Case ID: mass_29/html/0302-01.html
Source: Caselaw Access Project
Author: {"author": "Shaw C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Solomon Allen et al. versus Elijah Williams et al.
    
    A factor, being advised of a provisional consignment to him and of a bill of exchange drawn on him by the consignor expressly upon the credit of the consignment, re fused in terms to accept the draft, but afterwards received from the master of the vessel the goods consigned. Whether receiving the goods did not ipso facto render him chargeable as acceptor of the draft, qucere.
    
    Where the shipper of goods fills up the bill of lading with the name of a particular consignee or bearer, the mere delivery of the bill of lading by the shipper, for value, passes the property, against any person except a previous assignee of the bill of lading.
    Where the shipper of goods drew a bill of exchange upon the credit of the con signment, and, as collateral security, delivered to the holder the bill of lading, by which the goods were to be delivered to the defendants or bearer, but the defendants refused to accept the draft and afterwards obtained the goods from the master of the vessel and sold them, it was held, that upon the refusal to accept the draft the holder became entitled to the possession of the goods, and that he might recover of the defendants the proceeds of the sale.
    Assumpsit. Besides the common money counts the declaration contained a count against the defendants, commission merchants in Boston, as acceptors of a bill of exchange drawn at New York by Zabdiel Thayer in favor of the plaintiffs, dated March 18, 1830, for $212, payable at sight. Trial before Morton J. upon the general issue.
    It appeared that Thayer, in New York, on March 18, 1830, shipped on board the schooner Banner 50 barrels of Southern flour, and took two bills of lading showing that the flour was shipped by Thayer for Boston, to be delivered to E. Williams & Co. (the defendants) or bearer. A third bill of lading was, as usual, retained by the master for his own use, and he had no authority from the shipper to deliver it to the defendants or to any other person. The shipper drew the bill of exchange on the defendants and negotiated both the bill of exchange and the bills of lading to the plaintiffs, for a valuable consideration, and gave them a letter of advice by.which he informed the defendants that he had drawn and negotiated the bill of exchange to the plaintiffs and had delivered to them the bills of lading as their security, and that the draft was drawn against this shipment. Before the arrival of the vessel at Boston, the bill of exchange wras presented to the defendants, first on March 20th, for acceptance, and afterwards on March 23d, for payment; and at the same times the bills of lading were tendered to them upon condition that they would honor the draft, which they refused to do. On March 27th the vessel arrived, and the master delivered his bill of lading to the defendants, and they received the flour and sold it. Afterwards the plaintiffs presented to the defendants again- the draft and their two bills of lading, and demanded the flour or the proceeds of it, both of which were refused ; and the defendants claimed a right to hold the same and to carry the same to the credit of Thayer in their account with him ; after which this action was brought.
    On the part of the defendants it was proved, that before this shipment they had advised Thayer, that upon Southern flour they would not accept drafts, on the faith of consignments, for a larger amount than 04 a barrel, that they had already fallen into arrears and Thayer was indebted to them in account, in consequence of their having accepted drafts oh flour at a higher rate ; and therefore Thayer had no reason to suppose that they would accept the draft in question, which was at the rate of 0 4'25 a barrel.
    They also proved, that Thayer was indebted to them in a balance of account, and that Thayer, together with one Huntoon, as partners, were also indebted to them in a balance ; and they claimed to have a lien on the flour for one or both of these balances.
    It was admitted by the defendants, that the gross sales oí the 50 barrels of flour amounted to 0 231 ; that the net balance, after deducting freight, guarantee commissions, charge for insurance, &c. was 0 209-43.
    The case was taken lrom the jury, and a nonsuit or default was to be entered, according to the opinion of the whole Court upon the facts reported by the judge before whom the cause was tried.
    
      Jlylwin and Blair, for the plaintiffs,
    contended that the defendants, by receiving the shipment, accepted the draft.
    The defendants had no lien on the property for a general balance, for they had no possession except by wrong; and a wrongful possession cannot avail them. Kinloch v. Craig, 3 T. R. 119; Ryberg v. Snell, 2 Wash. C. C. R. 294, 403; Walter v. Ross, ibid. 239; Woolrych on Commerc. Law, 59; Lickbarrow v. Mason, 2 T. R. 72; Ilsley v. Stubbs, 9 Mass. R. 65.
    
      
      March 8th
    
    
      
      March 19th.
    
    The plaintiffs having advanced the amount of the draft to Thayer, the owner and shipper of the flour, and having received from him at the time of the shipment the draft and two bills of lading by which the flour was deliverable to the defendants or bearer, the legal property in the flour vested at that time in the plaintiffs. 1 Dane’s Abr. 445, 447, 457; Caldwell v. Ball, 1 T. R. 216; Griffith v. Ingledew, 6 Serg. & R. 429, Coxe v. Harden, 4 East, 211; Woolrych on Commerc. Law, 61; Abbott on Ship. 383; Nathan v. Giles, 5 Taunt. 558; Barrow v. Coles, 3 Campb. 92; Corlett v. Gordon, ibid. 472; 2 Phil. Evid. (6th edit.) 48; Canard v. Atlantic Ins. Co. 1 Peters’s Sup. C. R. 445 ; Ellis v. Wheeler, 3 Pick. 18 ; Grant v. Vaughan, 3 Burr. 1516. If the bills of lading were only pledged as collateral security, the defendants were not entitled to the property without removing the incumbrance. Badlam v. Tucker, 1 Pick. 389.
    
      D. Jl. Simmons and Gay, contra.
    
    No implied acceptance of the bill of exchange can be raised against the defendants’ positive refusal to accept it. Mason v. Barff, 2 Barn. & Aid. 26, 33. Their promise to accept was not an acceptance, because the draft was not in conformity to the promise.
    The flour was not assigned to the plaintiffs. To give them a title, the bill of lading should have made the property deliverable to them by name, or should have been indorsed to them by the defendants, the consignees. The words to bearer, in an instrument of this sort, are equivalent to the words to order ; and a mere delivery of the bill of lading to the plaintiffs was not sufficient to pass the property. Walter v. Ross, 2 Wash. C. C. R. 283. The defendants had a lien for their general balances against Thayer and against Huntoon and Thayer.
   Shaw C. J.

delivered the opinion of the Court. The general question is whether the plaintiffs are entitled to recov er, and if so, upon what ground and for what sum.

Upon the question whether the defendants are liable as acceptors, the Court give no opinion. On the one side it is contended, that when a consignee is advised of a provisional consignment, and at the same time of a bill of exchange drawn expressly upon the credit of such consignment, and the bill of lading and the draft are tendered together, if the consignee will accept the consignment at all, he does ipso facto accept the draft, and may be charged in an action as acceptor. On the other hand it is insisted, that when the drawee not only declines accepting the draft, but in terms refuses so to do, and gets possession of the property shipped, not by means of the bills of lading, held by the holder of the draft, but by some other means, it would be pressing the doctrine of constructive acceptance too far, to charge such consignee as acceptor. Such a question may well depend upon a careful discrimination of the circumstances of each particular case ; but here the Court have not found it necessary to give any opinion. The proceeds of the sales of the property, disallowing commission, and guaranty, for which under the circumstances and against these plaintiffs, the defendants had no right to charge, were more than sufficient to pay the draft.

But upon the other ground, the Court are all of opinion that the plaintiffs are entitled to recover.

By the shipment and the form of the bill of lading, Thayer the shipper had a right to direct the disposition of this shipment of flour. By inserting the names of the defendants as consignees, they would derive no property in the flour, or interest or title to it, nor any right to take possession of it, until effect should be given to it, by a delivery to them by the ship per himself, or by some person by him duly authorized. The shipper has the sole authority in the first instance to direct the consignment; and if he fills up the bill of lading with the name of a particular consignee or bearer, with a view to some negotiation of his own, which however he does not accomplish, and does not deliver the bill of lading, the insertion of such name gives the consignee no authority over or interest in it. So where the name is left blank, the property passes by a delivery of the bills of lading by the shipper. Low v. De Wolf, 8 Pick. 101.

Here it is very manifest that the bill of lading was designed to vest the property in the defendants, provisionally, that is, in case their acceptance of the accompanying bill of exchange, otherwise in the bearer, being any person to whom the bill of lading should lawfully come for a good consideration by delivery of the shipper. The defendants by refusing to make themselves the consignees upon the terms offered, as they were well warranted in doing, by the notice which they had given to the shipper, did thereby nevertheless repudiate and reject it altogether. They derived no title or authority under the bill of lading, because the master had no authority from the shipper to deliver his part of the bill of lading to them, and because it is quite apparent from the facts, that they had full notice, from the production of the draft and bills of lading previously offered by the plaintiffs, that the plaintiffs had a claim therein for valuable consideration derived from the shipper, and that the master had no authority to deliver his part of the bill of lading to them, so as to give them either legal title or lawful pos session.

It is equally apparent, that in the event which happened, the refusal of the defendants to receive the consignment upon the terms offered, the plaintiffs became entitled to have possession of the flour as consignees.

We have already stated, that in our view this bill of lading was provisional, that in case the defendants would accept the draft the consignment was to them, otherwise to the bearer. In this case the plaintiffs were such bearers. They had given value for the draft and took the bill of lading as collateral security. It is immaterial whether they had an absolute property or a lien ; either would be quite sufficient to maintain this suit against the defendants, who possessed themselves of the goods without title, and with a knowledge of the plaintiffs’ title.'

Nor is it material to inquire, how far, and under what limitations, a bill of lading is to be taken to be a negotiable instrument. A bill of lading to bearer, or even in blank, delivered by the shipper, for value, would be sufficient to enable the holder to receive and hold the property, against any person except a prior indorsee without notice. Nathan v. Giles, 5 Taunt. 558.

Even a sale or pledge of the property without a formal bill of lading, by the shipper, would operate as a good assignment of the property ; and the delivery of an informal or unindorsed bill of lading, or other documentary evidence of the shipper’s property, would be a good symbolical delivery, so as to vest the property in the plaintiffs. But it is not necessary to place the case upon this ground, as we are all of opinion, that upon the refusal of the defendants to accept the consignment upon the terms offered, the alternative destination to the plaintiffs took effect, and they became entitled to claim as holders of a bill of lading of the goods deliverable to bearer.

As to the claim of the defendants to have a lien upon this property, either for their general balance against Thayer, or against Huntoon & Co. of which Thayer was a member, it seems quite clear that no such lien could exist; and the state of the dealings between the defendants and those parties becomes wholly immaterial, because the goods never came lawfully into the possession of the defendants. The delivery of the property to them, by the master, was wholly without authority, and gave them neither valid title nor lawful possession.

As the defendants have no title, as the sale of the property was a conversion, the plaintiffs have a right to waive the tort and recover the proceeds of the sale. 
      
       See Mendizabal v. Machado, 3 Moore & Scott, 841; S. C. 6 Carr & P 218; Laing v. Barclay, 2 Dowl. & Ryl. 530.
     
      
       See Stanton v. Eager, 16 Pick. 467; Rowley v. Bigelow, post, 307