Earnest v. Delaware, Lackawanna & Western Railroad

Spring, J.: On the 2d day of November, 1908, the plaintiff delivered to the defendant, a common carrier, at its station in Bath, N. Y., 240 — 332 — barrels of apples, consigned to the order of the First National Bank of Wayland, N. Y., and destined for Chicago, 111. The contract or bill of lading made by the defendant was delivered to the plaintiff and the same was attached by the latter to a sight draft upon Train, Letterman & Ford, of Chicago, 111., for $660, payable to the order of the said First National Bank of Wayland, N. Y.; and this draft was, with the bill of lading, sent through the bank for collection. An oral contract for the purchase of said apples had been made prior to their delivery to the defendant by an agent of Train, Letterman &' Ford, whereby he agreed on behalf of said company to purchase said apples at $2.75 per barrel. No payment or written memorandum was made of such purchase. The bill of lading provided: “ Inspection of property covered by this bill of lading will not be permitted unless provided by law, or unless permission is indorsed on this original bill of lading or given in writing by the shipper. * * * The carrier or party in possession of any of the property herein described shall be liable for any loss thereof, or damage thereto except as hereinafter provided.” The contract further provided that the defendant should not be hable for loss, damage or injury not occurring on its own road, “except as such liability is or may be imposed by law.” Before the apples were shipped a few barrels of them were inspected by the agent of the Chicago firm. They arrived in Chicago on the sixth of November, and the yard agent of the railroad company erroneously entered the shipment as if there were no restrictions as to inspection in the bill of lading. The firm of Train, Letterman & Ford was notified by the defendant of the arrival of the apples in compliance with the direction contained in the bill of lading. It sent two employees to the freight yard of the defendant and the yardmaster unsealed the car, and these employees, with his permission, inspected about sixteen barrels of these apples, and thereafter resealed the car. The Chicago company refused -to receive the apples and the plaintiff commenced this action of trover against the defendant. There is no proof that the apples were damaged, or that there was any loss or injury to the plaintiff — 333 — by reason of the inspection made by Train, Letterman & Ford in violation of the agreement set forth in the bill of lading. The plaintiff founds her right to recover upon a clause in an act of Congress regulating commerce between the States, and which is designated as the Carmack amendment to the Hepburn Act, , being an amendment to the Interstate Commerce Act (approved February 4, IBS'!, in effect sixty days thereafter), and which Hepburn Act as thus amended is chapter 3591 of the first session of the fifty-ninth Congress, and became a law sixty days after June 29, 1906, the date of its approval. Section 20 of the original act was amended by section 7 of the amendatory enactment, and, among the provisions added by the amendment, is the following: “That any common carrier, railroad, or transportation company receiving property for transportation from a point in one State to a point in another State shall issue a receipt or bill of lading therefor and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common carrier, railroad, or transportation company to which such property may be delivered "or over whose line or lines such property may pass, and no Contract, receipt, rule, or regulation shall exempt such common carrier, railroad, or transportation company from the liability hereby imposed: Provided, That nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under existing law.” (See 24 U. S. Stat. at Large, 386, § 20, as amd. by 34 id. 593, 595, § 7; 34 id. 838, Res. No. 47.) There is an added clause entitling the common carrier, railroad or transportation company issuing the bill of lading to recover of the carrying company “on whose line the loss, damage, or injury shall have been sustained, the amount of such loss, damage, or injury as it may be required to pay to the owners of such property.” (Id.) Irrespective of this amendment, the initial carrier might by contract make itself liable for the delivery of property accepted by it for transportation to the point of destination wherever in transit the loss might occur. Unless it did so extend its liability its obligation to the shipper terminated upon the safe delivery of the goods to the first connecting carrier on the — 334 — route. (Atlantic Coast Line v. Riverside Mills, 219 U. S. 186, 196 et seq.) ■ The effect of the Carmack amendment as to interstate shipments is to make the connecting carriers the agents of the initial carrier, the same as if it had contracted for through carriage to the point of destination. (S. C., 196. See, also, p. 200 et seq.) This act made a radical change in the obligation imposed upon the first carrier, and Congress defined the extent of the liability which it incurred for loss of property received by it and lost in transit beyond its own line. The section provides that the carrier accepting the property for interstate shipment “shall be liable * * * for any loss, damage, or injury to such property ” en route. The act itself did not provide for any specific bill of lading or shipping contract. Eepresentatives of the common carriers and transportation companies and of the shippers, after many conferences, agreed on a formal bill of lading to make^ effective in equity to all parties the amendment adverted to, and this uniform bill of lading, so called, was on June 22, 1908", approved by the Interstate Commerce Commission. (Matter of Bills of Lading, 14 I. C. C. Rep. 346.) The bill of lading so approved contained this provision: “Inspection of property covered by this bill of lading will not be permitted unless provided by law or unless permission is indorsed on this original bill of lading or given in writing by the shipper.” The Carmack Act contained no provision prohibiting the inspection of property at the point of destination. Where the right of the shipper and carrier are not regulated by agreement, the right of the consignee to inspect exists. (Hutch. Carriers [3d ed.], § 733; Brand v. Weir, 27 Misc. Rep. 212, 214.) And there was no inhibition of that rule by the act of Congress. The matter was adjusted by agreement, and the parties to this action in the bill of lading, we may assume, were endeavoring to comply with the agreement of the shippers and carriers and approved by the Interstate Commerce Commission, and in furtherance of the provisions of the Carmack amendment quoted. The use of this bill of lading is not obligatory — 335 — upon either shipper or carrier. If it is adopted as the agreement of the parties and loss or damage occurs by reason of a breach of any of the provisions contained in it through the fault of a connecting carrier, the initial carrier must stand the loss. The bill of lading did not extend the liability beyond the scope of the Carmack amendment. An initial carrier is not made liable for conversion because a company having the custody of the property permits it to be looked at either by the consignee or any one else. If an examination of the property in violation of the agreement between the parties causes damage to it, then the first acceptor may be made to pay for that damage. In the present case the evidence undisputably establishes that the carrier at the point of destination permitted an inspection of the apples, and hence the defendant, in pursuance of the Carmack Act, must respond for whatever loss resulted to the plaintiff by the breaking of the agreement. The extent of the loss or injury the plaintiff must prove. There is no claim that the apples were injured by the inspection, or that the refusal of the Chicago firm to accept the apples, which they were not legally bound to purchase, was by reason of this inspection. There is not the slightest proof of any loss or damage or injury to the fruit. On the contrary, the proof shows that they were not injured at all by the inspection. The railroad company retained the actual possession of the property. Its dominion over it was not surrendered, and the plaintiff was promptly notified by Train, Letterman & Ford that they did not wish the apples, and plaintiff refused to receive them from the railroad company. It knew possession of the apples was not to be given to the Chicago firm until it had honored the draft upon it. The railroad company did violate its agreement, and the measure of its liability for that breach was the loss or injury to the apples. Without regard to the Carmack amendment, and the approval of the uniform bill of lading, the courts have held that conversion did not he for an unauthorized inspection of goods at the point of destination. (Dudley v. Chicago, M. & St. P. R. R. Co., 58 W. Va. 604; Sloan v. Carolina Central R. R. Co., 36 S. E. Rep. 21; Yuille-Miller Co. v. Chicago, I. & L. — 336 — Ry. Co., 128 N. W. Rep. 1099. See, also, Wamsley v. Atlas Steamship Co., 168 N. Y. 533.) In the case first cited apples were inspected at the point of destination. They were in barrels, consigned to the shipper, and were taken from the car and placed on the wagon of one Sharp, who was notified of their arrival in compliance with the directions of the plaintiff shipper. After they were inspected by an agent of Sharp, they were replaced in the car from which they had been removed, and Sharp refused to accept the apples. Sharp did not produce the bills of lading, or show any right to the possession of them. The railroad company permitting the inspection was sued in conversion, and the Court of Appeals of West Virginia held that conversion would not lie. The court, in commenting on the inspection and the effect of it, used this language (at p. 607): “ Sharp’s agent was simply permitted to enter the cars, set barrels out in his wagon, open them, and examine the apples. Then they were put back in the car and it was resealed by the agent. It may be true that he had no right to do so, and that the defendant did wrong in permitting the inspection, no evidence of title or right to possession having been shown, but it is a non sequitur to say, upon these facts, there was a delivery. It may have been an unauthorized act of dominion over the property; but whose act was it ? Clearly that of the railroad company, for the property was still in its actual and legal custody. It never parted with its possession. Hot every wrongful act on the part of a common carrier authorizes an action against it for a conversion. Where goods intrusted to a common carrier are injured only, the owner’s remedy is for damages for the injury, not their value. * * * What is the nature of the plaintiff’s injury here? Inspection did not injure the property, so far as disclosed. It prevented the consummation of a sale to Sharp. Can that constitute the basis of an action for the value of the property ? That it could not is so obvious that no such claim is made, and this branch of the contention is founded upon the extremely fanciful theory of a technical delivery, for which no authority has been found.” But under the Carmack Act the limit of the loss which the shipper has suffered is prescribed. If the property is sold with — 337 — out authority so that the carrier asserts title in hostility to the claim of the shipper, an action of conversion may be maintained. No such deprivation of ownership is shown in this case. The judgment should be affirmed, with costs. All concurred; Foote, J., not sitting. Judgment affirmed, with costs.