Lehigh Valley R. Co. v. John Lysaght, Limited

• Decision Date: 23 February 1921
• Docket Number: 108.
• Citation: 271 F. 906
• Parties: LEHIGH VALLEY R. CO. v. JOHN LYSAGHT, Limited. [1]
• Court: U.S. Court of Appeals — Second Circuit

271 F. 906

LEHIGH VALLEY R. CO. v. JOHN LYSAGHT, Limited. ^[1]

No. 108.

United States Court of Appeals, Second Circuit.

February 23, 1921

Hough Circuit Judge, dissenting.

Hornblower Miller & Garrison, of New York City (Lindley M. Garrison and Edgar H. Boles, both of New York City, George S. Hobart, of Newark, N.J., and Charles A. Boston, of New York City, of counsel), for plaintiff in error.

Hayden & Post, of New York City (W. K. Post, of New York City, of counsel), for defendant in error.

Butler Wycoff & Campbell, of New York City (Frederick B. Campbell and Thomas R. Rutter, both of New York City, of counsel), amici curiae.

Before WARD, ROGERS, and HOUGH, Circuit Judges.

WARD Circuit Judge.

Lysaght, Limited, is the holder of two through domestic bills of lading of the Missouri, Kansas & Texas Railway Company for transportation of plates of spelters from Kansas to New York, state of New York, for export, under which the Lehigh Valley Railroad Company is the last connecting carrier. The two cars arrived July 17 and 18, 1916, respectively, and the goods were destroyed by the explosion at the Black Tom Terminal on the night of July 29/30, considered in our opinion in the case of Lehigh Valley Railroad Co. v. Allied Machinery Co. of America, 271 F. 900, handed down herewith.

The defendant's tariff regulations applicable to the situation are:

'A-1. All carload shipments for delivery locally or to vessels in New York Harbor, transported under domestic bill of lading to New York, not consigned direct to an established freight station of this company, as shown in list of station deliveries on page 10 of this tariff, will be held in or on cars, piers or warehouses at Jersey City, N.J., or Jersey City (National Docks), N.J., until receipt of written order for disposition from consignee or party notified of arrival under the terms of the bill of lading, and while so held at Jersey City, N.J., or Jersey City (National Docks), N.J., awaiting such orders for disposition, the freight will be subject to car demurrage or storage rules as on file with the Interstate Commerce Commission, and the carrier shall not be liable for loss, damage or delay, except in case of negligence of the carrier.'

'16. Delivery orders and vessel permits limiting the time for delivery will only be accepted with the understanding that same will be accomplished with as reasonable dispatch as conditions and the general business of the company will permit.'

'8. Cars containing export freight (not subject to warehouse storage rules or not covered by through export bills of lading) will be allowed 15 days' free time at terminal points in New York Harbor.

'(b) Free time to be computed from the first 7 a.m. after the day on which notice of arrival is sent to consignee.

'Note.-- In computing time Sundays and legal holidays (national, state, and municipal) will be excluded. When a legal holiday falls on Sunday, the following Monday will be excluded.

'The foregoing rule will be effective on shipments forwarded from points of origin on and after May 2, 1916.' Section 1 of the bill of lading reads:

'No carrier or party in possession of any of the property herein described shall be liable for any loss thereof or damage thereto or delay caused by the act of God, the public enemy, quarantine, the authority of law, or the act or default of the shipper or owner, or for difference in the weights of grain, seed, or other commodities caused by natural shrinkage or discrepancies in elevator weights. For loss, damage or delay caused by fire occurring after forty-eight hours (exclusive of legal holidays) after notice of the arrival of the property at destination or at port of export (if intended for export) has been duly sent or given, the carrier's liability shall be that of warehouseman only.'

The plaintiff gave orders for delivery to the steamer at New York as follows:

'New York, 7/29/16.

'Messrs. Lehigh Valley Railroad Co., 6 Broadway, City-- Gentlemen: We inclose herewith original bills of lading indorsed notices of arrival and check for freight for the following cars, which are to be delivered to the S/S Wells City at Pier 69, North River, on August 2/16. We are inclosing check for freight and would request that you kindly send us receipted freight bills.

Car C., M. & St. P. 54326 932 plates of spelter

Car S.O.U. 27110 813 plates of spelter

Car N.W. 21715 837 plates of spelter

Car Erie 72290 832 plates of spelter

'The loading permit has been mailed direct to the S/S and we trust you will give this matter your immediate attention and see that these consignments are delivered within the time specified and that the dock receipts are sent to us at the earliest possible moment.

'Yours truly,

F. B. Vandergrift & Company, 'Wm. W. Rich, Pres.'

September 25, 1917, Lysaght, Limited, brought this action on the bills of lading against the railroad company as insurer without any charge of negligence. January 23, 1918, the defendant demurred to the complaint, on the ground that it did not state facts sufficient to constitute a cause of action, which demurrer was overruled by L. Hand, J.

June 1, 1918, the defendant's answer admitted the foregoing statements, but denied knowledge or information sufficient to form a belief as to whether the goods were destroyed by fire or exclusively by fire. It also set up three separate defenses, summarized by defendant's counsel as follows:

'(1) That the railroad company and plaintiff were alike innocent victims of a great public calamity, through the explosion of munitions of war in course of transportation in connection with the European War, which exploded without fault of defendant from causes beyond its control, and produced results likewise beyond its control.

'(2) That the said explosives were in interstate and foreign commerce in compliance with the Interstate Commerce and Federal Explosives Transportation Law, and the regulations of the Interstate Commerce Commission, with all of which the railroad company had duly complied; that the destruction complained of was caused by such explosives, which were munitions of war; and that their explosion and its results was the result of causes wholly beyond defendant's control.

'(3) That such explosives as aforesaid were not in the railroad company's possession or control, but on nearby public waters, and the railroad company was free from fault.' The plaintiff's demurrer to these defenses was sustained by L. Hand, J.

When the cause came on for trial before Judge Mayer, the defendant moved to dismiss on the ground that its liability was that of warehouseman, and not of carrier, which motion was denied, because overruled on demurrer by Judge Hand. Without going into the question whether the defendant waived this objection by answering over, we think it was bad in law. The goods were in course of transportation, and the delay at the Black Tom Terminal during the period that the plaintiff failed to give shipping instructions for export for either 48 hours after notice of arrival under the bill of lading or for 15 days under the tariff changed the defendant's liability to that of warehouseman, but as soon as shipping instructions were given, July 29, at 1:42 p.m., its liability as carrier to transport the goods to New York, county of New York, was reinstated. This is expressly stated by A-1 of the company's tariff. The only effect of article 8 of the tariff is to postpone the time at which demurrage begins to run. The other provisions of section 16, which give the railroad company a reasonable time within which to deliver alongside the steamer for export, in no way affect its liability as carrier or make it a warehouseman. There is nothing in the suggestion that lighterage to New York is a mere terminal service. The railroad company, having agreed to deliver at New York, would have been responsible as common carrier, if the goods had been lost or damaged while on the lighter. Judge Hand concluded his opinion on the demurrer to the complaint as follows:

'It does not, of course, follow that the defendant became a carrier at the moment of receiving the order at 1:42 p.m. For example, it might be that that was too late for delivery that evening. If so, the defendant's liability would not attach until such time as it could have commenced delivery under the conditions of the harbor. All such considerations cannot be decided upon the pleadings; they must wait for the evidence developed at the trial. It does not follow, therefore, that on Sunday, July 30th, the defendant was not still holding as a warehouseman, but it equally does not follow that it was.'

We go further, and hold that, had the case rested on the complaint and the denials of the answer, a verdict should have been directed for the...