Arkansas Southern Ry. Co. v. German Nat. Bank

• Citation: 92 S.W. 522
• Parties: ARKANSAS SOUTHERN RY. CO. v. GERMAN NAT. BANK.
• Decision Date: 20 January 1906
• Court: Supreme Court of Arkansas

Page 522

92 S.W. 522

ARKANSAS SOUTHERN RY. CO. v. GERMAN NAT. BANK.

Supreme Court of Arkansas.

January 20, 1906.

Appeal from Circuit Court, Union County; James S. Steel, Judge.

Action by the German National Bank against the Arkansas Southern Railway Company. From a judgment for plaintiff, defendant appeals. Affirmed.

Rose, Hemingway & Rose and Gaughan & Sifford, for appellant. Ratcliffe & Fletcher and Smead & Powell, for appellee.

BATTLE, J.

The German National Bank brought an action against the Arkansas Southern Railway Company, to recover the value of cotton on bills of lading issued by the company for the cotton, and assigned to the bank; the cotton never having been delivered.

The facts in the case are substantially as follows: Alphin & Lake Cotton Company were dealers in cotton at Little Rock, Ark., and were the principal owners of a compress at El Dorado. They purchased cotton at Bernice, La., and at Junction City, Ark., and at other places along the road of the railroad company. At Bernice the cotton purchased was paid for by the Bank of Bernice and shipped in its name over the railroad of the defendant to El Dorado, a terminus of the railroad, about 30 miles from Bernice. Bills of lading were issue to the shipper in which it undertook to deliver the cotton to shipper's order at its destination. They were forwarded to the Bank of Little Rock with drafts on Alphin & Lake Cotton Company attached for collection. Nine hundred and fifty one bales of cotton were purchased by Alphin & Lake and shipped in the name of the Bank of Bernice over defendant's road from Bernice to El Dorado. Bills of lading were issued for all of them, and forwarded to the Bank of Little Rock with drafts attached in the manner indicated.

"Cotton at Junction City was handled very much in the same way, except that the bills of lading showed Alphin & Lake Cotton Co., as consignor, and the bills of lading with drafts for the price attached, were forwarded to the Bank of Little Rock.

"When the drafts and bills of lading arrived at Little Rock, Alphin & Lake Cotton Co. would draw drafts for the amount on the Bank of Little Rock, which would pay the same by taking up the original drafts for the price of the cotton, and would retain the bills of lading as security for the amounts and all other indebtedness Alphin & Lake Cotton Co. owed that bank.

"The bills of lading were all to shipper's order, care of compress, El Dorado, Ark., notify Alphin & Lake Cotton Co. The cotton was usually loaded on the cars before the bills of lading were signed, and usually left the shipping station the same or next day after the bills of lading were signed up, and reached El Dorado within 24 hours after it left Bernice and was delivered to the compress company for account of Alphin & Lake Cotton Co.

"The railroad had no warehouse or place for delivery or storage at El Dorado. It only had a joint track with the St. Louis, Iron Mountain & Southern Railroad Co., and the two roads maintained a joint agent, Hutchinson, at that place. The Arkansas Southern Railroad Company delivered all cotton which came in over its road at the compress. It had no cotton platform, and the compress was the only place it had for the delivery of cotton. Before the cotton was delivered to the compress, a memorandum was made of it in a little book by the railroad, showing the initial and number of the car, the number of bales in the car, and the place of shipment. The cotton was checked up by Mr. Wright, assistant manager of the compress company and, if found correct, he wrote `O. K.,' and signed his name on it with the date of his O. K.

"In delivering cotton to the compress company no other directions were given to it than that contained in this little book. Nothing was said about it in any other way. It was just delivered by that little book, and that was all that passed between the parties. It was always supposed to belong to Alphin & Lake Cotton Co., by the compress and railroad, and was unloaded at once. All the compress did was to count the cotton and O. K. the book as to the number of bales. Neither `S. O.,' meaning `shipper's order,' nor `care of the compress company,' was on this little book. S. O. appears to be upon the book now, but was placed there after the cotton was delivered. It was not on the waybill from which the book was made up."

The cotton was treated as belonging to Alphin & Lake Cotton Company and was delivered without taking up the bills of lading.

"On December 6, 1902, Lake applied to the German National Bank, which advanced $17,806 on bills of lading for 558 bales of cotton, and on December 11 the bank advanced $19,200 on bills of lading for 441 bales, with the understanding that the bills of lading first delivered should also stand for the last advancement. At the time Lake applied for the first advancement, the bills of lading were in the hands of the Bank of Little Rock. He stated that the Bank of Little Rock had required Alphin & Lake Cotton Co. to reduce its account, and a draft was drawn by the company upon the bank in favor of the Bank of Little Rock, with the bills of lading attached, which was presented by and paid to the Bank of Little Rock. At the time the advancement for $19,200 was made the bills of lading were the property of the Bank of Little Rock, and Lake was permitted to take them from the Bank of Little Rock to the German National Bank with the understanding that they or the money for them should be returned to the Bank of Little Rock. The German National Bank issued $10,000 in New York exchange in favor of the Bank of Little Rock, and paid $9,200 in cash, which Lake and Perrie handed to the Bank of Little Rock in lieu of the bills of lading, and the account of Alphin & Lake Cotton Company was credited with, $19,200 by the Bank of Little Rock."

The German National Bank lost the cotton. It was delivered to other parties. The bank recovered judgment in this action; and the defendant appealed.

Is appellant responsible for the loss of the cotton?

At common law a bill of lading is a muniment of title to the goods or property therein specified, is a symbol or representative of the goods, "when properly indorsed and delivered, with the intention of passing the title to them, is a symbolic or constructive delivery of the goods themselves; and when assigned, the carrier, having notice of the assignment, becomes bound to deliver the goods to the assignee. If the goods, by the terms of the bill of lading, are deliverable to the order of the shipper, the carrier should not deliver except upon the production of the bill of lading properly indorsed by the shipper; for this is notice to the carrier that the shipper intends to retain in his power the ultimate disposition of the goods." North Pennsylvania Railroad Company v. Commercial Bank of Ohio, 123 U. S. 727, 734, 736, 8 Sup. Ct. 266, 31 L. Ed. 287; The Thames, 14 Wall. 98, 20 L. Ed. 804; Hutchinson on Carriers (2d Ed.) §§ 129, 130; Daniel on Negotiable Instruments, §§ 1728, 1731.

The responsibility of the carrier for the goods continues after their arrival at the place of destination, until they are ready to be delivered and the owner or consignee has had a reasonable time and opportunity to examine them and take them away. If they are not called for by the party entitled to them within that time, it is the duty of the carrier to retain them until they are claimed or store them prudently for and on account of their owner. When his responsibility as a carrier ceases he becomes liable for the goods as a warehouseman. He is responsible, either as carrier or warehouseman, until the goods are properly delivered. The bill of lading is evidence of that obligation. North Pennsylvania Railroad v. Commercial Bank, 123 U. S. 727, 734, 736, 8 Sup. Ct. 266, 31 L. Ed. 287; The Thames, 14 Wall. 98, 20 L. Ed. 804; The Titania (D. C.) 124 Fed. 975; Blumenthal v. Brainerd, 38 Vt. 402, 91 Am. Dec. 350.

For the enforcement of these duties and the protection of the parties in interest, the statutes of this state, provide: "Warehouse receipts given by any warehouseman, wharfinger or other person or firm for any goods, wares, merchandise, cotton, grain, flour or other produce or commodity, stored or deposited, and all bills of lading and transportation receipts of every kind given by any carrier * * * may be transferred in writing thereon, and the delivery thereof so indorsed, and any and all persons to whom the same may be transferred shall be deemed and held to be the owner of such goods, wares, merchandise, cotton, grain, flour or other produce or commodity, so far as to give validity to any pledge, lien or transfer given, made or created thereby, as on the faith thereof, and no property so stored or deposited, as specified in such bills of lading or receipts, shall be delivered except on surrender and cancellation of such receipts and bills of lading; provided, that all such receipts and bills of lading which shall have the words, `not negotiable', plainly written or stamped on the face thereof, shall be exempt from the provisions of this act." Kirby's Dig. § 530.

And the act further provides: "Any warehouseman, wharfinger, forwarder or other person who shall violate any of the provisions of this act shall be deemed guilty of a criminal offense, and upon indictment and conviction shall be fined in any sum not exceeding five thousand dollars, or imprisoned in the penitentiary of this state not exceeding five years, or both; and all and every person or persons aggrieved by the violation of any of the provisions of this act may maintain an action at law against the person or persons, corporation or corporations violating any of the provisions of this act, to recover all damages which he or they may have sustained by reason of any such violation as aforesaid, before any court of competent jurisdiction, whether such person or persons shall have been convicted of fraud as aforesaid under this act or...