Pere Marquette Ry Co v. French Co

• Decision Date: 17 January 1921
• Docket Number: No. 105,105
• Parties: PERE MARQUETTE RY. CO. v. J. F. FRENCH & CO
• Court: U.S. Supreme Court

254 U.S. 538

41 S.Ct. 195

65 L.Ed. 391

PERE MARQUETTE RY. CO.

v J. F. FRENCH & CO.

No. 105.

Argued Nov. 19, 1920.

Decided Jan. 17, 1921.

Messrs. Oscar E. Waer, of Grand Rapids, Mich., and John C. Shields, of Detroit, Mich., for petitioner.

Mr. Clare J. Hall, of Grand Rapids, Mich., for respondents.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The federal Uniform Bills of Lading Act of August 29, 1916, c. 415, 39 Stat. 538 (Comp. St. §§ 8604aaa-8604w), provides by section 9 that a carrier is, subject to the provisions of sections 10, 11 and 12,

'justified in delivering goods to one who is'

(c) 'A person in possession of an order bill for the goods, by the terms of which the goods are deliverable to his order; or which has been endorsed to him, or in blank by the consignee, or by the mediate or immediate indorsee of the consignee.'

The main questions presented for our decision in this case are whether, upon the facts hereinafter stated, there was a delivery to one in possession of the bill, and, if so, whether the delivery exonerated the carrier, it having been made without requiring surrender of the bill of lading.

In 1917 J. F. French & Co. shipped a carload of potatoes from Bailey, Mich., to Louisville, Ky., by the Pere Marquette Railroad as initial carrier and the Big Four Railroad as connecting and terminal carrier. The shipment was made on a 'consignor's order' bill of lading in the standard form by which the car was consigned to the shippers' order at Louisville; and there was a notation:

'Notify Marshall & Kelsey, % Capt. Bernard, Commissary, Camp Taylor.'

The shipper attached the bill of lading to a draft on Marshall & Kelsey for the purchase price of the potatoes and sold and delivered both, duly indorsed in blank, to a bank at Grand Rapids. This bank transmitted for collection the draft, with bill of lading attached, to an Indianapolis bank. The latter, without obtaining payment of the draft, detached the bill of lading from it and wrongfully delivered the bill of lading to Marshall & Kelsey. The car having reached Louisville, its destination named in the bill of lading, it was physically delivered by the Big Four, upon request of one Bindner, to the Southern Railroad, to be forwarded to Dumesnil, under the circumstances hereinafter set forth, without requiring surrender of the bill of lading. Later, upon the refusal of Marshall & Kelsey to accept the potatoes and honor the draft, possession of the car and bill of lading was returned to the shippers, who accepted them under protest and, without waiving any rights which they might have, proceeded to dispose of the potatoes elsewhere, in order to make the damage as light as possible for all concerned. The shippers then brought this suit in a state court of Michigan against the Pere Marquette to recover compensation, contending that the carrier had by delivering the car upon request, without requiring surrender of the bill of lading, become liable for conversion of the potatoes. The court directed a verdict for plaintiff, and the judgment entered thereon was affirmed by the Supreme Court of Michigan. 204 Mich. 578, 171 N. W. 491. The case comes here on writ of certiorari. 250 U. S. 637, 39 Sup. Ct. 494, 63 L. Ed. 1183.

The following additional facts are material: Camp Zachary Taylor was located about six miles from Louisville on the Southern Railroad, near Dumesnil station. Marshall & Kelsey had contracted with the government to supply a large quantity of potatoes at this camp; and had made a contract of purchase with J. F. French & Co. The car in question was shipped to Louisville to be applied on these contracts. The indorsed bill of lading for this, as for other cars shipped under like circumstances, had been left by Marshall & Kelsey at Dumesnil with one Bindner, an employee of the Southern Railroad, for safe-keeping. He, having the bill of lading in his possession at Dumesnil, telephoned from there, at Marshall & Kelsey's request, to the Big Four Railroad to ascertain whether the car had arrived at Louisville. Finding that it had, Bindner, knowing the government's need of potatoes, told the Big Four trackage clerk that 'he had the bill of lading and to let the car go out to the camp.' Bindner had no specific instructions from Marshall & Kelsey to do this: but his action was later ratified by them. Upon receiving Bindner's further assurance that a small demurrage charge which had accrued would be paid, the trackage clerk, without requiring surrender of the bill of lading, released the car, changed the waybill so as to provide for delivery of the car at Dumesnil, and turned it over to the Southern. A charge of 6 cents per hundred pounds thereby became payable to the Southern Railroad for the local carriage from Louisville to Dumesnil; and it was left by the waybill payable by the consignee with the other freight charges upon receipt of the car at Dumesnil. The Big Four had no information that the draft covering the car had not been paid or of the circumstances under which Bindner obtained possession of the bill of lading. The car arrived at Dumesnil, but the government did not accept it. Thereupon Bindner returned the bill of lading to Marshall & Kelsey upon their request; they returned it to the Indianapolis bank; this bank returned it and the draft to the Grand Rapids bank, which in turn surrendered both to J. F. French & Co., upon being repaid the sum originally credited to their account. The shippers then took possession of the car, disposed of the potatoes elsewhere, but at a lower price, and brought this suit to recover the amount of their loss. The evidence is in conflict concerning the reason for the failure of the government to accept the potatoes, their condition, and the cause of deterioration in them, if any; and no finding of fact was made by the Supreme Court of Michigan on this issue. But, in an action for conversion the matter could affect only the question of damages and not that of liability; and it is not material in the view which we take of the case.

There is no controversy over the amount of the loss. Nor is it denied that suit was properly brought against the Pere Marquette as initial carrier. The shipment was interstate. The shippers sue the inital carrier under section 20 of the Act to Regulate Commerce as amended (Comp. St. § 8604aa), contending that there was a conversion of the goods by a misdelivery of them at Dumesnil instead of a delivery at Louisville; or, if it be held that there was a delivery at Louisville, that it was an unjustifiable delivery in violation of the contract of carriage, since a clause in the bill of lading declared:

'The surrender of this original bill of lading properly indorsed shall be required before delivery of the property.'

The carrier defends on the ground that there was a delivery at Louisville which exonerated it under section 9 of the federal Uniform Bills of Lading Act. Is the carrier liable for misdelivery, because the car was sent from Louisville to Dumesnil upon Bindner's request without requiring surrender of the bill of lading?

First. The Supreme Court of Michigan held that the Big Four, in sending the car over the Southern to Dumesnil at the request of Bindner, made not a delivery but an irregular reconsignment. Whatever name be used in referring to the act of forwarding the car, the Big Four, when it surrendered possession of the car to the Southern at Bindner's request, terminated its relation as carrier; just as it would have done if, at his request, it had shunted the car onto a private industrial track or had given the control of it to a truckman on the team tracks. Having brought the goods to the destination named in the bill of lading the carrier's only duty under its contract was to make a delivery at that place; and it could make that delivery by turning the goods over to another carrier for further carriage. Compare Bracht v. San Antonio Ry. Co., 254 U. S. 489, 41 Sup. Ct. 150, 65 L. Ed. ——, decided by this court January 3, 1921; Seaboard Air-Line Railway v. Dixon, 140 Ga. 804, 79 S. E. 1118; Melbourne & Troy v. Louisville & Nashville Railroad Co., 88 Ala. 443, 6 South. 762. The fact that in forwarding the car the Big Four used the original waybill, striking out the word 'Louisville' under the 'destination' and substituting 'Dumesnil, Ky. So. R. R.,' is of no significance. The shipment from Louisville to Dumesnil was a wholly new transaction. In turning over the car for this new shipment the railway made a disposal of it in assumed termination and discharge of its obligations, which was, in legal contemplation, a delivery. Whether it was a justifiable delivery and did indeed discharge its obligations we must next consider.

Second. Was the delivery at Bindner's order one which the carrier was justified in making under the provisions of section 9 of the federal Uniform Bills of Lading Act? Prior to the enactment of the federal ...