to deliver the ties to the railroad company, and no right or control was reserved in Good-hue. There was nothing to except the case from the operation of the general rule, that delivery to the carrier is delivery to the purchaser. The title had passed; the ownership was in the railroad company, absolutely, subject only to the right of the vendor to stop in transit— a right dependent, not upon title, but on a lien for the price (Allen v. Willis, Tyler term, 1885). This lien ceased with the transit, and if, in delivering the bills of lading to Craig, the purpose was to pass to him this lien, the lien had expired before the defendants received the proceeds of the ties. [654] A bill of lading evidences prima, facie ownership of the goods in transit by the consignee. The proof may show that the consignor is still the owner. Thus, in the cases cited for the appellant, the owners consigned to factors for sale; in some of the cases the proceeds, by previous agreement, to be applied to the payment of debt due the factors. The shipper continued to be the owner of the goods, and the transfer of the bills of lading, without indorsement, to the payee of the consignor’s draft, was an appropriation of the property to the payment of the draft before delivery to the consignee; before the consignee had acquired any right in the property. When the consignee acquired possession, the prior right of the payee of the draft had already attached. Bank v. Homeyer, 45 Mo. 145; Holmes v. Bailey, 92 Penn. St. 57; Holmes v. Bank, 87 Penn. St. 525; Bank v. Jones, 4 N. Y. 497; Taylor v. Turner, 87 Ill. 296. In each of these cases, the consignee’s only interest in the property was as factor or commission merchant; his business was to sell for account of the consignor; he had no interest whatever in the property until it came into his actual possession. If the goods never reached him, he lost nothing. In the case at bar, the ties in transit belonged to the railroad company; it is the very case put by Mr. Benjamin: “Where goods are delivered by the vendor, in pursuance of an order to a common carrier for delivery to the buyer, the delivery to the carrier passes the property, he being the agent of the vendee to receive it, and the delivery to him being equivalent to a delivery to the vendee.” Benj. on Sales, sec. 399; to same effect see Wharton on Cont., see. 877. Craig had no right in or lien upon the ties, and acquired, through the bill of lading, no superior right to the proceeds of the ties. If the intention was to create a lien, Goodhue had no right to encumber the property of the railroad company. If the purpose was to assign to Craig Goodhue’s right to the price of the ties, nothing was done to consummate this object. Ho such purpose was proved, except as the result of what could not be done—the creation of a lien on the ties. We have discussed the case upon the hypothesis that it was held by the court below that the ties were inspected by the railroad company and received at the places of shipment. The trial was by the court, without a jury, and, in the absence of findings, if there is any theory of the facts supporting the judgment, we must assume that the court below adopted and proceeded upon that theory. But a different result would not necessarily follow, if the proof was. conclusive that the ties were actually accepted and received at Houston, and if they could be considered the property of Goodhue whilst [655] in transit. Goodhue being the owner at the time of the transfer of the bills of lading, Craig's ties, and not Goodhue’s, were accepted and received by the railroad company on Goodhue’s contract; this would give Craig the right to receive the proceeds—the price. If we then assume that Marx & Kempner knew that the ties belonged to Goodhue at the date of the bills of lading, they could be held to have notice from the drafts accompanied by the bills of lading that Good-hue’s title had passed to Craig, if Craig’s mere possession of the bills of lading, with the drafts, was not otherwise explained to them. They had no notice of the parol agreement between Goodhue and Craig that the bills of lading should be held as security for the drafts. Their contract with Goodhue required, for their protection, that his drafts upon them should be accompanied by the bills of lading. They did not regard the bills of lading as security, but as evidence of the accrual of a demand upon the railroad company, on the faith of which they undertook to make advancements. The contract with Goodhue fully explained Craig’s possession of the bills of lading, and the knowledge of such possession need not excite in their minds any suspicion that Craig was the owner of the ties, or entitled to the proceeds. In receiving, in payment of a debt due by Goodhue, the proceeds of these ties, knowing that they are the price of these very ties, they yet may be held under, the facts to have no notice of Craig’s prior or superior claim to these proceeds. The railroad company has paid to Marx & Kempner, and they have received, both without notice of Craig’s right, money belonging rightfully to Craig, Good-hue receiving the benefit of the misappropriation. Craig, in such case, has no remedy against Marx & Kempner. One who receives in payment or security of an antecedent debt, money or negotiable paper, pays value, and cannot be made to restore it to the true owner unless he had notice, at the time he received it, of the real ownership. Wharton on Cont., sec. 733; Foster v. Green, 7 H. and N. 881; Colland v. Loyd, 6 M. and W., 31 and note; Daniel on Nego. Insts., sec. 780. In stating Craig’s rights as holder of the bills of lading, we have put his case, perhaps, more strongly in his favor than it could be sustained upon authority. If the proceeds of these ties were yet in the hands of the railroad company, and this was a controversy over them between Marx & Kempner and Craig, it is by no means clear that the prior rights of the former, under their contract with Goodhue, would not be held to be superior to the claims of Craig. The advancements made and the credit extended to Goodhue, by Marx & Kempner, were, it seems, not severally based upon the dis [656] tinct shipments of Meg, but they were to collect from the railroad company the proceeds of all the ties and place to the credit of Good-hue. If Craig acquired no interest in the ties themselves through the bills of lading, but merely a lien upon the proceeds, it was subsequent in time to the lien of Marx & Kempner, and it is not clear that it would not be subordinate in right. Prior to the presentation of the two drafts described in the-plaintiff’s petition, the appellees had paid two drafts drawn by Goodhue in favor of Craig. One of these they deferred paying, on the ground that no certificate of inspection accompanied it, until the railroad company received the ties and passed the price to the credit of Goodhue. The other they declined to pay until. Craig-guaranteed indemnity. The payment of these drafts, under these circumstances, cannot be held to have established a course of business imposing upon appellees an obligation to accept or pay the drafts involved in this suit, which were neither accompanied by certificates of inspection, nor by Craig’s guaranty against loss. We find no error in the judgment, and it is, therefore, affirmed. Affirmed, [Opinion delivered March 12, 1886.]