Portland Flouring Mills Co. v. British & Foreign Marine Ins. Co.

• Decision Date: 31 May 1904
• Docket Number: 998.
• Citation: 130 F. 860
• Parties: PORTLAND FLOURING MILLS CO. v. BRITISH & FOREIGN MARINE INS. CO., Limited.
• Court: U.S. Court of Appeals — Ninth Circuit

130 F. 860

PORTLAND FLOURING MILLS CO. v. BRITISH & FOREIGN MARINE INS. CO., Limited.

No. 998.

United States Court of Appeals, Ninth Circuit.

May 31, 1904

Appellant is engaged in the manufacture, and sale of flour, having its principal office at Portland, Or., and a branch office at Hong Kong, China. It appears that the flour shipped to Hong Kong by appellant is handled by a Chinese syndicate; that the sales made are confined to the company's agent at Hong Kong, through whom the orders are made; that the members of the syndicate receive the flour in certain definite proportions, designated by shares-- one firm having three shares, another two, and the third one; that on August 29 1901, appellant received from its Hong Kong agent a cable confirmation of a contract for an amount of flour to be intended for the members of the syndicate, with a request that the order be confirmed, which was done, according to the shares of each. In December 1901, appellant shipped with the Portland & Asiatic Steamship Company, for carriage on the Knight Companion, a British vessel operated by said company a large quantity of flour. One lot, intended for Cornes &amp Co., was billed to Kobe, Japan, and the others, intended for different purchasers, were billed to Hong Kong, China. The goods in each case were shipped under a bill of lading issued by the carrier, wherein it was stipulated that the flour shipped was to be delivered 'at the vessel's tackle unto the Portland Flouring Mills Company, or to his or their assigns. Freight on same as per margin to be collected in U.S. gold coin or its equivalent, The several freight and primages to be considered as earned, steamer or goods lost or not lost at any stage of the entire transit. ' On the margin of the bills of lading were the letters 'N'fy' or 'Notify,' followed by the name of the firm on whose account the shipment is alleged to have been made. These bills of lading were in each case accepted by appellant, who was therein named both as consignor and consignee. Policies of insurance in the name of appellant were taken out at the invoice price and 40 per cent, of the syndicate in the proportion of their shares for the selling price of the flour plus cost of insurance. These policies one for each member of the syndicate, although in the name of appellant, and the several bills of lading, were indorsed in blank, so that they were available to the holder. The drafts with the policies and bills of lading, so indorsed, were delivered to Ladd & Tilton, bankers of appellant, and the amount placed to the latter's credit.

The steamship Knight Companion left Portland, Or., on the 31st day of December, 1901, and reached the coast of Japan, and was there stranded on the 2d day of February, 1902, and abandoned as a total loss by the steamship company and the several insurance companies interested. One of these insurance companies was the appellee, which had insured the steamship company for the freight to be earned by the voyage. Appellee settled with the steamship company, paying its claim in full, and the other insurance companies settled with the holders of their policies, and the insurance companies thereupon divided among themselves certain moneys secured from the salvage of the cargo; the insurers of appellant's shipment receiving 45,205 yen, approximately $22,500. Appellant's insurers paid the face of their policies, which exceeded the selling price of appellant's goods. On the payment of the steamship company's claims in full for freight, appellee became subrogated to the steamship company's rights, and in addition thereto took from the steamship company an assignment of its claim for the freight, and brought this libel in personam for the recovery of the same. The court rendered a decree in favor of appellee (124 F. 855), and from that decree the appeal herein is taken.

C. E. S. Wood, S. B. Linthicum, J. C. Flanders, and Williams, Wood & Linthicum, for appellant.

Page, McCutchen & Knight and Snow & McCamant, for appellee.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY District Judge, after making the foregoing statement, .

The contention of appellant is that the bills of lading and the practice between the parties in their previous business relations of a similar character show that the steamship company had always collected from the purchasers of the flour, that the bills of lading constitute a consignment to order, that the person or firm who is to receive the freight at its destination is indicated by the person who is named to be notified, and that the understanding and intention of the parties were, at the time the bill was given, that the freight should be collected from the person receiving the goods. Appellant's counsel in their brief say:

'Our contention is that it was well known by the Portland & Asiatic Steamship Company in this particular case, and by some years of customary traffic between the parties, that the flour was sold to the consignees f.o.b. at Portland, and in making delivery to the steamer and receiving the bill of lading the shipper, so far as all carriage of the goods was concerned, was acting only as the agent and representative of the purchaser's consignees.'

The contention of the appellee is that the bills of lading upon their face clearly show that appellant was the owner and consignee, as well as the consignor, of the flour, and that these facts necessarily make it responsible for the freight. We are of opinion that, whatever the customs usages, and understanding between the parties may have been in their previous transactions, where the goods were delivered and the payment of the freight thereon made by the parties who received the goods, it cannot have any controlling effect in the present case, where the goods were not delivered. The testimony as to the usages and customs in the shipping of the flour was all received subject to the objections urged by appellee as to its sufficiency and relevancy, in this: that each bill of lading constituted a contract between the parties, and could not be impeached or contradicted by parol evidence. The general rule upon this subject is well stated by Story, J., in The Reeside, 2 Sumn. 567, Fed.Cas. 11,657 (where numerous authorities upon the point are cited), as follows:

'The true and appropriate office of a usage or custom is to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of their contracts, arising, not from express stipulations, but from mere implications and presumptions, and acts of a doubtful or equivocal character. It may also be admitted to ascertain the true meaning of a particular word or of particular words, in a given instrument, when the word or words have various senses, some common, some qualified, and some technical, according to the subject matter to which they are applied. But I apprehend that it can never be proper to resort to any usage or custom to control or vary the positive stipulations in a written contract, and, a fortiori, not in order to contradict them. An express contract of the parties is always admissible to supersede, or vary, or control a usage or custom; for the latter may always be waived at the will of the parties. But a written and express contract cannot be controlled, or varied, or contradicted by a usage or custom; for that would not only be to admit parol evidence to control, vary, or contradict written contracts, but it would be to allow mere presumptions and implications, properly arising in the absence of any positive expressions of intention, to control, vary, or contradict the

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