Kewanee Private Utilities Co v. Norfolk Southern R. Co

• Decision Date: 16 March 1916
• Citation: 88 S.E. 95
• Parties: KEWANEE PRIVATE UTILITIES CO. v. NORFOLK SOUTHERN R. CO.
• Court: Virginia Supreme Court

88 S.E. 95

KEWANEE PRIVATE UTILITIES CO.

v.NORFOLK SOUTHERN R. CO.

Supreme Court of Appeals of Virginia.

March 16, 1916.

Error to Circuit Court of City of Norfolk.

Action by the Kewanee Private Utilities Company against the Norfolk Southern Railroad Company. From a judgment for defendant, plaintiff brings error. Reversed.

E. R. F. Wells, of Norfolk, for plaintiff in error.

Jas. G. Martin, of Norfolk, for defendant in error.

KEITH, P. The Kewanee Private Utilities Company, a private corporation, brought suit against the Norfolk Southern Railroad Company for the wrongful delivery of certain freight There was a verdict and judgment in favor of the defendant, to which a writ of error was awarded.

The facts are as follows: in September, 1914, one H. H. Elliott ordered from the Kewanee Private Utilities Company, through its New York sales agent, two water systems, for each of which he agreed to pay $195.25, less a certain discount if payment were made promptly. It was agreed between the plaintiff and Elliott that the water systems were to be shipped to the order of the plaintiff as consignee, with instructions on the bills of lading to notify Elliott, and that drafts were to be drawn on Elliott for the purchase price of each water system, to which drafts the corresponding bills of lading were to be attached, and together sent to a Norfolk bank for collection. The bills of lading were to be delivered to Elliott only on the payment of the drafts.

These shipments are commonly known as shipments "to order notify"; that is, the bill of lading is made out to the order of the consignor as consignee, with written directions on it to notify the person on whom the draft, to which the bill of lading is attached, has been drawn, so that this person can pay the draft, obtain the bill of lading, and thereby get possession of the shipment from the carrier.

in accordance with the terms of this agreement with Elliott the plaintiff, during the month of September, 1914, shipped two water systems to its own order, one being consigned to itself at Pungo, Princess Anne county, Va., a point on the line of railroad of the Norfolk Southern Railroad Company, and the other consigned to itself at Back Bay, Princess Anne county, Va., another point on the line of the Norfolk Southern Railroad Company. The shipments were made to these points at the request of Elliott, who expected to sell these water systems to farmers residing near those points. Certain portions of each water system were shipped by the plaintiff from Kewanee, 111., and certain other portions were shipped by it from its factory at Lancaster, Pa.; separate bills of lading being taken for each shipment Each bill of lading contained the following provision:

"The surrender of the original order bill of lading, properly indorsed, shall be required before the delivery of the property."

in due course of time these water systems were received by the Norfolk Southern Railroad Company, the terminal carrier, and were transported by it to the respective points of destination. The drafts with bills of lading attached were sent on to the Norfolk National Bank of Norfolk, Va., for collection, and Elliott received notification from the bank, but paid no attention to the notice, and did not pay the drafts. Accordingly, after holding the drafts for some little time, the bank returned them, with the bills of lading attached, to the plaintiff at Kewanee, 111., and they never have been paid by Elliott or any one else.

in the meantime Elliott, who was in no sense the plaintiff's agent, had on his own account effected sales of the two water systems to two farmers in Princess Anne county, and they had obtained possession of them from the respective agents of the Norfolk Southern Railroad Company at Pungo and Back Bay, who delivered the water systems to the farmers without requiring the presentation and surrender of the bills of lading. The plaintiff was not informed of these facts until some time after, in the month of December. The drafts not having been paid by Elliott, the plaintiff, in December, 1914, sent its New York sales agent, F. E. Swan, to Norfolk to take up this matter with Elliott, and to try to effect a collection from him of the money due on the drafts. On December 10, 1914, Swan had an interview with Elliott, when for the first time he was informed by Elliott that the railroad company had delivered these systems to two of his subpurchasers. Swan then told him that he would go down to those two stations on the Norfolk Southern Railroad and make some investigation of the agents as to why they had disposed of these water systems as they had done but Elliott told him that he would be wasting his time and car fare, and that he would give him a check for theentire amount due. Thereupon Elliott gave Swan his check on the National Bank of Commerce of Norfolk, Va., dated December 10, 1914, payable to the order of the Kewanee Private Utilities Company, for the sum of $382.70, the amount of the purchase price of the two water systems, less discount, but requested Swan not to present it for payment until the following Monday or Tuesday, for the reason that he did not have any money in bank to meet it. This was agreed to.

Swan took the check, but did not surrender to Elliott the drafts and bills of lading, which were at that time in Swan's possession, nor did he give Elliott any receipt for the check or have any other agreement with him in reference to the check than that above mentioned. He mailed the check to the New York office of the company, from there it was sent to the home office at Kewanee, 111., and in due course it was sent to the National Bank of Commerce, of Norfolk, Va., for collection, and was dishonored. Nothing whatever has ever been paid to the plaintiff on account of the purchase price of these water systems, or on account of this check.

On January 16, 1915, written demand was made on the Norfolk Southern Railroad Company for the value of these shipments, which demand was refused, and shortly thereafter this action was instituted by the plaintiff against the railroad company to recover the value of the shipments.

At the conclusion of the evidence the plaintiff prayed the court to grant two instructions, both of which were refused, and on motion of the defendant the court granted the following instruction:

"The court instructs the jury that if they believe from the evidence that after the railroad company delivered the property the plaintiff accepted a check from Mr. Elliott, such acceptance amounted to a ratification of the delivery, and they must find for the defendant, even though the check was not paid."

The two instructions asked for by the plaintiff are as follows:

"(1) The court instructs the jury that if they believe from the evidence that the defendant railroad company delivered to persons other than the plaintiff the shipments mentioned and described in the declaration, without obtaining the surrender of the bills of lading therefor, or without authority from, or subsequent ratification by the plaintiff, the holder of the bills of lading, then the plaintiff is entitled to recover of the defendant the value of the goods, with interest from the date of delivery.

"(2) The court instructs the jury that the giving of a check by a debtor to his creditors for an antecedent debt is not an absolute abatement and extinguishment of that debt, in the absence of an agreement between the parties giving it that effect: it is only a means of payment, and the debt will not be extinguished unless and until the check be paid. If, therefore, at the time the plaintiff accepted the check from H. H. Elliott, it did not by agreement receive it in full payment and absolute discharge and satisfaction of the debt owing by him to the plaintiff, then the mere fact that said check was accepted by the plaintiff does not preclude it from maintaining this action against the railroad company."

To the refusal of the court to grant instructions 1 and 2, asked for by the plaintiff in error, and the granting of the instruction No. 3, asked for by the defendant in error, the plaintiff in error, by its attorney, then and there excepted, and now assigns as error: (1) The refusal of the court to grant instructions Nos. 1 and 2, prayed for by it; (2) the action of the court in granting instruction No. 3, prayed for by the defendant; (3) the refusal of the court to set aside the verdict and grant a new trial, on the ground that the verdict was contrary to the law and the evidence; and (4) the refusal of the court to render a judgment in favor of the plaintiff non obstante veredicto.

We shall first consider whether or not the trial court erred in refusing instructions 1 and 2, offered by plaintiff in error.

In Blair & Hoge v. Wilson, 28 Grat. (69 Va.) 165, Judge Burks, in treating of this subject, says:

"The giving of a check for an antecedent debt is not an absolute payment and extinguishment of the debt, in the absence of an agreement giving it that effect. Ordinarily it is only a means of payment, and the debt will not be extinguished unless and until the check be paid, or unless loss be sustained by the drawer in consequence of the laches of the holder, in which case the debt will be discharged in proportion to the loss sustained. If the check be not paid, and the payee is without fault, his right of action against the drawer for the debt, which has been merely suspended by the giving of the check, revives, and he may have recourse to the drawer, either upon the debt or upon the check at his option."

in the case before us there is no evidence whatever that the check has been paid, that any loss was sustained by the drawer in consequence of the laches of the holder, or of any agreement whatever making the giving of the check an absolute extinguishment of the antecedent obligation. That case is the unquestioned law of this state. That there was an antecedent obligation upon Elliott's part appears from the...