Northern Pacific Railway Company v. American Trading Company

• Decision Date: 05 December 1904
• Docket Number: No. 24,24
• Parties: NORTHERN PACIFIC RAILWAY COMPANY, Appt. , v. AMERICAN TRADING COMPANY
• Court: U.S. Supreme Court

195 U.S. 439

25 S.Ct. 84

49 L.Ed. 269

NORTHERN PACIFIC RAILWAY COMPANY, Appt.,

v AMERICAN TRADING COMPANY.

No. 24.

Argued October 26, 27, 1904.

Decided December 5, 1904.

The Northern Pacific Railroad Company made a certain mortgage which was foreclosed, and the Northern Pacific Railway Company purchased the property of the former company under the mortgage at the foreclosure sale, and, by the order of the court, the purchaser was required to pay all boligations or liabilities contracted or incurred by the court's receivers, who had been appointed in the foreclosure suit. The American Trading Company, the appellee herein, intervened in that suit, and, by its petition, asked that, by virtue of the decree in foreclosure, the purchaser, the Northern Pacific Railway Company, be required to pay damages for the failure of the receivers to perform a special contract for the transportation of goods from Newark, New Jersey, to Yokohama, in Japan. The case was tried before the United States circuit court, in New York city, which dismissed the petition. This decision was reversed by the circuit court of appeals for the second circuit, and the railroad company was directed to pay the damages therein stated to the American Trading Company, the intervening petitioner. The railroad company has appealed from such decree or order to this court. The case was tried upon the agreed statement of facts which follows:

1. In September, 1894, Thomas F. Oakes, Henry C. Payne, and Henry C. Rouse were receivers of the Northern Pacific Railroad Company, under an order made in a suit bearing the same title as the present suit, in the United States circuit court for the eastern district of Wisconsin, to which this suit is ancillary. Under that order the receivers were authorized to continue, and were continuing, to carry on the business of the railroad in their charge.

2. The line of railroad in the possession of the receivers extended from Duluth, Minnesota, to Tacoma, Washington. The receivers had contracts with various carriers reaching points on their line, by which through bills of lading were issued from and to points not upon the line of the receivers' railroad, where the freight passed over some part of that line in transit. Among the carriers with whom the receivers had such arrangements was the Northern Pacific Steamship Company. This was an English company, operating a line of steamers between Tacoma and points in Japan and China, including Yokohama. The contract between the steamship company and the receivers was the contract originally made on March 30, 1892, between the Northern Pacific Railroad Company and the Northern Pacific Steamship Company, and ratified and adopted by the receivers, under the authority of an order of the circuit court of the United States, made on September 13, 1893.

The receivers held no stock in the steamship company, and had no other express contract relation with the steamship company. This stipulation is not to be accepted as an admission by the railroad company, or the receivers, or their counsel, that there were any relations between the receivers and the steamship company other than those growing out of the facts herein agreed upon.

For convenience in transacting their freight business in the eastern part of the United States, the receivers maintained an office in the city of New York, which was, in September, 1894, in charge of one George R. Fitch, who was their general eastern agent, and made arrangements for the transportation of freight over the receivers' line of railway and connections, including transportation to China and Japan.

At the time of the transactions referred to in this state- ment of facts, the said Fitch had not received, nor did he receive, any direct or independent appointment or authority from the Northern Pacific Steamship Company, to act as agent of that company. His only authority as agent of the steamship company was that created by, or arising from, the contract, exhibit A. Fitch knew that an arrangement had been concluded by the receivers and the steamship company, by which contracts for through shipment to Yokohama might be made by the agents of the receivers, and through bills of lading issued, and he had been instructed by the receivers to solicit freight for through transportation upon bills of lading, of which exhibit C, hereto annexed, is a copy; but Fitch did not know the terms of the contract between the steamship company and the receivers, and the trading company did not know what company operated the steamships between Tacoma and Yokohama, or that the steamship company was a separate and independent company or that there was any contract between the receivers and the steamship company.

It is further stipulated that Fitch had no express general authority to make contracts for through transportation, except as provided by the said bills of lading, and no authority to make the contract in question, unless such express authority be found in the telegrams, of which copies are hereinafter set forth; that the American Trading Company did not know the terms of his express authority, and that this stipulation is not to be taken as an admission by the railroad company, or the receivers, or their counsel, that his implied authority was greater than his express authority.

4. The American Trading Company is, and was in September, 1894, a corporation organized under the laws of the state of Connecticut, having its principal office in the city of New York, and carried on a general commercial business with Asiatic ports.

5. In September, 1894, the trading company applied to Fitch for a rate upon a proposed shipment of pig lead from New York to Yokohama, Japan, and informed him that it was of vital importance that the lead should be transported promptly, and go forward by the earliest possible steamer, without delay, in order to enable the trading company to fulfil a proposed agreement, which it was about to make for the sale of the lead in Japan, and which would require its delivery there at a fixed date. Fitch thereupon named a rate, and undertook to forward the lead from New York on or before September 29th, and via the Northern Pacific steamer Tacoma, sailing from Tacoma October 30, 1894.

6. Thereupon the trading company cabled to its agents at Yokohama, naming a price, and a date at which the lead could be delivered there; and thereupon its agents in Yokohama made a contract for the sale of the lead, which contract provided that it should be delivered in Yokohama by overland route, and the most direct connection at San Francisco, Tacoma, or Vancouver, and that, in case of unusual or extraordinary delay in transit, the contract should be null and void. Neither Fitch nor the receivers knew, until September 24th, that any contract for the sale of lead in Japan had been concluded by the trading company, and, except as hereinbefore and hereinafter stated, they never received any information in regard to its terms, as made or proposed. Upon the conclusion of its Japanese contract, the trading company purchased 200 tons of pig lead in bond, from the Balbeck Smelting & Refining Company.

7. On September 19, 1894, Fitch, in confirmation of his previous statement, wrote and sent to the trading company the following letter:

Northern Pacific Railroad Company.

Thomas F. Oakes, Henry C. Payne, Henry C. Rouse, Receivers.

Geo. R. Fitch, General Eastern Agent, 319 Broadway.

Traffic Department.

New York City, Sept. 19, 1894.

American Trading Co. 182 Front St., City.

Gentlemen:——

I hereby confirm rate quoted you this day and accepted by you on shipment of pig lead for export to Japan, as follows:

Pig lead, New York to Yokohama, Japan, $15.00 per ton of 2000 lbs., shipment not to consist of less than 400,000 lbs., and to be forwarded from New York on or before Sept. 29th, in accordance with shipping instructions given you by me, and to be forwarded from Tacoma, Wash., via Northern Pacific steamer sailing from thence October 30th. Kindly forward your acceptance of the above as early as possible. Thanking you for the favor, I remain,

Yours truly,

Geo. R. Fitch,

G. E. Agent.

The trading company wrote and sent in reply (accepting the proposition) the following letter:

Sept. 20th, 1894.

The Northern Pacific R. R. Co., New York City.

Dear Sirs:——

In reply to your esteemed favor, Sept. 19th, we beg to accept the rate quoted to us in your letter of Sept. 19th, namely, on 200 tons of pig lead, N. Y. to Yokomaha, Japan, $15,00 per ton of 2,000 lbs., shipment not to consist of less than 400,000 lbs., to be forwarded from N. Y. on or before September 29th, in accordance with shipping instructions to be given by you, and to be forwarded from Tacoma, Washington, via Northern Pacific Steamer sailing from that port Oct. 30th. Kindly let us know as soon as possible the shipping instructions, so that we can forward them to our supplier, and oblige, with best respects,

Very truly yours,

The American Trading Co.

(Signed) Frank P. Ball.

On September 22, 1894, Fitch wrote and sent to the trading company the following letter, giving shipping instructions:

Northern Pacific Railroad Company.

Thomas F. Oakes, Henry C. Payne, Henry C. Rouse, Receivers.

Geo. R. Fitch, General Eastern Agent, 319 Broadway.

Traffic Department.

New York City, Sept. 22, 1894.

American Trading Co., No. 182 Front St., City.

Dear Sir:——

I hereby confirm routing given you over the telephone yesterday on your shipment of pig lead for export to Yokohama, Japan, as follows: To be shipped from Newark, N. J., via Penn. R. R., marked Anchor Line rail and Lake, care Northern Pacific, care A. O. Canfield, agent N. P. R. R., Tacoma, Wash. Please advise me, as soon as possible, who the shippers will be, that I may order the cars, and also see that same are rushed through without delay to connect with our steamer at Tacoma.

Yours truly,

Geo. R. Fitch, G. E. Agent.

A. H. P.

8. Before naming a rate for...