Swift v. Pacific Mail Steamship Co. & Panama Railroad — 8 N.Y. St. Rep. 602

Majority

p. 602

William C. W. Swift et al., Res’pts, v. Pacific Mail Steamship Company and Panama Railroad Company, Appl’ts.^[1]

(Court of Appeals,

Filed June 7, 1887.)

Headnote

1. Common carriers—Necessary parties in action against—Seamen INTERESTED IN CARGO IN OIL.

Where plaintiffs who were both consignors and consignees of a large amount of oil made a contract in their own names for its carriage from Panama to New York, they can maintain an action for its loss in their own name, although the seamen of the vessels “were interested in the oil" under the common arrangement between the owners of whaling vessels and their seamen.

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2. Same—Right of cabbiebs to go beyond terminus fob freight and passengers.

The right to go beyond its terminus to procure passengers and freight for transportion over its route by a corporate carrier must be exercised within reasonable limits, and under such circumstances may fairly be said to be incident to its legitimate business, therefore: Held, that the Pacific Mail Steamship Company, engaged in transportation upon both the Pacific and Atlantic oceans, did not go beyond reasonable limits in contracting to take freight at Panama and transport it over the Panama railroad for delivery to its steamships at Aspinwall, its main business being to take freight coming to it over that railroad.

3. Same—Separate cabbiebs jointly liable—Principal and agent.

The jury found that plaintiffs made their contract at New York by correspondence with one Bellows, the vice-president and general agent of both defendants. Plaintiffs were to deliver the oil at Panama, the principals of Bellows were to receive the oil from plaintiffs’ vessels, take it upon lighters to the docks, carry it to Aspinwall without delay, care for it on the isthmus, see to the coopering so that there would be no leakage, and transport it from Aspinwall to New York; all for a single price. Held, that in spite of separate bills of lading having been rendered, showing that they were not jointly liable, the jury were justified in finding that plaintiffs made a single contract for the entire route, also, that if they were not jointly liable they were severally liable.

This action was brought by the plaintiff’s as shippers' against the defendants, as common carriers, to recover damages for breach of a joint contract for the carriage of of whale oil from Panama to New York. The complaint alleged that the plaintiffs were copartners, and that the defendants were corporations organized under the laws of this state; that the business of the Panama Railroad Company, among other things, was the transportation of freight from Panama by rail to Aspinwall, and there to deliver the same to the Pacific Mail Steamship Company, whose business it was, among other things, to transport the freight so received by vessel to New York; that the defendants, for a single price named, entered into a joint contract to carry the oil from Panama to New York; that they entered upon the performance .of their contract in the months of January and February, 1873, and delivered a portion of the oil received by them from the plaintiffs, in the city of New ■York, about the 23d of April, 1873; that owing to the negligence, delay, and improper handling of the oil, and the .casks containing the same, by the defendants, the oil was greatly damaged and injured, and a large part of it was lost by leakage while at Panama, on its way across the isthmus, at Aspinwall, and also on the passage from Aspinwall to New York; and that by reason of negligence, improper conduct, and mismanagement of the defendants, the plaintiffs suffered damages in the sum of #20,000, besides interest. Each of the defendants by a separate answer, among other things, denied the joint contract, and the joint liability alleged in the complaint; alleged that the oil was delivered and carried under a special contract printed and in writing, copies of which were delivered to plaintiffs, wherein the several rights and liabilities of plaintiffs and

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defendants, and each|of them, with respect to plaintiffs and and to each other, relative to the subject-matter of the complaint, were limited, defined and determined, and that its undertaking in regard to the oil was only under such contract, which it had fully performed; that it was not liable for losses accruing upon the route of the other defendant; and each defendant also alleged, as a separate defense, that there was a defect of parties plaintiff, and that several other persons named were then, and also at the time of the making of the contract and the transportation of the oil, jointly interested with the plaintiffs in the oil. The action was brought to trial at a circuit, and the jury rendered a verdict in favor of the plaintiffs for upwards of $23,000. From the judgment entered upon that verdict the defendants appealed to the general term,[and from affirmance there to this court.

George Hoadley and Wm. G. Choate, for app’lts; Austen G. Fox, for resp’ts.

A point is made on behalf of the defendants that the plaintiffs cannot maintain this action on the ground that some of the seaman on the whaling vessels were, to some extent, joint owners with them of the oil. It is undoubtedly the general rule in this state that an action against a common carrier for the breach of his contract, or of his duty to carry, must be brought in the name of the owner of the goods, although the contract may have been made or the goods shipped by another. Green v. Clarke, 12 N. Y., 343 ; Krulder v. Ellison, 47 id., 36. The rule has, however, been much questioned, and has some exceptions.. Blanchard v. Page, 8 Gray, 281 ; Finn v. Western R. Corp., 112 Mass., 524 ; Arbuckle v. Thompson, 37 Pa. St., 170 . Where the consignor, although not the general owner, has a. lien upon or a special interest in the goods, and makes the contract and pays the consideration for the carriage, he may bring an action for the breach of their contract in his. own name in order that he may protect his rights. Here these plaintiffs made this contract in their own names, and with their own money paid the agreed freight, and they were both consignors and consignees It does not appear what ownership, if any, in the oil, the seamen had, nor does it appear what the relations between the plaintiffs and them were. For aught that appears, the plaintiffs were under a special duty to deliver this oil in the city of New York, and had a special interest in the whole of the oil to protect. As they were in control of the oil, and made the contract for its transportation, being both consignors and consignees, in the absence of proof to the contrary, it must be assumed that they had sufficient title and right to maintain this action and enforce their contract with the defendants;, and, in so holding, it is believed that we are in conflict with, no authority.

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But the evidence does not show that the seamen were joint owners with the plaintiffs of the oil. It was simply testified that “they were interested in the oil,” and that evidence was not sufficient to establish that they were either partners or joint owners with the plaintiffs. It is more reasonable to suppose from such evidence that they were simply interested in the proceeds of the oil, and such is believed to be the common arrangement between the owners of whaling vessels and their seamen when the latter have an interest in the product of the whaling voyage. Baxter v. Rodman, 3 Pick., 436 ; Grozier v. Atwood, 4 id., 234; Bishop v. Shepherd, 23 id.,492. We are therefore of opinion that the seamen were not necessary parties to the action.

The Panama Railroad Company was organized to construct, maintain and operate a railroad across the isthmus from Panama to Aspinwall and the Pacific Mail Steamship Company was organized to navigate steamships on the Pacific and Atlantic oceans. Laws 1848, chap. 266; Laws 1850, chap. 207. It is not disputed that the Panama Railroad Company could receive freight at Panama, and contract to carry it, beyond its terminus, through to the city of New York, and that the Pacific Mail Steamship Company could receive freight at the city of New Nork, and contract to carry it to Aspinwall, and thence by the railroad to Panama. It is the well settled law in this state that a carrying corporation over a portion of a continuous line of transportation may contract to carry beyond the terminus of its route, and that such a contract is not ultra vires. Weed v. Saratoga and S. Ry. Co., 19 Wend., 534 ; Wylde v. Northern R. R. Co, 53 N. Y., 156 ; Root v. Great Western R. R. Co., 45 id., 524; Condict v. Grand Trunk R. R. Co., 54 id., 500. Such contracts have been upheld sometimes upon the ground of estoppel, and sometimes upon the ground that they were incident to the business for which the contracting corporation was organized. While the defendants admit that such contracts could be made, they contend that the Pacific Mail Steamship Company could not contract to receive goods away from its terminus, and to transport them to such terminus over the route of another carrier, and thence transport them over its own route to their destination; that is, while they admit that the steamship company could receive goods at the city of New York, and contract to carry them to Panama on the Pacific coast, they deny that it could receive goods at Panama and agree to transport them to the city of New York. We see no reason for distinguishing between the two kinds of contracts, and for holding that the company could make the one kind and not the other. If, when it receives goods at New York for transportation to Panama, it is engaged in business authorized by its charter, or incident to such business, then, when it procures freight at Panama for transportation to Aspinwall, and thence to New York, it is also engaged in promoting the

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legitimate business for which it was organized. It thus procures freight for transportation upon its steamships, and' the business it thus does at Panama and across the isthmus is just as legitimate as it would be to establish agencies on the Pacific coast to solicit freight for transportation from Aspinwall to New York or to contract with newspapers there to advertise the carrying of such freight. Cannot a railroad company take freight for transportation at a point a few rods from its depot? And, if it may a few rods, why not a few miles? If it may have a depot for the receipt of freight one mile from its terminus, why may it not have a depot fifteen or twenty miles therefrom, and transport the freight thence to its road by any means that it chooses to adopt? The Panama Railroad Company terminated on the Pacific coast at Panama, and there it owned lighters to go out into the ocean to take freight from vessels. If it could send its lighters out one mile, why could it not send them out several miles, for the same purpose, to some convenient port or roadstead? The main business of the steamboat company between Aspinwall and New York was to transport passengers and freight which came from the Pacific coast, and, instead of taking the passengers and freight at Aspinwall, why could it not take them at Panama?

We see no reason for holding that it might not do so in the prosecution of its corporate business, and as incident thereto. Then, again, if, when the steamship company receives goods at New York under contract to carry them to Panama, it is estopped from denying its authority and power to make the contract, why, when it receives goods at Panama under contract to be carried to New York, should it not be equally bound by estoppel ?

We think, therefore, that it is clear, upon principle and authority, that both defendants were competent to enter into contract to carry this oil from Panama to New York; and, as each was competent to contract alone, it cannot be doubted that they were competent to make a joint contract to do it. They could even become partners in the transportation business between Panama and New York, and, so far as we have discovered, the power of corporations thus to become joint carriers has never been denied, but has frequently been recognized. Aigen v. Boston and M. R. Co., 132 Mass., 423 ; Block v. Fitchburg R. Co., 139 Mass., 308 ; Gass v. New York, P. and B. Railroad Co., 99 Mass., 220 ; Hot Springs R. Co. v. Trippe, 42 Ark., 465 ; Insurance Co. v. Railroad Co., 104 U. S., 146 ; Barter v. Wheeler, 49 N. H., 9 ; Wylde v. Northern R. Co., supra; Hutch. Carr. § 160. The right of a corporate carrier to go beyond its terminus to procure freight and passengers, and to transport them to its terminus for carriage over its route, is not absolute and unqualified, but has some limitations. What those limitations are it is not possible, in a general way, to define. The New York Central and Hudson River Railroad Company

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could not establish a line of steamers between Liverpool and. New York to carry passengers and freight from Liverpool to New York in order that it might secure the business of transporting such passengers and freight over its route to Buffalo; but it might run ferry-boats from Staten Island, or from the New Jersey shore, for the purpose of securing passengers and freight for transportation over its route. The right to go beyond its terminus to procure passengers and freight for transportation over its route by a corporate carrier must be exercised within reasonable limits, and under such circumstances that it may fairly be said to be incident to its legitimate corporate business; and our holding is that the Pacific Mail Steamship Company, engaged in transportation upon both the Pacific and Atlantic oceans, did not go beyond reasonable limits in contracting to take freight at Panama, and transport it over the Panama railroad for delivery to its steamships at Aspinwall, its main business being to take freight coming to it over that railroad.

The plaintiffs claim that the contract for the carriage of this oil was made in the city of New York between them and one Bellows, who was the vice-president and general agent of both defendants at that place, and that it was made by correspondence with Bellows, and a personal interview had with him. On the other hand, the defendants claim that the contract was contained in and evidenced by the bills of lading signed at Panama by one Corwin who was the agent of both defendants at that point, which bills of lading expressly stipulated that the defendants should not be jointly liable for an loss or damage to the oil; that neither of them should be liable, in any event, for any loss or damage accruing upon the route of the other, nor accountable for leakage arising from improper or defective casks, nor for damages of any kind to articles perishable in their nature, nor for unavoidable detention or delay. The trial judge submited all the evidence bearing upon the contract to the jury, and instructed them to find whether it was made with Bellows, as claimed by the plaintiffs, or whether it existed in the bills of lading, as claimed by the defendants; and he also instructed them to find whether the contract was the joint contract of the defendants, or the individual contract of the Pacific Mail Steamship Company; and he charged them that, if they found the contract existed in the bills of lading, they should render a verdict in favor of the defendants; but that if they found it was made with Bellows, as claimed by the plaintiffs, and that it was the joint contract of both defendants, they should then render a verdict in favor of the plaintiffs against both defendants. The jury must therefore have found that the contract was made with Bellows, as claimed by the plaintiffs, and that it was joint; and the only further inquiry is whether there was any evidence to authorize their finding.

There was no proof that Bellows was not authorized to

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contract for both defendants. Nor was there any positive proof that the defendants were not engaged jointly in the business of transportation between New York and Panama. Both defendants had the same agents at Panama and Aspinwall. Bellows was vice-president of both, and appears to have acted for both in the city of New York. Both had officers there in the same building, and the interview between Bellows and the plaintiffs took place in the office of the steamship company. He corresponded and held the interview with the plaintiffs, in reference to through freight from Panama to New York, and the receipt of the oil at Panama, and the care to be taken of it while upon the isthmus, without so far as appears, consulting with any other agent or officer of either company. It does not appear that any other person acted, or was authorized to act, for either company at that time and place in making special contracts for the transportation of goods between New York and San Francisco across the isthmus. It is not disputed that he was authorized to act for and to represent the .steamship company, whose office for the transaction of its business he occupied, and he was in the habit of making .special contracts for the carriage of freight through between New York and San Francisco.

One of the by-laws of the steamship company provided that the vice-president should be the assistant executive officer of the company, and, together with the president, should exercise a general superintendence over each department of business in the company’s office. Goods on the Pacific coast were brought in vessels, and were taken by lighters from the vessels, and carried to the docks of the Panama Railroad Company, and the through freight was divided between the two companies, as follows: Compensation for the lighterage was first deducted for the railroad company, and the balance was equally divided, although the transportation from Panama to Aspinwall took but four hours, while the voyage from Aspinwall to New York took more than twice as many days. The first letter written by Bellows to the plaintiffs was one dated September 18, 1871, in which he stated to them that “we will make the rate on whale oil, Panama to N. Y., 5 and | cts. gold, per gal; Should you decide to send any ships to Panama with oil or bone for N. Y., you will please to give us early notice that we_may be prepared to receive it.” In August, 1872, the plaintiffs wrote Bellows, referring to his letter, and stating that their whaling vessels on their way from the Arctic ocean to. Panama would be due in San Francisco early in November, and inquiring whether there would be facilities for landing five or six thousand barrels of oil without delay at Panama. To this letter, on the 24th of August, 1872, Bellows replied by letter, in which he renewed his offer to carry the oil at the rate previously stated in his letter of September, 1871, and stated that there would be no delay in

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landing at Panama, and closed as follows. “We feel very sure, if you once try this route for your oil shipment, you will ever after have all your shipments made over it.” In the same or the following month, Swift, one of the plaintiffs, went from New Bedford, Massachusetts, where he resided, to New York, and there had the interview with Bellows at the office of the steamship company in which he alluded to the letter which he had received from him, told him the plaintiffs accepted his proposition, and had concluded to order their ships to go to Panama to land their oil, and informed him that, if there was any delay in the oil on the isthmus, there would be a great deal of leakage unless it was in charge of competent coopers. Bellows said they had good coopers on the isthmus. Swift proposed to send out to Panama some coopers from New Bedford who were very competent, and said that there would be no leakage if they went out. Bellows replied that he could send coopers to Panama, but they would not be allowed to do anything there; that the company had competent workmen to take care of the oil; the plaintiffs’ coopers would only be surplus-age and entirely unnecessary. Swift also told Bellows that, if loss occurred on the isthmus from delay there on account of the casks not being properly coopered and taken care of, the plaintiffs would hold the company liable for such loss, and Bellows replied that there would be no loss by fault of the company.

Thereafter, on the fourteenth of October, 1873, the plaintiffs addressed a letter to Bellows, in which they acknowledged the receipt of the letter dated August 34th, and stated that their three ships might get from five to six thousand barrels of oil, and that they would be due at Panama before the first of December, and further stated: “We shall depend upon our cargoes having the first chance, and that they will not be crowded out or delayed by oil from other ships whose freight has been engaged subsequently to ours. Please be good enough to write to us upon this point, and assure us that there will be no delay at Panama or Aspinwall. Can you not send the oil direct to this port (New Bedford) ? We beg to ask what facilities there are at Panama to repair the cutwater of the J. Perry, which has been knocked off by the ice quite low down under water. Please state your rate of freight for supplies sent our ships from New York.” To this, on the next day. Bellows replied, saying that they would send a copy of their letter “ to our agent at Panama, with instructions to give your oil, after arrival there, the best dispatch possible. We have a gridiron at Panama on which we take up our coast steamers, and there will be no difficulty in taking up your vessel for the repairs she needs. We inclose you tariff freight rates by our line to Panama.” On the ninth of November the plaintiffs wrote Bellows that they had that day learned by telegram that

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their three vessels had left San Francisco for Panama with 4,150 barrels of oil, and they inquired again for freight rates from New York to Panama. To this letter, on the eleventh of November, 1872, Bellows replied: “We are pleased to learn that you have three cargoes of oil on the way to Panama from San Francisco, and by steamer hence to-morrow we will advise our agent at Panama that he may be on the lookout for them}” and he gave rates of freight from New York to Panama.

This correspondence, together with what was said at the interview between Swift and Bellows, made a special contract between the parties under which the plaintiffs were to deliver the oil at Panama, and the principals of Bellows were to receive the oil from plaintiffs’ vessels, take it upon lighters to the docks, and promptly carry it across the isthmus to Aspinwall without delay, care for the oil upon the isthmus, and see to the coopering of the casks, so that there would be no leakage there, and from Aspinwall transport it to the city of New York. All this was to be done for the single price stipulated. The contract, so far as it went, was complete. It was doubtless expected that bills of lading would be executed, but it could not have been expected that, by them the contract so made should in any way be modified.

Under this contract all the oil was delivered in January, 1873, from plaintiff’s vessels, and the only ground the defendants have for claiming that this was not the contract, under which the oil was transported is the fact that two months afterwards, on the 27th of March, 1873, the common agent of the defendants executed bills of lading which were sent to the plaintiffs, and received by them April 7th. By some delay on the isthmus the oil did not reach Aspinwall, and was not delivered on the steamships until the second or third of April. After the receipt of the bills of lading the plaintiffs did not discover the peculiar stipulations contained in them at variance with the contract which they had previously made. Upon the landing of the oil in New York, the loss of the oil from leakage was discovered, and the plaintiffs paid the stipulated freight, giving notice of their claim for the loss. Under the evidence, the main features, of which we have alluded to, it was certainly competent for" the jury to find that the oil was parted with to the defendants for transportation, and that the defendants entered upon the transportation thereof under the contract claimed by the plaintiffs. The defendants could not, therefor, abrogate or alter that contract by merely signing and mailing bills of lading which did not reach the plaintiffs until after the oil had left Aspinwall, and much, if not all, the loss had accrued. There certainly was no conclusive evidence that the plaintiffs consented to accept the bills of lading in place of the prior contract, and that contract must therefore control. Bostwick v. Baltimore and O. R. Co., 45 N. Y.,

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712 ; Guillaume v. Transportation Co., 100 id., 491; Wheeler v. New Brunswick and C. R. Co., 115 U. S., 29 .

It is clear that the plaintiffs did not understand that they were making several contracts for the transportation of their oil from Panama to New York, but they evidently supposed they were making a single contract with an agent who had authority to contract for the entire route. While the evidence is not conclusive, not even very satisfactory, that the defendants contracted jointly to carry this oil, yet we think there was enough to justify the jury in finding such a contract. Here was the steamship company engaged in transportation both upon the Pacific and Atlantic oceans, making contracts to carry from ports upon one ocean to ports upon the other, and such contracts could be performed only by carriage across the isthmus over the Panama railroad, and that railroad was engaged in transportation across the isthmus of freight almost wholly to or from vessels of the steamship company.

The two companies had common agents upon the isthmus and in New York. Goods were transported, in all cases, for a single through freight from ports on the Pacific to ports on the Atlantic, and that the freight money, after deducting compensation for lightering, was equally divided between the companies, and the same person was vice-president of both companies. Taking into consideration all these matters,—the situation of the two companies, and all the circumstances surrounding them, and the methods of their business as disclosed in the evidence,—it is not an improbable nor an unjustifiable inference that they were jointly engaged in business, and jointly contracted with the plaintiffs.

If the contract was made by the correspondence and personal interview with Bellows, as claimed by the plaintiffs and found by the jury, then, if the defendants are not jointly liable for plaintiff’s loss, they are severally liable. The whole loss was apparently primarily due to unexplained, unjustifiable delay and carelessness upon the isthmus, while the oil was in the possession of the railroad company. For that delay and loss it is liable as a common carrier upon general principles. The steamship company made a special contract to transport the oil without delay from Panama to New York, and to care for it, and cooper the casks upon the isthmus, and it is liable for the loss by virtue of that special contract. Therefore the defendants are either severally or jointly liable for the loss, and whether they shall be held for the loss jointly or severally cannot be very important to them, because it is quite certain from their relations to each other that they will be able to adjust between themselves in a satisfactory manner the joint recovery. The objection to the joint recovery, therefore, appears to be merely technical, and should not prevail unless the judgment is plainly and clearly wrong, and such we think it is not.

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A careful consideration of the whole case has therefore led us tó the conclusion that the judgment should be affirmed, with costs.

All concur.