Western and Atlantic Railroad v. Ohio Valley Banking & Trust Co.

Fish, J. In the absence of the agreement or custom existing among Waller & Co., the Atlanta Grocery Co., and the Western & Atlantic Railroad Co., the defendant, prior to the issuance of the bills of lading by the Louisville & Nashville Railroad Co., the initial line, it was the duty of the defendant, under the terms of the bills of lading and the way-bills it received with the corn, to safely transport the corn from Chattanooga to Atlanta within a reasonable time, and deliver it at the latter place to the connecting line en route to Charleston, ■there to be delivered to the order of the consignors. While the Ohio Banking & Trust Co., the plaintiff, as transferee of the bills of lading, having a special property in the corn as security for the payment of the drafts on the Atlanta Grocery Co., which it had discounted, had the right, subject to the defendant’s claim for the difference in freight, to change the destination of the corn and have it stopped in Atlanta, the Atlanta Grocery Co., which the bills of lading and the way-bills plainly indicated was not the consignee or owner of the. corn, had no such authority. 5 Am. &Eng. Enc. L. 214, 215. What effect did the agreement or custom existing among the consign [516] ors, the Atlanta Grocery Go., and the defendant, that the Atlanta Grocery Co. could, without producing the bills of lading, stop the corn in Atlanta, have upon the rights of the plaintiff, which was a bona fide holder of the bills of lading, for value, and without notice of such agreement or custom ? In National Bank v. Atlanta & Charlotte Railway Co., 25 S. C. 216, it was held that where time drafts, accompanied by indorsed bills of lading of cotton, were cashed by a bank, any arrangement between the drawee of the drafts and the shipper, unknown to the bank, that the cotton should be delivered to the drawee without the production of the bills of lading, would be a fraud on the bank, and would not excuse an improper delivery by the carrier to such drawee. The case of North Pennsylvania Railroad Co. v. Commercial Bank, 123 U. S. 727, was an action by the assignee of certain freight receipts for cattle shipped, to recover damages of the carrier for a misdelivery. The only defense'was, that the cattle had been delivered to the party whom the carrier had been instructed to notify of their arrival, although such party presented no bill of lading or freight receipt. It was further claimed that such delivery was according to the custom and course of business of the parties. But it not appearing that this custom was known to the holder of the receipts or bill of lading, it was held that the delivery set up was not a defense. “A delivery by the carrier upon the production of an unindorsed bill of lading will not be excused merely upon proof of a custom to deliver without an indorsement, unless it can be clearly shown that the party thereby damaged was aware of the custom and acted with knowledge of it.” 5 Am. & Eng. Enc. L. (2d ed.) 209, and cases cited in n. 3. It seems that the principle laid down by these authorities, to the effect that the rights of one who is a bona fide holder of a bill of lading, and without notice, will not be affected by a delivery of the goods to the person to be notified of their arrival, without the production of the bill of lading, and in pursuance of an agreement between such person and the consignor, or of a custom existing among the parties, sustains the position that the rights of the plaintiff in this case as against the defendant were not affected by the arrangement or custom, [517] unknown to plaintiff, that the Atlanta Grocery Co., without the production of the bills of lading, should have the right to •change the destination of the goods. One of the common uses of bills of lading is to enable sellers of goods to obtain advances upon their shipments by .drawing on the purchasers for the price of the goods, attaching the bill of lading to the draft, and having the draft discounted by some bank, which holds the bill of lading and relies upon its terms as security for the payment of the draft. The carrier must have knowledge that the bill of lading may be so used and thus get into the hands of a bona fide holder, and is bound to see that the goods are not delivered until the draft is paid and the bill of lading produced. To permit the rights of a bank, in goocl faith and without notice, discounting a _draft with a bill of lading attached, and_ relying on the terms of the bill of lading as security, to be affected by an existing arrangement or custom among the consignor, the purchaser or "person to be notified of arrival, and the carrier, that goods should be delivered to the purchaser or person to be notified, "or that he •shouldTiave the right to change their destination, without payment of the draft and production of tbh'ibMlQf_lading, would be a gross fraud upon the bank, and manifestly result in preventing shippers getting advances on goods .sold, by drawing for the purchase-price, attaching draft to bill of lading, and having same discounted. It may be that the judge below, who tried this case without a jury, while admitting the evidence as to the agreement or custom mentioned, did not consider it when he came to render his judgment, but decided the case as if no such agreement or custom had been proved. The evidence .admitted upon this subject was clearly incompetent. The general rule is, that a bill of lading, as a contract expressing the terms and conditions upon which the property is to be transported, is to be regarded as the sole evidence of the final agreement in which are merged all prior and contemporaneous agreements of the parties, and, in the absence of frau'd or mistake, its terms or legal effect, when free from ambiguity, can not be explained, added to, or contradicted by parol. 4 Am. •& Eng. Ene. L. 536. Nor is evidence of usage admissible to [518] control, vary, or contradict the positive stipulations of a bill of lading. Ib. 545. The liability of a common carrier ceases if the goods are taken from his possession by legal process (Savannah R. Co. v. Wilcox, Gibbs & Co., 48 Ga. 432), but in order that such a seizure may excuse him, it must have been made -without’laches, connivance, or collusion on his part. Hutch. Car. §4916. In the present case the defendant, without any legal authority for so doing, stopped the four cars of bulk corn, which were en route to Charleston, in Atlanta, permitted the Atlanta Grocery Co. to have the corn sacked, and then stored it in its own warehouse in Atlanta, where it remained for nearly two months, and was then levied upon as the property of Waller & Co., under an attachment sued out against that firm by the Atlanta Grocery Co. But for the wrongful stoppage and storage of the corn in Atlanta by the defendant, it is quite certain that it would not have been seized by the sheriff, and the defendant should not be permitted to plead, as an excuse for its failure to deliver it upon the plaintiff’s demand, a seizure which was brought about in consequence of its own unauthorized and wrongful act. The judgment of the court was demanded under the law and the facts. Judgment affirmed. All the Justices concurring.