Int'l Prods. Co. v. Erie R. Co.

• Citation: 244 N.Y. 331,155 N.E. 662
• Parties: INTERNATIONAL PRODUCTS CO. v. ERIE R. CO.
• Decision Date: 23 February 1927
• Court: New York Court of Appeals

244 N.Y. 331

155 N.E. 662

INTERNATIONAL PRODUCTS CO.

v.ERIE R. CO.

Court of Appeals of New York.

Feb. 23, 1927.

Action by the International Products Company against the Erie Railroad Company. From a judgment of the Appellate Division (216 App. Div. 702, 213 N. Y. S. 826), affirming a judgment of the Trial Term entered on a directed verdict of a jury for plaintiff, defendant appeals.

Affirmed.

1. Warehousemen 22

Railroad, negligently giving erroneous information as to location of warehouse containing ocean shipment, held liable for insurance lost. Railroad, having contracted with importer to store ocean shipment on arrival at railroad's warehouse docks, and negligently giving erroneous information as to dock at which it was stored, even though before receipt of shipment by railroad, held liable to importer for amount of insurance it would have been entitled to had it not given misdescription to insurer in reliance on railroad's statement.

2. Torts 6

Words negligently spoken may justify recovery of proximate damage caused. In proper case, words negligently spoken may justify recovery of proximate damage caused by faith in their accuracy.

3. Warehousemen 34(9)

Contributory negligence of importer, relying on railroad's erroneous information as to location of warehouse containing ocean shipment, held for jury. Where railroad, which agreed with importer to received, and store on its dock, ocean shipment on arrival, gave importer erroneous information as to dock at which shipment was stored, in action by importer against railroad to recover amount of insurance it was entitled to if misdescription had not been given, importer held under facts not negligent as matter of law in not discovering railroad's error by inspection of bill of lading.

Appeal from Supreme Court, Appellate Division, First Department.

William C. Cannon, Theodore Kiendl and Russel S. Coutant, both of New York City, for appellant.

David Paine, of New York City, for respondent.

ANDREWS, J.

[1] Early in August, 1921, the plaintiff was expecting a valuable shipment consigned to it to arrive in New York on the steamer Plutarch. It was an importer selling the goods received to other customers. Consequently, it was necessary that such goods should be stored until resold, either in ordinary warehouses or in one maintained by some carrier, who might in turn send them over its lines to the ultimate consumer.

The plaintiff had adopted the first method, but now it seems to have thought that the second might be preferable. Therefore it inquired of the defendant what its prices would be, and arranged, while no definite contract was executed, that the goods when they arrived should be stored at the railroad company's warehouse docks.

The Plutarch was to dock in Brooklyn. There the Erie would receive the goods on its own lighters, transfer them to New Jersey, and then ship them on upon the order of the plaintiff. Both parties must have understood that at some period a bill of lading was to be issued, but certainly there would be some delay. It could hardly be issued simultaneously with the receipt of the goods on the lighters, and the custom seems to have been that, after the goods were stored by the railroad company in its warehouse, a notice of their receipt was to be given to the plaintiff, who then prepared a bill of lading in the usual form, signed it, sent it to the defendant, who in turn signed it and returned it to the plaintiff.

Here then were the parties both understanding that, when the goods arrived in Brooklyn, they were to be taken by the defendant to its docks, and there stored for a certain price, and that thereafter the ordinary bill of lading would be executed.

The Plutarch reached Brooklyn between August 10th an August 15th, and was unloaded in three or four days. The goods in question were covered by insurance until they reached the warehouse. Naturally the plaintiff was desirous of protecting itself from that time forward, and to protect itself it was essential that the particular warehouse in which they were stored should be made known to the insurer. Therefore, on August 17th, giving this reason for its question, it inquired of the defendant where the goods would be stored. The latter, taking time to obtain the required information, replied they were docked at dock F, Weekawken. From this reply the plaintiff had the right to infer that the goods were already received and stored. It immediately thereafter obtained its insurance, giving the same information to the insurer.

The answer was erroneous. In fact, the goods were not received from the steamer by the defendant until August 27th and August 31st. The plaintiff's officer, however, having charge of the transaction, did not know but what the representation was true, nor did the plaintiff itself know that it was not, unless it is a fact that under no circumstances might the defendant have obtained possession of the goods from the Plutarch without a socalled‘delivery order’ signed by the plaintiff. The latter did know that such an order was not given until August 26th, but, in the hurry of business, dealing with a responsible party, we have no reason to suppose that the Plutarch might not have delivered the goods, trusting to receive the ‘delivery order,’ if necessary, later. Certainly nothing in the testimony negatives this conclusion. We have then the false assurance as to an existing fact, given by one who had arranged to become, and who in fact subsequently did become, bailee of these goods, to the owner, to enable it to obtain valid insurance thereon, and in reliance upon which the owner acted.

One-half of the goods were in fact stored when they arrived, not on dock F, but on dock D; both docks belonging to the defendant. When the formal bill of lading prepared by the defendant some time later was returned to it early in September, a close examination of certain stamps impressed upon it would have revealed the truth. It was not discovered, however. In November dock D with the goods stored thereon was destroyed by fire. The plaintiff could obtain no insurance because of the misdescription in the policy. It therefore seeks to recover the insurance it would have been entitled to had it not given the misdescription in reliance on the statement of the defendant. The defendant denies liability on any theory, either of tort or of contract.

In view of Bush Terminal Co. v. Globe & Rutgers Fire Ins. Co. of City of New York, 182 App. Div. 748, 169 N. Y. S. 734, affirmed, 228 N. Y. 575, 127 N. E. 909, it concedes its liability had the goods been in its possession on August 17th. As, however, the facts show conclusively they were not, the plaintiff it says may not recover. We hold, however, that the plaintiff shows a cause of action on the theory of negligence, interpreting the conversation of August 17th as we have done.

Confining ourselves to the issues before us, we eliminate any theory of fraud or deceit. Had they been present, other questions would arise. Taylor v. Commercial Bank, 174 N. Y. 181, 66 N. E. 726,62 L. R. A. 783, 95 Am. St. Rep. 564. We come to the vexed question of liability for negligent language. In England the rule is fixed. ‘Generally speaking, there is no such thing as liability for negligence in word as distinguished from act.’ Pollock on Torts (12th Ed.) p. 565; Fish v. Kelly, 17 C. B. (N. S.) 194. Dicta to the contrary may be found in earlier cases. Burrowes v. Lock, 10 Ves. 471; Slim v. Croucher, 1 De Gex, F. & J. 518, discussed in Brownlie v. Campbell, L. R. 5 App. Cas. 925, 935. But since Derry v. Peek, L. R. 14 App. Cas. 337, although what was said was not necessary to the decision, the law is clearly to the effect ‘that no cause of action is maintainable for a mere statement, although untrue, and although acted upon to the damage of the person to whom the statement is made, unless the statement be false to the knowledge of the person making it’ (Dickson v. Reuter's Telegraph Co., Limited, L. R. [1877] 3 Com. Pl. 1), or, as said elsewhere, ‘we have to take it as settled that there is no general duty to use any care whatever in making statements in the way of business or otherwise, on which other persons are likely to act’ (9 Law Quarterly Review, 292). And the same principle has been applied in equity (Low v. Bouverie, L....