Tire Rubber Co. v. Transit Co. , 230 Mich. 598 ( 1925 )

I am unable to agree with the opinion prepared in this case by Justice MOORE. Plaintiff's case made on the record is this: Under a standard bill of lading it shipped by defendant's steamer Alabama several consignments of tires. The Alabama, when near Chicago, suffered an accident; the tires were not destroyed but were damaged so as to be unsuitable for delivery; they had to be reconditioned, rewrapped and repacked. The parties then entered into an agreement that the tires were to be returned from Chicago to plaintiff's plant in Muskegon and by it reconditioned, rewrapped and repacked and were then to be delivered to and accepted by defendant and forwarded under the original bill of lading; that the tires were so returned to plaintiff; it reconditioned, rewrapped and repacked them; they were ready for shipment and by telephone plaintiff notified defendant of this fact, but defendant claiming its warehouse was overcrowded declined to then accept them for shipment and they were burned in a fire which destroyed plaintiff's plant.

When the Alabama met with an accident and plaintiff's tires were damaged, it had a cause of action against defendant; it could have brought suit and recovered its damages; it could also adjust such damages by agreement; defendant also gave it another option; in its letter to plaintiff notifying it of the damage to its shipment and shipments of others, it said:

"If any of the shippers prefer to abandon the property to the underwriters we have no objections."

Plaintiff preferred to adjust matters because, as the record discloses, it was short of tires and there was a big demand for them. It also reserved the right to substitute other tires in the reshipment. In its letter to defendant, it said:

"The reshipment to our customers may not include the identical articles in the original shipment, but will include like articles."

While it reserved this option it did not exercise it. In my judgment, accepting in full the case made by plaintiff, it presents a question of law pure and simple. There is no claim that the fire which destroyed plaintiff's plant was in any way caused by the negligence of the defendant, and plaintiff must recover, if at all, on the theory that at the time of the fire when the goods were still in its actual possession and before defendant had accepted them for reshipment, the relation of carrier and shipper existed between the parties, making defendant liable as an insurer.

When the accident befell the Alabama and the tires were thereby rendered unsuitable for delivery the first shipment came to an end. Under plaintiff's claim, before they were shipped again they were to be returned to it, reconditioned, rewrapped and repacked and were then to be redelivered to and accepted by defendant and reshipped by it to the consignees. The crucial question of law in my judgment is this: Did the relation of shipper and carrier exist between the parties before the tires were redelivered to defendant and accepted by it for immediate transportation? and the solution of the question depends upon what is necessary to create this relation so as to impose on the defendant the extremely hazardous responsibility of a common carrier. In 1 Hutchinson on Carriers (3d Ed.), § 105, it is said:

"The duties and obligations of the common carrier with respect to the goods commence with their delivery to him; and this delivery must be complete, so as to put upon him the exclusive duty of seeing to their safety. The law will not divide the duty or obligation between the carrier and the owner of the goods. It must rest entirely upon the one or the other; and until it has become imposed upon the carrier by a delivery and acceptance, he cannot be held responsible for them."

In 4 R. C. L. p. 688 it is said:

"A contract with a common carrier for the transportation of property is, as is well known, one of bailment; consequently, in order to charge him for its loss, it is necessary to establish as a fact that it was delivered to and accepted by him for that purpose, and until such delivery and acceptance he is ordinarily not responsible for the safety of articles intended for shipment. The point of time marking the commencement of the carrier's liability is therefore that moment when the shipper surrenders the entire custody of his goods, and the carrier receives complete control of them, for the purpose of shipment at the earliest practicable opportunity in the usual course of business."

In St. Louis, etc., R. Co. v. Murphy, 60 Ark. 333 (30 S.W. 419, 46 Am. St. Rep. 202), the court said:

"When the shipper surrenders the entire custody of his goods to the carrier for immediate transportation, and the carrier so accepts them, eo instanti the liability of the common carrier commences. When this occurs, the delivery is complete, and it matters not how long, or for what cause, the carrier may delay putting the goods in transitu; if a loss is sustained, not occasioned by the act of God or the public enemy, the carrier is responsible. But, on the contrary, as there is no divided duty of safe keeping, and no apportionment, in the event of a loss, between the owner and the carrier, the surrender of control over the goods by the shipper must be such as to give the carrier the unqualified right to put at once in itinere, and the carrier must have received them for that purpose. So that, when goods are delivered to the carrier that are not yet ready for shipment, awaiting further orders from the owner, or the happening of some contingency or compliance with some condition before they are ready to be moved, the liability of the carrier in the meanwhile can be no greater than that of an ordinary depositary or bailee. These general principles are recognized by all the authorities."

Justice Cothran in a concurring opinion in Behrman v.Railroad Co., 118 S.C. 48 (109 S.E. 397, 22 A.L.R. 957), quite clearly pointed out what proof is necessary to fix liability as a common carrier. He said:

"In order to charge the carrier with the practically absolute liability of a common carrier as compared with the limited liability of a warehouseman, the burden is upon the owner of the goods to establish: (1) That there has been a complete delivery of the goods to the carrier, actual or constructive; (2) that the delivery has been made for shipment, with full shipping directions; (3) that the goods have been accepted by the carrier for immediate shipment or at such time as the convenience of the carrier may suggest; (4) that the goods have gone into exclusive possession of the carrier and that nothing further is to be done with or to them by the owner."

In Turner Co. v. Railroad Co., 86 Conn. 71 (84 A. 298, Ann. Cas. 1913D, 637), it was said:

"The law is well settled that until the goods to be carried are delivered for immediate transportation, the receiver does not hold them in the capacity of common carrier. His liability in that capacity commences upon the complete delivery of the goods for immediate transportation."

And in Barron v. Eldredge, 100 Mass. 455 (1 Am. Rep. 126), it was said:

"The responsibility of a common carrier, for goods intrusted to him, commences when there has been a complete delivery for the purpose of immediate transportation. * * * The delivery must be for immediate transportation, and, of course, it cannot be complete if anything remains to be done by the shipper before the goods can be sent on their way. * * * The more stringent liability of a common carrier only attaches when the duty of immediate transportation arises. It then shifts from that of warehouseman, although the goods remain unmoved in the storehouse. Whether the responsibility be in one capacity or the other is seldom a matter of express agreement between the parties. It arises out of the relation which the parties sustain, and the duties which the law imposes. These propositions are elementary, and need no extended citation of cases."

In London, etc., Ins. Co. v. Railroad Co., 144 N.Y. 200 (39 N.E. 79, 43 Am. St. Rep. 752), it was said:

"The rule as to the responsibility of the carrier is laid down in varying phraseology in a variety of cases, as follows: To render a common carrier liable for goods to be carried by him, the fact that the goods were actually delivered to him, or to some person authorized to act in his behalf, must be established. His liability attaches only from the time he accepts the goods to be carried. To complete the delivery of goods to the carrier it is essential that the property be placed in a position to be cared for, and under the control of the carrier or his agent, with his knowledge and consent. The liability of a railroad company as common carrier of goods delivered to it attaches only when the duty of immediate transportation arises. So long as the shipment is delayed for further orders as to destination of the goods, or for the convenience of the owners, the liability of the company is that of warehousemen."

See, also, Chicago, etc., R. Co. v. Powers, 73 Neb. 816 (103 N.W. 678); Kansas City, etc., R. Co. v. Cox, 25 Okla. 774 (108 P. 380, 32 L.R.A. [N. S.] 313); Dixon v. Railway Co.,110 Ga. 173 (35 S.E. 369); Wells v. Railroad Co.,51 N.C. 47 (72 Am. Dec. 556); O'Neill v. Railroad Co., 60 N.Y. 138;Stewart, Ralph Co. v. Gray Bro., 93 Tenn. 314 (27 S.W. 664); Burrowes v. Railway Co., 85 Neb. 497 (123 N.W. 1028, 34 L.R.A. [N. S.] 220); Reed and Walker v. RailroadCo., 3 Houston (Del.), 176, 209; Illinois Cent. R. Co. v.Hornberger, 77 Ill. 457; L.R.A. 1916C, 608, note.

The case of Barron v. Railroad Co., 2 Ala. App. 555 (56 So. 862), is upon principle analogous to the instant case. The plaintiff shipped lumber from Brent, Alabama, to Cairo, Illinois. He had a stopover privilege, sometimes referred to as "manufacturing in transit," permitting him to dress or plane the lumber at a planing mill near Tuscaloosa, Alabama; while at this mill the lumber was destroyed by fire. It was said by the court:

"The defendant, by its two special pleas, admitted that it received the lumber for transportation to Cairo, Ill., and admitted that the lumber was never delivered at that point. The defense set up was that 'the lumber was received for transportation upon the express agreement that the carrier would temporarily surrender the possession to the plaintiff or its agent at the Harder planing mill, near Tuscaloosa, Ala., for the purpose of having same dressed;' and it was averred that, in compliance with said agreement, the defendant delivered said lumber to the plaintiff or its agents at the said Harder planing mill, and that while it was in the plaintiff's possession, or the possession and control of his agents, the same was destroyed by fire, without any fault on the part of the defendant. While the defendant, in the absence of some special contract limiting and qualifying its common-law liability, is an insurer of the goods to the point of destination, and until the consignee has had a reasonable time in which to remove the goods, yet this rule necessarily contemplates that after the goods are once committed to the carrier, its possession and control continues over every mile of the route, and during every hour of the time, until the arrival of the goods at the point of destination. We know of no rule of law and no principle of public policy, and our attention has been called to none, which would hold the carrier an insurer while the goods, by some agreement with the owner, are temporarily out of the possession or control of the carrier, and while the same are actually in the possession of the owner, or some one as his agent. Under the averments of the special pleas, the lumber was neither actually nor constructively in the possession of the defendant at the time of the burning, but it was at that very moment of time in the possession of the Harder planing mill, and the possession of the latter was the possession of the plaintiff. It must follow, therefore, that, at the time of the destruction of the lumber, the rule making the carrier an insurer of the goods, in the absence of some special contract, finds no real application to the facts in this case."

These and other authorities which might be cited clearly demonstrate that before the relation of shipper and carrier can arise and the liability of insurer attach to the carrier the goods must be in a condition for immediate shipment with nothing left to be done to them and they must pass out of the possession and control of the shipper into the possession and control of the carrier and be received by the carrier for immediate shipment. While the transportation company may under certain circumstances be liable for unreasonable refusal to accept shipments, a subject to which I shall presently refer, its refusal to accept goods offered does not impose upon it the liability of common carrier as an insurer because it does not create the relation of shipper and carrier, a relation necessary to impose such liability. Under all the authorities the goods must be accepted for transportation in order to create such relations and impose such liability. When the first shipment came to an end by the accident to the Alabama and a new contract was made by the parties, the relation of shipper and carrier was at an end. While the plaintiff was doing the work of putting the goods in condition for reshipment the relation of shipper and carrier did not exist, and not until that work was completed and the goods again delivered to and accepted by defendant for immediate shipment could such relation be reestablished.

The fact is stressed that the original bill of lading was not canceled, and that when the goods again went forward it was agreed they should go forward under the original bill of lading. Plaintiff can claim no greater rights from this than it could if a new bill of lading had been issued. The shipment was an interstate shipment, and the view of the Supreme Court of the United States is instructive. In Missouri Pacific R. Co. v.McFadden, 154 U.S. 155 (14 Sup. Ct. 990) Mr. Justice White, speaking for the court, said:

"Whilst the authorities may differ upon the point of what constitutes delivery to a carrier, the rule is nowhere questioned that when delivery has not been made to the carrier, but, on the contrary, the evidence shows that the goods remained in the possession of the shipper or his agent after the signing and passing of the bill of lading, the carrier is not liable as carrier under the bill."

See, also, St. Louis, etc., R. Co. v. Knight, 122 U.S. 79, 93 (7 Sup. Ct. 1132); Morrison Grain Co. v. Railway Co.,182 Mo. App. 339 (170 S.W. 404). In our recent case of Alvin R. DurhamCo. v. Railway Co., 224 Mich. 477, although the freight had been paid and the bill of lading surrendered we held the relation of carrier and shipper still existed and in so doing we but followed a recent decision of the United States Supreme Court in construing the uniform bill of lading.

If the carrier unreasonably discriminates against a shipper, unreasonably refuses to accept goods for shipment, unreasonably delays shipments, he may be liable for such damages as result. But damage by fire to the goods while still in the custody of the shipper is not recoverable because the delay is not the proximate cause of the damages. In St. Louis, etc., R. Co. v.Insurance Co., 139 U.S. 223 (11 Sup. Ct. 554), it was said by Mr. Justice Gray, speaking for the court:

"The delay of the defendant railway company to furnish transportation according to its contract with the compress company was in no legal sense a cause of the destruction of the cotton. It was simply one of a series of antecedent events without which the loss could not have happened, for, if the cotton had not been there, it would not have been burned. The cause of the loss was the fire, kindled by some unknown means, and in no way arising from or connected with the neglect of the defendant to furnish transportation. Upon principle and authority, that neglect was not the direct and proximate cause of the loss by fire, and did not make the defendant responsible for that loss to the owners of the cotton or to their insurers."

See, also, McLane, Swift Co. v. Botsford Elevator Co.,136 Mich. 664 (112 Am. St. Rep. 384); Martin v. Railway Co.,55 Ark. 510 (19 S.W. 314).

I think we may with profit consider a few of our own cases. In Michigan Southern, etc., R. Co. v. Shurtz, 7 Mich. 515, the plaintiff had delivered to the railroad company a quantity of wheat to be shipped and had been given a receipt therefor, but had not left shipping instructions. The wheat was destroyed by fire. It was held that the liability of the railroad company as a common carrier had not attached and it was said by Chief Justice MARTIN:

"When the goods are delivered to be transported to a specified point, the liability of the company as carriers commences immediately; but if they are deposited to await orders — if the company can not carry them because ignorant of the contemplated destination, or because no destination has been concluded upon by the owner, it would be gross injustice to hold them subject to the extraordinary liabilities of common carriers, while thus awaiting the determination of their owner. While the wheat was lying in their warehouse awaiting the determination of Shurtz as to its destination, the company can not be regarded as anything more than gratuitous bailees, and are liable only as such."

In Hasse v. Express Co., 94 Mich. 133 (34 Am. St. Rep. 328), plaintiff had sent by express three c. o. d. packages to Marquette. Notice to one of the consignees was given and the other two called and said they would pay for and take the packages in a few days. The packages were destroyed by fire. It was held that the liability as a common carrier was at an end, that the only liability was that of a warehouseman and that plaintiff could not recover.

In Stapleton v. Railway Co., 133 Mich. 187, the agent of the plaintiff collected empty bottles and cases and left them at defendant's station and they were shipped over defendant's line. It was the claim of the agent that the goods were ready for shipment and he had notified defendant's agent to ship them out. Defendant claimed that the agent of plaintiff was in the habit of bringing the bottles to the platform and then sorting them and getting them ready for shipment and then notifying defendant's agent that they were ready for shipment when a bill of lading was issued and the goods shipped out, and that on this occasion he had no notice to ship. The goods were destroyed by fire. It was held (we quote from the syllabus):

"When a consignor of goods delivers them to the railroad company, relinquishing all control over them, the company becomes immediately liable as a common carrier; but if the goods are merely placed in the company's depot for the consignor's convenience, and are not ready for shipment until he has done something further to them, the company is not so liable."

And it was said by Mr. Justice MOORE, speaking for the court:

"If in this case Mr. Bogue had done all he intended to do to the goods before the goods were shipped, and had notified the agent of the defendant they were ready for immediate shipment, and the agent agreed to forward them, that would be sufficient to make the company liable as a common carrier. 5 Am. Eng. Enc. Law (2d Ed.), 180. If this had not been done, it would not have been so liable."

I think the judgment should be reversed and the case remanded with instructions to enter judgment for the defendant nonobstante veredicto.

CLARK, J., concurred with FELLOWS, J.