Colgate v. Pennsylvania Co. — 1 N.Y. St. Rep. 166

Majority

p. 166

Colgate v. Pennsylvania Co.^[1]

(Court of Appeals,

Filed, April 13, 1886.)

Headnote

Common carrier—Liability of, if he delivers goods without production of bill of lading.

The statute (Laws 1858, chap. 326, and 1859, chap. 353) forbids a delivery by a common carrier except upon the production and cancellation of the bills of lading, and interpolates into every such instrument that imperative condition, and makes such condition an element of the contract.

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as perfectly as if therein written; and the common carrier is liable as for a conversion for delivering such goods to the consignee after the latter has transferred the bills of lading to third parties, even though it has recei ed no notice of such transfer, unless it stamps them, “not negotiable.”

Appeal from order general term supreme court, first department, modifying and affirming judgment for plaintiff.

William C. Gulliver, for appellant.

William G. Wilson, for respondent.

Whether, before the statute (2 Eev. St. [6th ed.,] 23Ú), the difference in bills of lading between unose drawn “to order” and those “billed straight” to the consignee alone, created a difference in the duty and right of the carrier in respect to delivery, we do not think it important to consider, since we agree with the courts below as to the decisive effect of the statute upon the facts in controversy.

The defendant transported the oil under bills of lading which constituted the contract between shipper and carrier, and served also as evidences of title, the transfer of which would transfer the property. That result would follow even though no words of negotiability were contained in the instrument, and its transfer with an intention to pass the title would give the holder an ownership of the property. By that process the plaintiffs became the owners of the oil, and, on showing that fact by producing the bills of lading which were indorsed over to them by the consignee, they had a right to call upon the carrier for the property. The latter defends by showing a delivery to the consignee in ignorance of the plaintiff’s right, but without the production and cancellation of the bills of lading. Such delivery was in accordance with the written words of the contract, but. not according to its terms as modified by the express command of the statute. That forbids a delivery except upon the production and cancellation of the bills of lading, and interpolates into every such instrument that imperative condition, and makes such condition an element of the contract ■ as perfectly as if therein written. It gave to the bills of lading under which the oil was carried this construction: that the carrier should deliver to the consignee provided he produced and canceled the bills of lading.

The primary object of the statute was to insure delivery fco the party actually entitled, and close the door upon opportunities for fraud resulting from delivery in ignorance of the true ownership. The carrier delivered to the consignee in disregard of the statutory prohibition; and that cannot be a good delivery which the law expressly forbids. Obedience •

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to the statute would have prevented the injury which happened. The consignee had parted with the bills of lading and his consequent right to the property, and the delivery to him was to one not the owner, and having no right to receive it. There is no hardship in the rule. If the carrier •does not desire to obey its requirements, he may stamp his bills of lading with the words “not negotiable.” In that shape they warn the purchaser that the carrier will deliver to the consignee, and not be bound by a transfer of the bills. But if he issues them without that warning, he is bound to know that they may have passed into other hands, and become the property of others than the consignee, and that his duty and his contract is to deliver to him who produces . and cancels the evidence of title.

The appellant argues that the act does not forbid delivery to the consignee where that delivery is stipulated; but aims •only to protect against “spent bills,” or such as exist after -delivery, and susceptible of a wrongful or fraudulent use. Doubtless the last was one of the evils sought to be prevented, but that purpose could only be effectually accomplished by forbidding a delivery except accompanied by a cancellation of the bill. By no other mode could the existence of “spent bills” in a form capable of deception be prevented; for, if the carrier could deliver to the consignee without cancellation, the bill of lading would be left outstanding as a possible basis of fraud. The statute, therefore, does prohibit the delivery except on the prescribed condition; . and, as the learned referee points out, a subsequent section makes that construction inevitable. Section 8. The prevention of mischief from “spent bills” was, however, not the sole evil to be remedied, nor the only object sought to be accomplished. The business convenience Of a safe and easy transfer of bills of lading, and the danger of leaving the title they represent at the mercy of the consignee, unless notice be given to the possibly unknown final carrier, and the importance of making the title they give secure for the purposes specified, were, all subjects within the purview of the enactment, and the statute is too wise in its provisions, and too beneficent in its aim, to be narrowed or weakened by any needless criticism.

The custom provedwas immaterial. It could not repeal the statute, or serve as a shield for its violation.

The argument that, under the contract between plaintiffs and the consignee, the transfer of the bills of lading was not intended to vest title to the oil in them has no support in the facts. The findings are to the .contrary, and fully supported by the evidence.

The contention that this action for the conversion is not maintainable because the statute gives an action for dama

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ges to the party injured by a violation of its provisions, and such action only is contemplated, has no merit. A delivery to the wrong person, to one not entitled to the possession, is a conversion. Viner v. New York S. S. Co., 50 N. Y., 24 . And this is so even if the act is done by mistake, and without a bad intent. The section of the statute referred to •does not proceed upon the theory that no action could be maintained except by its express authority. Section 7. It provides, first, for a punishment criminally by an indictment for a misdemeanor; and then, lest that should be deemed the only consequence of a violation, it adds that the injured party may maintain “an action at law for all damages, immediate or consequential,” which have resulted, whether the wrong-doer “shall have been convicted as hereinbefore mentioned or not.” The form or character of the action is not dictated. Any one appropriate to the injury is contemplated.

The judgment should be affirmed, with costs.

All concur, except Rapadlo, J., absent.