Estherville Produce Co. v. Chicago, RI & PR Co.

• Decision Date: 05 April 1932
• Docket Number: 9264.,No. 9276,9276
• Citation: 57 F.2d 50
• Parties: ESTHERVILLE PRODUCE CO. v. CHICAGO, R.I. & P.R. CO. CHICAGO, R. I. & P. R. CO. v. ESTHERVILLE PRODUCE CO.
• Court: U.S. Court of Appeals — Eighth Circuit

57 F.2d 50 (1932)

ESTHERVILLE PRODUCE CO. v. CHICAGO, R.I. & P.R. CO.

CHICAGO, R. I. & P. R. CO. v. ESTHERVILLE PRODUCE CO.

Nos. 9276, 9264.

Circuit Court of Appeals, Eighth Circuit.

February 25, 1932.

Rehearing Denied April 5, 1932.

D.M. Kelleher, of Ft. Dodge, Iowa (Goheen, Goheen & Neuzil, of Calmar, Iowa, on the brief), for Estherville Produce Co.

R. L. Read, of Des Moines, Iowa (J. G. Gamble and A. B. Howland, both of Des Moines, Iowa, on the brief), for Chicago, R. I. & P. R. Co.

Before KENYON, VAN VALKENBURGH and GARDNER, Circuit Judges.

VAN VALKENBURGH, Circuit Judge.

The Estherville Produce Company, a co-partnership composed of H.D. Hinsch and Frank Koch, and suing as a firm under local practice, was engaged in the poultry and egg business at Estherville, Iowa. One of its regular customers, the commission firm of Levit & Woorman, had a place of business at 345 South Front street in Philadelphia, Pa., but usually received shipments on track 7-A, Pier 62 South, in said city. The produce company had had dealings with this Philadelphia firm for a period of about six months prior to November, 1928, during which time goods had been shipped directly to Levit & Woorman as consignee. Early in November it determined to make a change in the method of consignment, with the object, as Mr. Koch states, "to assure ourselves, to make sure, that that property belonged to us until it was paid for." This purpose was communicated to Levit & Woorman by telephone prior to November 6, 1928. On the last-mentioned date the produce company shipped a car of live poultry to Philadelphia. The Chicago, Rock Island & Pacific Railroad was the initial carrier, and one Anthony Stoery was the agent in charge of its offices at Estherville. The circumstances attending this consignment are best stated in the language of Mr. Hinsch, whose testimony in this regard is uncontradicted:

"I think all of our shipping transactions went through the same man, through Stoery. The transaction of November 16, 1928, and the prior transactions were had on the railroad premises, in the office of the freight depot. The freight depot at Estherville is just across the tracks, I think, from the passenger depot. Estherville is a city of a little better than 5,000 population. I had a conversation with Anthony Stoery at or about the time of these transactions of November 6, 1928, and I talked to him with regard to the shipment we wished to make or were about to make. I told Mr. Stoery that I wanted to bill this car to ourselves at Philadelphia, and I would like to have an order bill of lading; a yellow bill of lading, whereon he told me that we could not ship poultry, live poultry, with an order bill of lading; we would have to use the common bill of lading. That wasn't something I said. He told me we would have to use the common bill of lading. So I told him that they would have to bill it that way but we wanted them billed to ourselves so it was our poultry when it got to Philadelphia. * * *

"Q. What further was said about the shipment? A. I told him I would like to have him put on `Notify Levit & Woorman when this shipment reaches Philadelphia', and he said he couldn't put that on, but he would put on `Spot at' or `In care of' and I told him I didn't care, just so the poultry would be ours on arrival in Philadelphia."

The bill of lading issued for this shipment of November 6, 1928, was a uniform straight bill of lading. In it the Estherville Produce Company was named as consignor and consignee, the destination was Philadelphia, Pa., and on it was this notation: "Spot at Levit & Woorman, 345 So. Front St., Philadelphia, Penn."

The produce company procured a draft for the amount of the shipment, and forwarded it, with this bill of lading attached, to a Philadelphia bank for collection. In this draft the payor was named as "Levit & Woorman, 345 So. Front St., Philadelphia, Pa." Upon arrival, in due course in Philadelphia, the car was placed on track 7-A, Pier 62 South, where, as has been said, Levit & Woorman usually received shipments of poultry. On November 12, 1928, the demurrage clerk for the Baltimore & Ohio Railroad, the receiving carrier, notified Levit & Woorman by mail of the car's arrival. In this notice Levit & Woorman were named as consignee. Upon receipt of this notice Levit & Woorman, by telephone and letter, instructed the Baltimore & Ohio to direct this car "to the same consignee at Weehawken, N. J., Erie R. R. delivery." The directions for this reconsignment were given on a new memorandum waybill, showing the new destination. The destination on the original bill of lading was not changed. No new bill of lading was issued, and the railroad did not demand nor receive the old one. Concerning this transaction, Woorman, of the Philadelphia commission firm, testified that this car "was diverted by me to Weehawken, N. J. and sold to Julius Kastein. That is, he handled it on consignment and paid our firm for it." Levit & Woorman, however, did not pay the Estherville Company. It was not until early in December that that company was advised that its draft had not been paid. January 9, 1929, Levit & Woorman were adjudged bankrupts. The produce company proved up its claim. A composition settlement was effected whereby it received a 10 per cent. dividend in cash, and 15 per cent. of its claim in notes. It brought suit against the Chicago, Rock Island & Pacific Railroad Company, appellee in cause No. 9276, to recover for the alleged wrongful diversion and resulting conversion of this car of poultry. At the trial the District Court directed a verdict in favor of the railroad upon the transaction above described, which formed the subject-matter of the first count of the petition of the produce company. It is to review the resulting judgment that this appeal in No. 9276 is taken.

The second count of the produce company's petition has to do with a second shipment by it to Philadelphia on November 13, 1928. This was pursuant to a telephone conversation on the tenth or eleventh of November between Koch and Woorman, as a result of which the latter sent to Estherville a caretaker named Williams to accompany the shipment. The produce company was named as consignor and consignee in a uniform straight bill of lading upon which appeared the following notation: "In care of Levit & Woorman, 345 So. Front St., Philadelphia, Penn."

En route, at Blue Diamond, Ill., Williams received instructions from Levit & Woorman by telegram to direct the car to Bridgeport, Conn., via New York Central Railroad. Williams executed a written order accordingly. The car, thus diverted, proceeded to Bridgeport, and was there unloaded by Levin Bros., to whom Levit & Woorman had sold the poultry. As before, a draft with bill of lading attached had been sent to a Philadelphia bank for collection, but this draft was never paid. Through the composition in bankruptcy above described, the produce company received a cash dividend of 10 per cent. and 15 per cent. in notes upon its claim against Levit & Woorman. It brought suit against the initial carrier to recover for the diversion and conversion of its property as above stated, this transaction forming the subject-matter of the second count of its petition. At the trial below, this count was submitted to the jury, which returned a verdict against the railroad, appellant in cause No. 9264. We shall dispose of this lastnamed controversy first.

In their brief, counsel for the railroad argued that, since Levit & Woorman were named in a straight bill of lading as the party in whose care the shipment was sent, they had a right to receive the car, and the railroad had a right to deliver it to them without surrender of the bill of lading; that the carrier was authorized to accept their order as to the place of delivery; that the car was in fact delivered to the party for whom it was intended, and that the fact that this delivery was made at Bridgeport instead of at Philadelphia is of no materiality.

It is to be kept in mind that, in this straight bill of lading the produce company was named both as consignor and consignee, thus, in any view, retaining ownership and control of the shipment until it reached its destination, and even there before delivery had been made and possession parted with. Hinrichs, Inc., v. Standard Trust & Savings Bank (C. C. A. 2) 279 F. 382; In re Nesto (C. C. A. 3) 270 F. 503, 507; Continental Nat. Bank v. Tremont Trust Co. (C. C. A. 1) 4 F.(2d) 219; In re Taub (C. C. A. 2) 7 F.(2d) 447, 451, 452; Southern Express Co. v. Dickson, 94 U. S. 549, 24 L. Ed. 285; Emmons Coal Mining Co. v. Norfolk & W. Ry. Co. (C. C. A. 3) 3 F.(2d) 525.

A diversion in transit, at the direction of the party in whose care the shipment is consigned, is not a delivery in accordance with the terms of the contract between shipper and carrier.

"Where the consignor is known to the carrier to be the owner, the carrier must be understood to contract with him only, for his interest, and upon the terms he dictates in regard to the delivery." Cooper, Jr., v. Bank of British North America (C. C. N. Y.) 30 F. 171, 173, citing Southern Express Co. v. Dickson, 94 U. S. 549, 550, 24 L. Ed. 285, which uses the language quoted and returns a negative answer to the following: "The question is, rather, where it is known that the goods are the property of the shipper, and have been shipped by him for delivery to the consignees as his agents at a distant place, can the carrier deliver the goods to such consignees or to their order at another place, or without starting them on their journey?"

It is held that the consignees there (and, it would follow, Levit & Woorman, in whose care the shipment was made, here) "are to be regarded simply as agents selected by him (consignor) to receive the goods at a place indicated." Here the ownership of the goods in the shipper was known to the carrier, both presumptively from the terms of the bill of lading, and actually,...