Louisville & N.R. Co. v. Cullman Warehouse, Inc.

• Decision Date: 09 March 1933
• Docket Number: 6 Div. 165.
• Citation: 226 Ala. 493,147 So. 421
• Parties: LOUISVILLE & N. R. CO. v. CULLMAN WAREHOUSE, Inc.
• Court: Alabama Supreme Court

147 So. 421

226 Ala. 493

LOUISVILLE & N. R. CO. v. CULLMAN WAREHOUSE, Inc.

6 Div. 165.

Supreme Court of Alabama

March 9, 1933

Rehearing Denied April 20, 1933.

Appeal from Circuit Court, Cullman County; W. W. Callahan, Judge.

Action for breach of contract by the Louisville & Nashville Railroad Company against the Cullman Warehouse, Inc. From a judgment of nonsuit, plaintiff appeals.

Affirmed.

Eyster & Eyster, of Decatur, St. John & St. John and Griffith &amp Griffith, all of Cullman, and Steiner, Crum & Weil, of Montgomery, for appellant.

Earney Bland, of Cullman, and A. J. Harris, of Decatur, for appellee.

GARDNER Justice.

This litigation arose out of a written contract entered into between the Louisville & Nashville Railroad Company and the Cullman Warehouse, Inc., presumably for their mutual benefit and convenience-the salient features of which appear in the report of the case.

Under this contract the advantage to the warehouse company was the granted privilege of loading on the cars at its own plant and sealed with its own seal, freight destined for shipment over the Louisville & Nashville Railroad, and the issuance by the railroad of bills of lading on the faith of the representations of the warehouse company as to the goods, wares, and merchandise so loaded.

The second paragraph of the contract contains the indemnity clause upon which the plaintiff here relies, and was, as contended by counsel for plaintiff, intended not only as an indemnity against actual loss, but against liability as well. 14 R. C. L. 56; Faulkner v. McHenry, 235 Pa. 298, 83 A. 827, Ann. Cas. 1913D, 1152-1154. But, even applying the rule that all fair doubts are to be resolved in favor of the party indemnified (Alabama Fidelity & Casualty Co. v. Ala. Penny Savings Bank, 200 Ala. 337, 76 So. 103; Eureka Coal Co. v. L. & N. R. R. Co., 219 Ala. 287, 122 So. 169), the indemnity here clearly intended was not against a mere claim or demand but only against an accrued liability, or, to use the wording of the parties, against such demands "accruing against the railroad company." In the interstate shipment of which complaint is here made, there was a claimed shortage of 40 bales of cotton, the railroad having, on the representation of the warehouse company, issued its bill of lading for 197 bales and made delivery to the consignee of only 157.

It is manifest, therefore, that, to fix liability against the warehouse company in the instant case, the railroad must show some accrued liability, as distinguished from a mere claim or demand against it on account of such shortage, and, if the railroad has paid the claim of the consignee, when in fact no legal liability existed, this would in no manner affect the liability of the warehouse company under the contract. And, indeed, we infer from the brief of plaintiff's counsel that this construction of the contract is in harmony with their own, as the brief states, "the purpose and intention of the parties in the contract was to make the warehouse company liable to the railroad company to the same extent as the railroad was liable to shippers." The question of prime importance, therefore, is whether or not the complaint discloses a liability of the railroad accruing to the Cotton Stabilization Corporation, the consignee named in the bill of lading.

It does not appear from the complaint whether or not the 40 bales of cotton were in fact loaded on the cars. If so loaded and lost in transit, the liability resting upon the railroad therefor would of course be wholly aside from the contract here considered, and the warehouse company would have no concern therewith. The right or privilege of the warehouse company to load the cars and procure the bills of lading was for its own convenience and advantage, and it is upon the bill of lading thus secured by the warehouse company that the consignee receives the freight so shipped. It would appear, therefore, that in thus loading the cars the warehouse company was acting on behalf of the shipper and as the shipper's agent.

Plaintiff's counsel cited Arthur v. Texas & P. R. Co., 204 U.S. 505, 27 S.Ct. 338, 51 L.Ed. 594, and Southern Railway v. Jones, 167 Ala. 578, 52 So. 899, in support of the statement that the warehouse company was the agent of the railroad. We are persuaded, however, the facts and circumstances considered in these authorities readily distinguish them from the instant case, and they are without application here.

But these considerations aside, the controlling factor in the determination of the question here presented is that the Cotton Stabilization Corporation was both the consignee and consignor. A bill of lading is of a twofold character, a receipt and a contract to carry and deliver. As a receipt it is open to contradiction. Wayland's Adm'r v. Mosely, 5 Ala. 431, 39 Am. Dec. 335. But a bill of lading may contain the constituent elements of an estoppel, and thus become something more than a contract between the carrier and shipper, as illustrated by the following extract from the text of 10 Corpus Juris, 195: "It usually is intended to constitute a representative of the goods, and stands for them, so that a transfer of the bill is a transfer of the goods themselves; and therefore when the carrier issues a bill of lading containing a statement as to the quantity of goods received, with the understanding that the goods may be transferred by means of a transfer of the bill of lading, the transferee is justified in relying on the representations of the carrier made in the bill with reference to the quantity of goods received under it, and as to one who receives the bill in good faith, relying on the statement of quantity, and pays a consideration, the carrier is estopped from showing that it has not received the quantity of goods recited in the bill. But the right of the consignee or transferee to rely on the recitals of the bill of lading in this respect depends on his having paid consideration by reason of recitals in the bill itself. Nor does the estoppel apply to a case where the owner of the property did not purchase it while it was in the hands of the carrier, and therefore did not take title to it through the bill of lading, but the shipment was made by its agent, or where the bill of lading which was for a car shipment of cotton seed showed on its face that the bags were loaded and counted only by the consignor."

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