The Missouri v. Hutchings

• Citation: 99 P. 230,78 Kan. 758
• Decision Date: 07 November 1908
• Docket Number: 15,431
• Court: United States State Supreme Court of Kansas
• Parties: THE MISSOURI, KANSAS & TEXAS RAILWAY COMPANY v. HUTCHINGS, SEALY & CO., a Partnership, etc

99 P. 230

78 Kan. 758

THE MISSOURI, KANSAS & TEXAS RAILWAY COMPANY v. HUTCHINGS, SEALY & CO., a Partnership, etc

No. 15,431

Supreme Court of Kansas

November 7, 1908

Decided July, 1908.

Error from Labette district court; THOMAS J. FLANNELLY, judge.

STATEMENT.

THIS action was commenced in the district court of Labette county on March 29, 1905, to recover moneys advanced on certain bills of lading issued by the defendant, the Missouri, Kansas & Texas Railway Company, to J. K. Davidson & Co. and assigned to the plaintiffs.

The defendant operates a line of railway extending from Kansas City, Mo., to Galveston, Tex. In June, 1900, the plaintiffs Hutchings, Sealy & Co., were engaged in the grain business in Galveston, Tex., and one J. K. Davidson, doing business as J. K. Davidson & Co., was engaged in the grain business in Kansas City, Mo. The manner in which the business was carried on among the plaintiffs, J. K. Davidson & Co., and the defendant was alleged to be as follows The defendant would issue to J. K. Davidson & Co. at Kansas City a bill of lading for each car of bulk wheat. Davidson & Co. would assign this bill of lading to the plaintiffs and draw a sight draft upon them, depositing the same in a bank at Kansas City. Upon presentation to the plaintiffs at Galveston they would honor the draft upon the faith and strength of the bill of lading attached. Ordinarily the time occupied in transit of a car of grain between Kansas City and Galveston was about two weeks. The method of doing the business was well known to the defendant, and was adopted by the parties for the purpose of enabling Davidson & Co. to purchase other grain for shipment over defendant's railway, and thus increase the volume of business and benefit all the parties.

It was alleged in the petition that on or about June 13, 1900 defendant issued twenty-seven bills of lading of this kind to J. K. Davidson & Co., each reciting that a car-load of bulk wheat containing a certain number of pounds was loaded in a car of the defendant, stating the number of the car, and was to be transported from Kansas City to Galveston and delivered to the order of Davidson & Co.; that across the face of each bill of lading there were written the letters "S. O.," meaning that the bill of lading was consigned to shipper's order, and therefore negotiable; that such meaning was well known to all persons and railway companies engaged in the shipment of grain. It was further alleged that the several bills of lading were issued at Kansas City and signed by F. A. Leland, who at the time was the assistant general freight agent of the defendant company, that he signed the same as such agent, being the duly authorized agent of the defendant in that behalf, and that the plaintiffs were not informed and could not state the name of the person or persons who delivered the several bills of lading to J. K. Davidson & Co. There were also allegations that these bills of lading were all indorsed by J. K. Davidson & Co., and that the plaintiffs, upon the faith and strength of the recitals therein contained, advanced certain sums of money; that in truth and in fact the recitals contained in the several bills of lading were false, no bulk wheat having been received or loaded in any cars of the defendant, and no such cars having been received by the plaintiffs from J. K. Davidson & Co. nor transported or delivered to the plaintiffs by defendant. The amount of money advanced by the plaintiffs was set forth and it was alleged that of this sum there had been collected from J. K. Davidson & Co. certain amounts, leaving a balance due of $ 4815.95.

The petition then recited that the plaintiffs, on June 30, 1900, commenced an action in the circuit court of Jackson county, Missouri, a court of competent jurisdiction, against the defendant railway company, the general object and nature of which was to recover from defendant the damages sued for in this action; that from time to time, by the agreement of the parties thereto, that action was continued for the purpose of enabling the plaintiffs to recover whatever might be possible from Davidson & Co.; and that the action was afterward dismissed without prejudice to a new action. Attached to the petition as exhibits were copies of the various bills of lading, together with a copy of the petition in the action brought in Missouri, and copies of two written stipulations for the continuance of that action.

A general demurrer to the petition was overruled, to which defendant excepted. An answer was then filed setting up a number of defenses. The plaintiffs demurred to the ninth and tenth defenses of the answer, which the court sustained. The defendant excepted, and brings the cause here for review upon the rulings of the court upon the demurrers.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. PETITION--Construction--Action ex Contractu or ex Delicto. Where a petition contains a good cause of action for a breach of contract the addition of words or averments which are appropriate to a cause of action for a wrong will not change the action from contract to tort. And in case of doubt the courts are inclined against construing the pleading as embodying a cause of action for a tort.

2. CARRIERS--Bills of Lading--Possession of the Property--Innocent Purchaser. Whether the agents of a common carrier have authority to bind the carrier by the issue of bills of lading when the property is not in the possession of the carrier is a question upon which two antagonistic doctrines prevail: (a) One holds that it is not within the scope of the authority of an agent of a common carrier to issue a bill of lading without the actual receipt of the goods, and that the bill of lading so issued conveys no rights to an innocent holder thereof. This rule obtains in the federal courts, and in many of the state courts. (b) The second holds the carrier liable because the knowledge whether the goods have been received, and therefore the power in fact conferred, lies peculiarly with the carrier's agent, who is held out to the public as having authority to make a statement upon which innocent parties may rely, and the carrier is therefore estopped to deny the receipt of the goods as stated in the bill. This doctrine, resting upon the principle of estoppel in pais, is the law in Kansas, as declared in Savings Bank v. A. T. & Santa Fe Rld. Co., 20 Kan. 519.

3. CONTRACTS--Bills of Lading--Proper Law of the Contract. In an action against a common carrier based upon bills of lading, involving no question with respect to the right of the carrier to limit its common-law liability, the rights and obligations of the parties are to be determined by the law of the place where the contract was made.

4. CONTRACTS--Action to Recover Money Advanced on Bill of Lading Issued without Possession of Property--Defense. In an action against a common carrier to recover moneys advanced on the faith of bills of lading issued by the agents of the carrier without the actual receipt of the property an answer which alleges that the bills were executed and delivered in the state of Missouri, that when they were issued the statutes of that state made it unlawful for a common carrier to issue bills of lading without the actual receipt of the property, and that the supreme court of Missouri has held and still holds, in construing the statute, that all such bills of lading are absolutely void and that no action can be maintained thereon by any holder or assignee, states a good defense as against a demurrer.

5. EVIDENCE--Judicial Notice--Law of Another State. The courts of this state can not take judicial notice of the laws of another state, except for the purpose of aiding them in ascertaining and interpreting the laws of this state on a particular subject; and the situation is not changed nor the rule altered by the fact that a pleader who relies upon the law of another state has referred to a particular decision of the supreme court of that state, citing the volume and page of the reports where the decision may be found.

John Madden, and W. W. Brown, for plaintiff in error.

F. M. Harris, for defendants in error.

PORTER, J. BENSON, J., not sitting, having been counsel in the court below.

OPINION

PORTER, J.:

The first question raised by the defendant to the petition--that by virtue of chapter 325 of the Laws of 1905 the action can not be maintained by the plaintiffs because they are non-residents of the state--is easily answered. Without attempting to pass upon any of the provisions of the act it is sufficient to say that it has no application, for the reason that this action was brought on the 29th day of March, 1905, and the act in question did not take effect until June 8, 1905.

It is contended that the demurrer to the petition should have been sustained because it appears upon its face that the action was barred by the statute of limitations, the petition averring that the plaintiffs first discovered in the month of June, 1900, that the statements contained in the bills of lading were false, and the action, therefore, should have been brought within two years. It is also contended that the petition shows an election of a different and inconsistent remedy by the commencement of the action in Missouri. These contentions both rest wholly upon the claim that the action is in tort and not on contract. If it is not an action based upon fraud the two-year statute of limitations has no application; if it is on contract the five-year statute controls, and as the action was commenced within that time it was not barred. Likewise, if it is an action on the contract the question of election of inconsistent remedies is not involved, because it is conceded that the action referred to in the petition as...