New York, N.H. & H. R. Co. v. California Fruit Growers Exchange

• Citation: 5 A.2d 353,125 Conn. 241
• Parties: NEW YORK, N.H. & H. R. CO. v. CALIFORNIA FRUIT GROWERS EXCHANGE.
• Decision Date: 08 March 1939
• Court: Supreme Court of Connecticut

5 A.2d 353

125 Conn. 241

NEW YORK, N.H. & H. R. CO. v. CALIFORNIA FRUIT GROWERS EXCHANGE.

Supreme Court of Errors of Connecticut.

March 8, 1939

Appeal from Court of Common Pleas, New Haven County; Walter M Pickett, Judge.

Action by the New York, New Haven & Hartford Railroad Company against the California Fruit Growers Exchange to recover freight and refrigeration charges on a carload of oranges shipped by defendant, which filed a plea of recoupment. From a judgment for plaintiff after presentation of the issues to the court on an agreed statement of facts, defendant appeals.

No error.

James W. Carpenter, of Hartford, Preston C. King Jr., of Washington, D.C., and Richard F. Berry, of Hartford for appellant.

William L. Barnett, of New Haven, and Milton W. Goss, of Waterbury, for appellee.

Argued before MALTBIE, C.J., and HINMAN, AVERY, BROWN, and JENNINGS, JJ.

HINMAN, Judge.

This action is for the recovery of freight and refrigerations charges upon a carload of oranges delivered by the defendant as shipper and consignor to the Atchison, Topeka & Santa Fe Railway Company in California, consigned by the defendant to itself and it district manager and agent at Providence, Rhode Island, and transported by that railroad and intermediate carriers and by the plaintiff as terminal carrier. The shipment was made under a uniform straight bill of lading in form prescribed by the interstate commerce commission. Shortly after the arrival of the car at Providence the defendant, by its district manager, directed the plaintiff by a written order, to deliver the shipment to Shore Brothers, Inc., ‘ on payment of freight and all other charges.’ The plaintiff delivered the shipment to the corporation and allowed it to unload and take delivery without first collecting the freight and refrigeration charges, Shore Brothers then having with the plaintiff a credit arrangement, pursuant to a rule of the interstate commerce commission (Ex Parte Order No. 73) which provides that where retention of freight by the carrier until freight charges have been paid will retard prompt delivery or release of equipment or station facilities, the carrier, upon taking precautions deemed by it to be sufficient to insure payment within the period of credit (96 hours) specified in the rule, may relinquish possession and extend credit for the charges. However, the plaintiff was unable to collect any part of the charges because Shore Brothers discontinued business without discoverable assets.

The bill of lading issued by the plaintiff and signed by the defendant as consignor and shipper provided that every service performed should be subject to the conditions therein, whether printed or written, including the conditions on the back thereof, to which the shipper agreed and accepted for itself and assigns. It contained among the contract terms and conditions a provision, Section 7: ‘ The owner or consignee shall pay the freight and average, if any, and all other lawful charges accruing on said property; but, except in those instances where it may lawfully be authorized to do so, no carrier by railroad shall deliver or relinquish possession at destination of the property covered by this bill of lading until all tariff rates and charges thereon have been paid. The consignor shall be liable for the freight and all other lawful charges, except that if the consignor stipulates, by signature, in the space provided for that purpose on the face of this bill of lading that the carrier shall not make delivery without requiring payment of such charges and the carrier, contrary to such stipulation, shall make delivery without requiring such payment, the consignor shall not be liable for such charges. Nothing herein shall limit the right of the carrier to require at time of shipment the prepayment or guarantee of the charges.’ On the face of the bill was printed: ‘ If this shipment is to be delivered to the consignee without recourse on the consignor, the consignor shall sign the following statement: The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges. (See Section 7 of conditions),’ but this was not signed by the defendant.

Upon the facts found, including the foregoing, conclusions were reached that under the shipping contract the defendant, as consignor, consignee and owner, is liable for the payment of the freight and other charges; in failing to sign the nonrecourse clause defendant, as consignee, remained liable; and that the delivery without first collecting the freight and other charges did not relieve the defendant of its obligation to pay the same. The appeal attacks these and the other conclusions reached and the failure to conclude, instead, as requested by the defendant in its draft-finding and according to its claims of law.

The rights and liabilities of the parties are governed by the federal laws relating to interstate commerce and the terms of the bill of lading, as interpreted by the federal tribunals. Alderman Brothers Co. v. New York, N.H. & H. R. Co., 102 Conn. 461, 464, 129 A. 47.

The leading case upon the subject of liability of the parties to a shipment for freight charges is New York Central R. Co. v. Warren Ross Lumber Co., 1922, 234 N.Y. 261, 137 N.E. 324, 24 A.L.R. 1160. In that case a car of lumber was shipped by S. L. Eastman Company from Michigan, consigned to the defendant at Boston, Massachusetts. Before the car arrived at Boston the defendant instructed the railroad company to deliver it to the Schieck-Johnson Company of that city ‘ upon payment of freight charges.’ The carrier delivered the shipment, but without collecting the charges. The Schieck-Johnson Company became bankrupt and the carrier brought suit against the defendant for the unpaid charges. Judge Pound, speaking for the court (234 N.Y. page 264, 137 N.E. page 324, 24 A.L.R. 1160), said: ‘ The standard bill of lading provides that the owner or consignee shall pay the freight. Defendant contends that it was the duty of the plaintiff to collect the freight from the Schieck-Johnson Company pursuant to instructions * * * and that delivery without such collection released defendant from any liability therefor. Such contention we cannot sustain. The consignor is ordinarily liable for freight charges. He requires the carrier to perform the service when he delivers the goods for transportation and thereby obligates himself to pay therefor. The usual stipulation in the bill of lading that the consignee shall pay the freight imposes no obligation on the carrier to insist on payment of freight before delivery to the consignee. It is not a part of the contract between consignor and carrier that the latter shall collect its bill of the consignee. The carrier may neglect to collect of the consignee and collect of the consignor. * * * But the consignee may also become liable for such charges by its own act. While no contractual relation arises between carrier and consignee by the mere designation of the latter as consignee, the consignee becomes liable for the freight charges when an obligation arises on his part from presumptive ownership, acceptance of the goods, and services rendered and the benefits conferred by the plaintiff for such charges. As to plaintiff, defendant stood in the relation of owner of the carload of lumber. The bill of lading designated it as consignee. That fact is in itself evidence of ownership. * * * When it wrote the letter directing the delivery * * * it accepted the goods by an act of ownership when it exercised dominion over them by giving directions for their delivery and the plaintiff was justified in treating it as owner of the goods. Pennsylvania R. Co. v. Titus, 216 N.Y. 17, 109 N.E. 857, L.R.A.1916E, 1127, Ann.Cas.1917C, 862. It thereby entered into the contract expressed in the bill of lading to pay the charges and became liable to pay such charges unless the words ‘ deliver * * * upon payment of freight charges' discharged its liability when the carrier neglected to collect on delivery to the Schieck-Johnson Company. The liability of the consignee under these conditions is analogous to the liability of the consignor under the terms of the bill of lading that the consignee shall pay the freight. Such a direction does not exonerate the consignor from liability. The directions given by defendant neither modified the implied contract between carrier and consignee whereby the consignee assumed liability for freight charges, nor amounted to an offer to accept the goods only on condition that freight charges should be collected of the Schieck-Johnson Company. Doubtless plaintiff might have refused to deliver to the Schieck-Johnson Company and retained the goods until its lien was satisfied by payment of the freight. Doubtless defendant by its instructions recognized such right when it qualified its directions as to delivery. But the directions were for the benefit of the carrier, not for the benefit of the defendant. The carrier was not bound at its peril to enforce payment of freight from the Schieck-Johnson Company, and its right to resort to the defendant under the contract was not impaired by delivery of the freight under its direction. The language used in defendant's letter was not contractual. Its effect was merely to give plaintiff an option to demand payment from the person to whom it delivered the goods.’

New York Central R. Co. v. Federal Sugar Refining Co., 1923, 235 N.Y. 182, 139 N.E. 234, 26 A.L.R. 1312, involved facts similar in substance to those in the Ross Lumber Co. case, except that the bills of lading involved were order or notify bills, whereas that in the Ross Lumber Co. case was a straight bill. The court held (235 N.Y. page 186, 139 N.E. page 235, 26 A.L.R. 1312) that it...