Canadian Northern Ry. Co. v. Northern Mississippi Ry. Co.

• Decision Date: 11 December 1913
• Docket Number: 3,890.
• Citation: 209 F. 758
• Parties: CANADIAN NORTHERN RY. CO. v. NORTHERN MISSISSIPPI RY. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

209 F. 758

CANADIAN NORTHERN RY. CO. v. NORTHERN MISSISSIPPI RY. CO.

No. 3,890.

United States Court of Appeals, Eighth Circuit.

December 11, 1913

H. V Mercer, of Minneapolis, Minn. (Hector Baxter, of Minneapolis Minn., on the brief), for plaintiff in error.

William A. Tautges, of Minneapolis, Minn., for defendant in error.

Before SANBORN and CARLAND, Circuit Judges.

SANBORN Circuit Judge.

This is an action against the Canadian Northern Railway Company which will be called the 'defendant,' for the value of certain rails and fasteners which it transported under bills of lading which specified the Northern Mississippi Railway Company, the plaintiff below, as consignor and as consignee, and stipulated, as to each carrier thereof over any portion of the route designated therein, that every service performed thereunder should be subject to the conditions specified in the bills of lading and that surrender of the bills properly indorsed should be required before delivery of the property. The ground of the recovery was that the defendant delivered the property to third parties without requiring a surrender of the bills of lading and refused to deliver it or to pay its value to the plaintiff, the consignee named in and the holder of the bills. The defenses were that the defendant delivered the property to the true owners, Shaw Bros., whose title was superior to that of the plaintiff, that the bills of lading were fraudulently issued to the knowledge of the plaintiff and that the plaintiff was estopped by its words and acts from asserting any title to or ownership of the property as against Shaw Bros. and the defendant. At the close of the trial the court instructed the jury that there was no substantial evidence to sustain the first and second defenses and submitted the question of the estoppel to them for decision.

The true construction of a certain contract of sale of property, of which that transported under the bills of lading was a part, determines the validity of the first defense to this action. If the effect of that contract was to transfer and vest in the vendees the title and ownership of the property it described at the time the contract was made, the defense may be sustained. If that was not the effect of the contract, the defense must fail. That contract was made on January 6, 1911, between the plaintiff, the owner of the property described therein, and the Jones Purchasing Agency, who sold and transferred all their right to and interest in the property to Shaw Bros. The provisions of the contract material to the question of title are that the parties to it agree that in consideration of $39,000 to be paid to the plaintiff as therein provided the plaintiff hereby sells and conveys to the agency certain rails, fasteners, locomotives, engines, cars, and railway equipment constituting a logging railroad, that the agency would pay $10,000 of the $39,000 in ten days by depositing it in the St. Anthony Falls Bank, that this $10,000 should be retained by the bank and paid to the plaintiff as the last payment on the purchase price of the property, that the agency should take possession of and remove the property from the right of way and load and ship it in the name of the plaintiff at the expense of the agency, that the plaintiff should draw drafts on the agency for the specified value of each shipment accompanied with bills of lading thereof, that the bank should collect and retain the proceeds of these drafts for the plaintiff until those proceeds and the $10,000 deposited with the bank should aggregate $39,000, and that upon the payment in this way of the entire $39,000 'all the remaining property hereinbefore described shall thereupon and thereafter become and be the property of said Jones Purchasing Agency and subject to their orders.'

The parties to this contract had the right and the power to make such an agreement of sale that the title and ownership of this property should vest in the vendees the instant the parties signed the agreement, and they had the right and the power to make such an agreement of sale that the title and ownership of no part of the property would pass from the vendor until the vendees had paid in cash for that part of the property. Which of these agreements have they made? The intention of the parties at the time their minds met upon the terms of the agreement must answer this question, and that intention must be deduced from the written agreement, the evidence in this case, and these established rules of law.

Under a contract of sale of personal property on credit, the title and ownership of the property vests in the vendee when the contract is signed and delivered, in the absence of evidence to the contrary. Leonard v. Davis, 66 U.S. (1 Black) 476, 483, 17 L.Ed. 222; Hatch v. Oil Co., 100 U.S. 124, 135, 136, 25 L.Ed. 554; Nash v. Brewster, 39 Minn. 530, 532, 41 N.W. 105, 2 L.R.A. 409; Case Rail v. Little Falls Lumber Co., 47 Minn. 422, 424, 50 N.W. 471; Arkansas Valley Land & Cattle Co. v. Mann, 130 U.S. 69, 74, 9 Sup.Ct. 458, 32 L.Ed.

854. Under a contract of sale of personal property for cash the title and ownership of the property remains in the vendor until the purchase price is paid in cash. National Bank of Commerce v. Burlington & N.R. Co., 44 Minn. 224, 231, 46 N.W. 342, 560, 9 L.R.A. 263, 20 Am.St.Rep. 566.

A bill of lading wherein the vendee is named as consignee, accompanied with a draft on him in favor of the vendor for the purchase price, is evidence that the parties intended the sale to be for cash and that the title and ownership of the property should not be transferred to or vested in the purchaser until the purchase price of it was paid. Greenwood Grocery Co. v. Canadian County Mill & Elevator Co., 72 S.C. 450, 52 S.E. 191, 2 L.R.A. (N.S.) 79, 110 Am.St.Rep. 6278 5 Ann.Cas. 261. A bill of lading wherein the vendor is named as consignee accompanied with a draft in his favor for the purchase price of the property is almost conclusive evidence that the parties intended that the title and ownership of the property should remain in the vendor until the purchase price was paid, and, when the bill of lading is accompanied with an order that the property shall not be delivered without a surrender of the bill of lading, the proof of that intention becomes so convincing that compelling evidence is required to overcome it. Dows v. National Exchange Bank, 91 U.S. 618, 631, 632, 23 L.Ed. 214; Portland Flouring Mills Co. v. British & F.M. Ins. Co., 130 F. 860, 864, 65 C.C.A. 344; Freeman v. Kraemer, 63 Minn. 242, 246, 247, 65 N.W. 455; Greenwood Grocery Co. v. Canadian County Mill & Elev. Co., 72 S.C. 451, 454, 52 S.E. 191, 2 L.R.A. (N.S.) 79, 110 Am.St.Rep. 627, 5 Ann.Cas. 261; Norfolk & Western Ry. Co. v. Sims, 191 U.S. 441, 448, 24 Sup.Ct. 151, 48 L.Ed. 254.

The provisions of the agreement between the vendor and vendee in this case that $10,000 of the purchase price should be deposited within ten days as the last payment on the purchase price of the property, that the vendees should remove and ship the property at their expense in the name of the vendor, and that the vendor should draw drafts in its favor accompanied with the bills of lading in its name for the value of each shipment, made it impossible for the vendees, without a violation of the contract, to obtain the use or benefit of any of the property until they paid for it in cash, and present almost conclusive evidence of the intention of the parties that the sale should be for cash and that the title and ownership of every part of the property should remain in the vendor until the vendees paid for it in cash, and the concluding stipulation of the agreement on this subject to the effect that after the entire $39,000 was paid, and not before, 'all the remaining property hereinbefore described shall thereupon and thereafter become and be the property of sid Jones Purchasing Agency and subject to their orders,' removes every lingering doubt that such was their intention. If it had been their intention and the effect of their contract that the title to the property should pass to the vendees when the contract was made, the title to this remaining property would have passed at that time and this stipulation would have been idle. But every provision of an agreement should have effect rather than that part should perish by construction and the intention of the parties to a contract must be deduced, not from specific provisions or fragmentary parts of the agreement, but from the entire contract, because the intent is not evidenced by any part or provision of it, nor by the contract without any part or provision, but by every part and term so construed as to be consistent with every other part and with the entire contract. United States Fidelity & Guaranty Co. v. Board of Com'rs, 145 F. 144, 148, 76 C.C.A. 114, 118; Jacobs v. Spalding, 71 Wis. 177, 189, 36 N.W. 608; Boardman v. Reed, 6 Pet. 328, 8 L.Ed. 415; Canal Co. v. Hill, 15 Wall. 94, 21 L.Ed. 64; O'Brien v. Miller, 168 U.S. 287, 297, 18 Sup.Ct. 140, 42 L.Ed. 469; Pressed Steel Car Co. v. Eastern Ry. Co., 57 C.C.A. 635, 637, 121 F. 609, 611; Uinta Tunnel, etc., Co. v. Ajax Gold Min. Co., 141 F. 563, 73 C.C.A. 35.

This contract, read and interpreted according to this rule compels the conclusion that the intention of the parties to it and its legal effect were to make the sale one for cash and to retain the title and ownership of every part of the property in the vendor until it was paid for in cash. Nor is there anything in the evidence in this case dehors the contract to cast doubt upon or to shake this conclusion. The defendant concedes that the plaintiff owned the property when the contract was made, that the $10,000 was never deposited, that the vendees had paid...