New York Central Railroad v. Warren Ross Lumber Co.

The action is brought to recover freight charges claimed to be due from the defendant. On or about May 16, 1912, the S.L. Eastman Company of Saginaw, Michigan, shipped a car of lumber consigned to defendant, Warren Ross Lumber Company of Jamestown, New York, destination Boston, Massachusetts. Before the arrival of the car at Boston, the Warren Ross Lumber Company wrote the following letter to plaintiff:

"DEAR SIR:

"Upon arrival of car A.G.S. 8919, consigned to ourselves, please deliver this immediately to Schieck-Johnson Company, of your city, upon payment of freight charges.

"If you are not the proper party to handle this matter, please hand it to the official in charge, and oblige,

"Very truly yours, "WARREN ROSS LUMBER COMPANY."

In compliance with this letter, plaintiff delivered the car to the Schieck-Johnson Company, but it did not collect the freight charges. It now seeks to collect its bill for such charges from the defendant, the Schieck-Johnson Company having become bankrupt.

The standard bill of lading provides that the owner or consignee shall pay the freight. Defendant contends that it was the duty of the plaintiff to collect the freight from the Schieck-Johnson Company pursuant to instructions contained in the letter quoted above and that delivery without such collection released defendant from any liability therefor. Such contention we cannot sustain.

The consignor is ordinarily liable for freight charges. He requires the carrier to perform the service when he delivers the goods for transportation and thereby obligates himself to pay therefor. The usual stipulation in the bill of lading that the consignee shall pay the freight imposes no obligation on the carrier to insist on payment of freight before delivery to the consignee. It is not a part of the contract between consignor and carrier that the latter shall collect its bill of the consignee. The carrier may neglect to collect of the consignee and collect of the consignor. (Wooster v. Tarr, 8 Allen [Mass.], 270;Jobbitt v. Goundry Hurd, 29 Barb. 509, 511; PortlandFlouring Mills Co. v. British Foreign Marine Ins. Co., 130 Fed. Rep. 860; Coal Coke Ry. Co. v. Buckhannon R.C. C.Co., 77 W. Va. 309; A., T. S.F. Ry. Co. v. Stannard Co.,99 Kans. 720; C. N.W. Ry. Co. v. Queenan, 102 Neb. 391.)

But the consignee may also become liable for such charges by its own act. While no contractual relation arises between carrier and consignee by the mere designation of the latter as consignee, the consignee becomes liable for the freight charges when an obligation arises on his part from presumptive ownership, acceptance of the goods and the services rendered and the benefits conferred by the plaintiff for such charges.

As to plaintiff, defendant stood in the relation of owner of the carload of lumber. The bill of lading designated it as consignee. That fact is in itself evidence of ownership. It does not appear from the agreed facts that plaintiff had knowledge or notice that defendant was not the owner, or that defendant was not in fact such owner. The Schieck-Johnson Company might, for all that appears, have been the agent of defendant whose duty it was to take delivery on its behalf. As defendant was the presumptive owner, if it accepted the freight in the capacity of owner, the law implied a promise on its part to pay the charges (Pittsburgh, C., C. St. L. Ry. Co. v. Fink, 250 U.S. 577) although the bill of lading did not come into its possession and it had no knowledge of its terms. (N.Y.C. H.R.R.R. Co. v.York Whitney Co., 256 U.S. 406.) When it wrote the letter directing the delivery without notifying the plaintiff that it was not the owner of the goods, it acted either as consignee or volunteer. We may not assume that its letter was the act of a meddler. We must, therefore, presume that it wrote as consignee. It follows that it accepted the goods by an act of ownership when it exercised dominion over them by giving directions for their delivery and the plaintiff was justified in treating it as owner of the goods. (Penn. R.R. Co. v. Titus, 216 N.Y. 17.) It thereby entered into the contract expressed in the bill of lading to pay the charges and became liable to pay such charges unless the words "deliver * * * upon payment of freight charges" discharged its liability when the carrier neglected to collect on delivery to the Schieck-Johnson Company.

The liability of the consignee under these conditions is analogous to the liability of the consignor under the terms of the bill of lading that the consignee shall pay the freight. Such a direction does not exonerate the consignor from liability. The directions given by defendant neither modified the implied contract between carrier and consignee whereby the consignee assumed liability for freight charges, nor amounted to an offer to accept the goods only on condition that freight charges should be collected of the Schieck-Johnson Company. Doubtless plaintiff might have refused to deliver to the Schieck-Johnson Company and retained the goods until its lien was satisfied by the payment of the freight. Doubtless defendant by its instructions recognized such right when it qualified its directions as to delivery. But the directions were for the benefit of the carrier, not for the benefit of the defendant. The carrier was not bound at its peril to enforce payment of freight from the Schieck-Johnson Company and its right to resort to the defendant under the contract was not impaired by delivery of the freight under its direction. The language used in defendant's letter was not contractual. Its effect was merely to give plaintiff an option to demand payment from the person to whom it delivered the goods.

It is unnecessary to consider what would be the rights of the parties if the plaintiff had been chargeable with notice, before the delivery of the goods by it, that defendant was not the owner of the goods.

The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs in this court and in the Appellate Division.

HISCOCK, Ch. J., HOGAN, CARDOZO, McLAUGHLIN, CRANE and ANDREWS, JJ., concur.

Judgment reversed, etc.