Hils Co. v. Cincinnati, New Orleans & Texas Pacific Railway Co. , 42 Ohio App. 103 ( 1931 )

This cause is brought into this court on error from the court of common pleas of Hamilton county, wherein judgment was rendered for the defendant railway company.

The case was tried to the court, a jury having been waived.

The plaintiff in error, the C.L. Hils Company, brought suit against the railway company for damages caused by delay in a shipment of what is known as "breakable cast scrap" iron. The amended petition contained six causes of action. The first covered a shipment of scrap iron from Alcoa (Marysville), Tennessee, to Cincinnati. The other five causes of action covered shipments of similar material from Somerset, Kentucky.

The evidence conclusively shows that there was delay in the shipments and that this delay was due to the negligence of the railway company.

The evidence shows further that the market value of the material was less at the time of delivery than it was at the time when the iron should have been delivered.

There is no evidence that the consignee, who became the owner of the goods by taking up drafts accompanying the order bills of lading, suffered any damage other than the simple change in the market price. The goods were sold in transit by the shipper, and were purchased by the consignee to break up into smaller pieces and resell.

The shipments from Somerset, Kentucky, moved on bill of lading marked "deadhead."

The iron was sold by the railway company to a salvage company, and a contract existed between the railway company and the salvage company in terms as follows:

"This agreement made and entered into this 19th day of April, 1923, by and between the Cincinnati, New Orleans Texas Pacific Railway Company, a corporation, hereinafter called the Railway Company, and J.L. Rissman and H. Levey, partners doing business under the style and firm name of Rissman-Levey Salvage Company, of Milwaukee, Wisconsin, hereinafter called the Salvage Company, witnesseth:

"That said Railway Company hereby agrees to sell to said Salvage Company, and said Salvage Company hereby agrees to buy from said Railway Company, on the terms hereinafter stated, those certain thirty-seven (37) locomotive engines numbered as follows: 6000, 6005, 6008, 6113, 6124, 6126, 6133, 6136, 6141, 6105, 6150, 6152, 6154, 6157, 6163, 6164, 6406, 6409, 6411, 6412, 6414, 6416, 6102, 6111, 6116, 6117, 6118, 6130, 6137, 6147, 6153, 6155, 6162, 6405, 7035, 7036 and 7055; and the tenders belonging to said engines, respectively.

"The terms of said sale and purchase are:

"The total price to be paid for said engines and tenders is twenty-nine thousand and six hundred dollars ($29,600.00) payable as follows: Five Thousand Dollars ($5,000.00) in cash upon delivery of this agreement, and the remainder in cash on or before one o'clock p.m., Thursday, April 26, 1923.

"Upon payment of said Twenty-nine Thousand and Six Hundred Dollars ($29,600.00) as aforesaid, the Railway Company will deliver said locomotive engines and tenders to said Salvage Company upon the tracks of said Railway Company at Somerset, Kentucky, and the said Salvage Company will cause the same to be broken up and loaded as scrap material on cars of the Railway Company to be furnished by it at Somerset, Kentucky, within ninety days from said April 26, 1923.

"Said Railway Company will deliver said scrap so loaded at Cincinnati, Ohio, to the Salvage Company, free of transportation charge; and in consideration thereof said Salvage Company does release said Railway Company from liability for loss, damage, or injury to the said scrap while in transit or in custody of said Railway Company, whether the same be caused by negligence or otherwise.

"In Testimony Whereof, said The Cincinnati, New Orleans and Texas Pacific Railway Company has caused these presents to be signed, in duplicate, by J.B. Munson, its Vice-President, and the same are hereunto subscribed by Rissman-Levey Salvage Company by Jacob L. Rissman, a member of said firm thereunto duly authorized, on the day and year first above written.

"The Cincinnati, New Orleans Texas Pacific Railway Company, "By [Signed] J.B. Munson, "Vice-President.

"[Signed.] Jacob L. Rissman, "Harry Levey, "By Jacob L. Rissman,

"Partners under the style and firm name of Rissman-Levey Salvage Company."

This contract had no reference to the carload of "scrap" mentioned in the first cause of action. With the exception of the notation on the Somerset shipments, "dead head Somerset to Cincinnati, O.," the bills of lading were the ordinary standard form order bill of lading.

The Somerset shipments were carried by the railway company and delivered to the Cleveland, Cincinnati, Chicago St. Louis Railway Company by mistake. Ultimately they were delivered by the Baltimore Ohio Railroad Company to the plaintiff in error.

The railway company was the vendor of this merchandise. Under its contract with the salvage company, the purchaser of the goods, it became a private carrier, wholly separated in character from its status as a common carrier. In its capacity of vendor of its own property it had full right to make this contract. Santa Fe, Prescott Phoenix Ry. Co. v. Grant BrothersConstruction Co., 228 U.S. 177, 33 S. Ct., 474, 57 L. Ed., 787. This contract was broad enough in its terms to include release of liability for any loss due to delay.

The words, "any loss, damage, or injury to such property," have been construed to mean and include loss due to delay. New York,Philadelphia Norfolk Rd. Co. v. Peninsula Produce Exchange ofMaryland, 240 U.S. 34, 36 S. Ct., 230, 60 L. Ed., 511, L.R.A., 1917A, 193.

The consignee vendee of the salvage company while it did not inspect the bills of lading could have done so, and if it had inspected them before taking up the drafts could have then observed that the shipments were "dead head." There is no tariff provision for such shipments where the railroad is acting as a common carrier. The consignee is bound to know the tariff regulations. Pittsburgh, Cincinnati, Chicago St. Louis Ry. Co. v. Fink, 250 U.S. 577, 40 S. Ct., 27, 63 L. Ed., 1151; Chicago Alton Rd. Co. v. Kirby, 225 U.S. 155, 32 S. Ct., 648,56 L. Ed., 1033, Ann. Cas., 1914A, 501; Cleveland, Cincinnati, Chicago St. Louis Ry. Co. v. McKenzie Lumber Co., 112 Ohio St. 80,147 N.E. 8.

The plaintiff in error was therefore put on notice of the special character of the shipment and could have refused it if it saw fit. It took no greater rights than its vendor.

This disposes of the last five causes of action. There can be no recovery by the plaintiff in error for the reasons stated.

It is claimed by plaintiff in error that as to all six shipments it is entitled to damages for the delay in carriage due to the negligence of the railway company, measured by the difference in the market price of the commodity when the shipments should have been received and when they were received.

This is the general rule as to the measure of damages, but is not a rule establishing the existence of damages.

It is to be borne in mind that in no case was the shipment intended for immediate market, but, on the contrary, was to be broken up and sold in the market for small scrap. While there is some authority for the statement that the rule applies whether the shipment is designed for immediate market or not, as in Sutherland on Damages, Fourth Edition, volume 3, Sections 906, 907, an examination of the supporting citations fails to show any controlling authority applicable to the facts in the instant case.

Recovery of damages for delay in shipment must be limited to compensation for loss. Such damages are not to be identified as a penalty imposed upon the carrier for failure to deliver on time. In the instant case the loss was but a paper loss. We do not hold that it is necessary to show a loss of a specific sale, but where the character of the commodity is to be changed into a different commodity, affected by a different market and the prevailing prices therein, in the absence of a showing that the delay caused the transformed commodity to reach the market to the damage of the consignee, we are unable to find the presence of any damages compensation for which the carrier must be held liable.

We therefore find no error in the judgment of the court of common pleas of Hamilton county in rendering judgment in favor of the defendant in error on all six causes of action.

Judgment of the court of common pleas of Hamilton county is affirmed.

Judgment affirmed.

HAMILTON and CUSHING, JJ., concur.