Case ID: ad_166/html/0766-01.html
Source: Caselaw Access Project
Author: {"author": ".Lattghlin, J.: Hotchkiss, J. (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joseph Wien, Respondent, v. The New York Central and Hudson River Railroad Company, Appellant.
    First Department,
    March 12, 1915.
    Carrier — refusal of consignee to accept goods — Carmack Amendment to Interstate Commerce Act construed — failure of final carrier to return goods to consignor —initial carrier not liable for such failure — return of goods involves new contract—duty of consignor when consignee refuses to accept.
    Under the so-called Carmack Amendment to the Interstate Commerce Act an initial shipper is hable not only for the negligent acts and omissions of its employees, but of those of connecting carriers resulting in loss to the goods en route, and also for any loss resulting from the failure of the final carrier to notify the consignee of the arrival of the goods at destination, and for its failure on the consignee's refusal to accept them to store the goods for the account of the shipper or to exercise proper care in holding them for him.
    But where there is no notation on a bill of lading or elsewhere with respect to notifying the shipper, or any one, it is presumed that the consignee is the owner, and hence, where the consignee notified the consignor before shipment that he would not accept the goods, the initial carrier is not liable either at common law or under the Interstate Commerce Act, to the consignor, because the final carrier did not notify him that the consignee refused to accept.
    Even assuming that it was the duty of the final carrier to notify the ship per that the consignee refused to accept, and that the initial carrier would be liable for such failure of the final carrier (which rule is not decided), there can be no recovery against the initial carrier, without proof of the resulting damage which is essential to a recovery under the statute.
    Where it appears that the consignee was duly notified that the goods had arrived and refused to accept them, and they were then properly stored and kept by the final carrier, and the consignee himself notified the consignor of these facts, it was the duty of the latter to request that the goods be returned to him if he wished to avert loss or damage.
    
      Quaere, as to whether, under the Federal statute, the initial carrier remained liable for the acts or omissions of the final carrier, when it became a warehouseman after the refusal of the consignee to accept. In the absence of a provision in the bill of lading, neither the common law nor the Federal statute requires the initial carrier to return the goods in the event that the consignee refuses to accept. Such obligation to return can arise solely from a new contract negotiated after the refusal to accept.
    The Federal statute holds the initial carrier liable only under the original shipment, and not for a failure of the final carrier to enter into a new contract with the consignor to reship the goods after the consignee has refused to accept.
    Hotchkiss, J., dissented, with opinion.
    Appeal by the defendant, The New York Central and Hudson River Railroad Company, from an order and determination of the Appellate Term of the. Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on or about the 14th day of April, 1914, reversing a judgment of the Municipal Court of the City of New York, borough of Manhattan, first district, in favor of defendant, and granting a new trial.
    
      William Mann, for the appellant
    
      Joseph Levy, for the respondent.
   .Lattghlin, J.:

As I view the case it is unnecessary to decide whether the defendant would have been liable for failing to procure the return of the goods if plaintiff had left the matter in its hands on its agent’s undertaking or promise. The decision of that question would depend upon whether the negotiations constituted a new and valid contract as a carrier for the transportation of the goods back to the point from which they had been shipped, or only a contract for forwarding them (See Gulf, Colorado & Santa Fé R. Co. v. Texas, 204 U. S. 403), or merely an agreement to transmit further shipping instructions to the final carrier for compliance with which it would not be liable as a carrier. (Howatt v. Barrett, 156 App. Div. 849.) The plaintiff, after opening negotiations with the agent of the defendant for the return of the goods, acquiesced in the suggestion of the agent that he take the matter up with the agent in New York of the final carrier, on the ground that by so doing a return of the goods could be had a few days sooner than if the matter were left to the defendant to arrange. The testimony of the plaintiff with respect to his response to that suggestion is as follows: “ I said, very well, and I went to the office of the Atchison, Topeka and Santa Fe Railway Company on Broadway, and saw Mr. Mills,” and thereupon “opened the negotiations ” with him as the agent of the final carrier, and made no report or further application to the defendant.

Under the so-called Carmack Amendment to the Hepburn Bill amending the Interstate Commerce Act, the defendant would have been liable not only for the negligent acts and omissions of its own employees, but for those of connecting carriers resulting in any loss or damage to the goods en route, and also for any loss or damage resulting from the failure of the final carrier to notify the consignee of the arrival of the goods 'at destination and for its failure, on the consignee’s refusing to accept them, to store the goods for the account of the shipper or to exercise proper care in holding them for him. (Adams Express Co. v. Croninger, 226 U. S. 491; Kansas Southern Railway v. Carl, 227 id. 639; Galveston, H. & S. A. R. Co. v. Wallace, 223 id. 481; Atlantic Coast Line v. Riverside Mills, 219 id. 186; Becker v. Pennsylvania R. R. Co., 109 App. Div. 230; Earnest v. D., L. & W. R. R. Co., 149 id. 330; Coovert v. Spokane, P. & S. Ry. Co., 80 Wash 87 ; 141 Pac. Rep. 324; Norfolk & W. R. Co. v. Stuart Draft Co., 109 Va. 184.) The goods were consigned to the People’s Store at Coffey ville, Kans. There was no notation on the bill of lading or elsewhere with respect to notifying the shipper or any one else, and presumptively, therefore, the consignee was the owner, which distinguishes the case from Nashville, C. & St. L. Ry. Co. v. Dreyfuss- Weil Co. (150 Ky. 333; 150 S. W. Rep. 321), where the goods were consigned to the order of the shipper with directions to notify, at the place of destination, one Howe, who refused to accept them, and the initial carrier was held liable, on account of the failure of the final carrier to give it notice of the rejection of the consignment, for damages caused by fire while the goods remained in possession of the final carrier. The duty of notifying the consignor was predicated upon the ground that the bill of lading showed that it owned the goods. The general rule, well settled in this jurisdiction, is that the common-law liability of the carrier ends when the goods reach their destination and the consignee has had a reasonable time, after notice, to accept them and fails to do so or refuses to accept them, and that thereupon the liability of the carrier as a warehouseman commences, and that no duty devolves upon the carrier, as matter of law, to notify the consignor, at least where the consignee appears presumptively to be the owner, of the refusal of the consignee to accept the goods unless in the circumstances of the particular case reasonable care requires it. (Weed v. Barney, 45 N. Y. 344; Bacharach v. Lehigh Valley R. R. Co., 143 App. Div. 117; Manhattan Shoe Co. v. C., B. & Q. R. R. Co., 9 id. 172; Fenner v. Buffalo & State Line R. R. Co., 44 N. Y. 505.) In the case at bar it appears that the consignor had been notified by the consignee before he shipped the goods that they would not be accepted and that they would be left at the railroad depot at destination. There is no express provision, at least of the Interstate Commerce Act, requiring notice to the consignor of the refusal of the consignee to accept the goods, and it was held in Adams Express Co. v. Croninger (supra) that the Federal statutory liability, “aside from responsibility for the default of a connecting carrier in the route, is not beyond the liability imposed by the common law as that body of law applicable to carriers has been interpreted” by the Federal courts as well as the courts of the States; and there is no decision of the Federal courts, to which our attention has been drawn or which we have been able to find, holding that such duty is imposed by the Federal statute. Assuming, however, for the purposes of the appeal, but without deciding the point, that it was the duty of the final carrier to notify the shipper of the refusal ' of the consignee to accept the consignment, and that the defendant would be liable for the failure of the final carrier to perform such duty, still the liability cannot be predicated on that ground here, for no damages are shown to have resulted therefrom, which is essential to warrant a recovery on the statutory liability. (See Earnest v. D., L. & W. R. R. Co., supra.) It appears that the consignee was duly notified and refused to accept the shipment, and that the goods were safely and properly stored or kept by the final carrier, and that the consignor was notified by the consignee that it had refused to accept the goods, and so informed the duly authorized agent in New York of the final carrier, and requested that the goods be returned in ample time, if the request had been honored, to avert any loss or damages in the premises. On the uncontroverted evidence the loss was due to the failure of the consignor to demand delivery of the goods to himself and to take charge of them at the point of destination, on the refusal of the consignee to accept them, as was his duty (See Norfolk & W. R. Co. v. Stuart Draft Co., supra), or to the failure of the final carrier, which was then acting as warehouseman, to comply with the instructions timely given by the consignor for the return of the goods to him. It may be that the defendant remained liable for the acts and omissions of the final carrier as warehouseman with respect to keeping the goods safely and would have been liable for failure to deliver the goods to the consignor or to his order at destination on the failure of the consignee to accept them, but we are- not called upon to decide that question now for the reason that there is no evidence of the breach of any duty on the part of the final carrier, either with respect to storage, preservation or delivery at the point of destination. The only arguable theory is that defendant is liable for its own failure or the failure of the final carrier to return the goods when requested. But the defendant was under no obligation imposed by the common law or arising from the bill of lading it issued, or by virtue of the Federal statute, to return the goods in the event that the consignee refused to accept them. The obligation to return arose solely from the new contract negotiated after the consignee refused to accept the goods. The defendant cannot, in the circumstances, in my opinion, be held liable without so extending the liability of initial carriers as to render them responsible for failure of final carriers to perform any new contract negotiated between the shipper and them after the arrival of the goods at destination; and the theory on which the constitutionality of the law, in so far as it makes connecting carriers the agents of the initial carriers, has been sustained, does not, I think, so extend the construction as to make the connecting carriers the agents of the initial carriers in everything that they may do at any time with respect to the property, but only for the purpose of enabling the shipper to obtain redress from the initial carrier for any breach of the original contract of shipment regarded as a through contract. (See Atlantic Coast Line v. Riverside Mills, supra.) The only liability of the defendant was under the express and implied provisions of the bill of lading issued by it construed in the light of the Interstate Commerce Act; and it has not yet been held that such liability extends to a breach of duty or to a contract arising under subsequent negotiation between the shipper and final carrier for the further transportation of the property, whether to the point of original destination or to another point. (Gulf, Colorado & Santa Fé R. Co. v. Texas, supra; Howatt v. Barrett, supra; Sheehy v. Wabash R. Co., 169 Mich. 604; Ross v. Maine Central R. Co., 90 Atl. Rep. 711. See, also, Norfolk & W. R. Co. v. Stuart Draft Co., supra.) In Norfolk & W. R. Co. v. Stuart Draft Co. (supra), decided by the Supreme Court of Appeals of Virginia in 1909, it was held, construing the Carmack Amendment, that the liability of the initial carrier ends when the liability of the final carrier as a warehouseman commences; and that the initial carrier was not liable for damages resulting from the negligence of the final carrier while acting as a warehouseman after the refusal of the consignee to accept the goods; but that question is not now presented for decision and we express no opinion thereon. In Coovert v. Spokane, P. & S. Ry. Co. (supra), which was decided in 1914, it was held that the initial carrier was liable for a wrongful delivery by the final carrier to the consignee without requiring the production of the bill of lading, after the consignee had returned the bill of lading to the consignor, at the same time notifying him that the goods would not he accepted, and after the consignor had surrendered the bill of lading to the initial carrier which had agreed to have the goods returned, and had duly notified the final carrier to return them. But that was a case of liability arising out of a wrongful delivery, which may be said to he within the express provisions of the Federal statutes, as will he seen presently, and is not, I think, authority for the contention that the initial carrier is liable for all acts of negligence on the part of the final carrier while acting as warehouseman. It is quite clear, I think, that there was no loss from “damage or injury” to the goods caused by the final carrier within the provisions of section 20 of the Interstate Commerce Act (24 U. S. Stat. at Large, 386, § 20, as amd. by 34 id. 593, 595, § 7) known as the Carmack Amendment to the Hepburn Bill, which imposes liability on the initial carrier for such damages; nor is the respondent aided by the definition in section 1 of the Interstate Commerce Act (24 U. S. Stat. at Large, 379, § 1, as amd. by 34 id. 584, § 1, and 36 id. 544, 545, § 7) of the word “ transportation ” as used in section 20 thereof whereby it is declared, among other things, that “transportation ” includes “ all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported.” The plaintiff was aware that the consignment had not been delivered and that it was held by the railroad company in ample time for him to arrange, in the exercise of due diligence, to have it delivered to him at the point of destination, or returned to him before he would lose the benefit of his market or sustain any loss. There was no breach of the defendant’s contract to transport the property and to tender the delivery thereof, and, in the event of the refusal of the consignee to accept it, to have it held or stored by the final carrier subject to the order of the shipper. There is no evidence that the market value of the goods had depreciated at the time plaintiff received notice that the consignee had refused to accept them, and that they were at the railroad depot and in possession of the final carrier, or for a long time thereafter. I am unable to agree with Mr. Justice Hotchkiss that the loss was caused by erroneous information with respect to delivery to the consignee imparted to the plaintiff by the agent of the final carrier, and I express no opinion with respect to the liability of the defendant for such misinformation if damages resulted therefrom. As already observed, the damages resulted from the failure of the final carrier to return the property as requested by the shipper, who accepted the suggestion of the defendant’s agent and took upon himself the negotiations with the agent of the final carrier for the return of the consignment, and for that breach of duty, which is the only theory on which liability could in any view of the case be predicated, the initial carrier is not responsible.

I am, therefore, of opinion that the learned Appellate Term erred in reversing the judgment of the Municipal Court (See 85 Mise. Eep. 42), and its determination is reversed, with costs, and the judgment of the Municipal Court affirmed, with costs

Clarke, Scott and Dowling, JJ., concurred; Hotchkiss, J., dissented.

Hotchkiss, J. (dissenting):

On February 8,1912, plaintiff delivered to the defendant in New York city a case of merchandise consisting of dresses or gowns consigned to the People’s Store at Coffeyville, Kans., the shipment being routed over the Santa Fe railroad. It was conceded on the trial that, the goods arrived at their destination within a reasonable time; that the consignee was promptly notified of their arrival; that the consignee in due time notified the agent of the Santa Fe that it refused to accept the shipment, and that notice of this fact was not given to plaintiff until as hereinafter stated.

On or about April twenty-fourth plaintiff received a letter from the consignee saying that it refused to accept the goods. On April twenty-sixth plaintiff showed this letter to defendant’s agent in New York city, and in reply to his query as to what he should do to get his goods back “ by the next express,” plaintiff was told to sign a return order. Having signed such an order, plaintiff was informed by the agent that defendant would have to communicate with its agent in Chicago who in turn would take the matter up with the Santa Fe agent at Coffeyville, and that it would probably take a week or more to get the goods back, but that if plaintiff would go to the office of the Santa Fe in New York city, he would find it had a direct wire to Coffeyville and could get the shipment back in three days. On this suggestion, plaintiff went to the office of the Santa Fe and explained the situation, saying at the same time that if he could get the goods back in three days he could sell them for their full value, but otherwise the season for their sale would be lost. The agent of the Santa Fe agreed to telegraph to Coffeyville and ascertain whether the goods were still in possession of his company, and if so, he promised to have them returned at once by express. On May third plaintiff was notified by the Santa Fe agent that the package had been delivered to the consignee on March 28, 1912. Having again communicated with the consignee plaintiff was told that the goods had not been accepted, of which fact plaintiff informed the Santa Fe agent and was again told that the goods had been delivered to the consignee on March twenty-eighth. Later the Santa Fe’s representatives discovered this was a mistake, and about May twentieth they informed plaintiff of their error, that the case had never been delivered and was still in their possession, and asked what disposition plaintiff wished made of it. Thereupon plaintiff declared that he had lost his market for a sale of the goods and demanded reparation from the Santa Fe. The goods were finally returned to plaintiff, but at his expense and were sold at a considerable loss, for which this action was brought.

The question whether the defendant or the Santa Fe were under any duty to promptly notify plaintiff that the consignee had refused to accept the goods is not, I think, in the case, because concededly plaintiff received notice from the consignee that the goods had been rejected, and up to April twenty-eighth, when he called on defendant and informed it of this fact, the goods had not depreciated in value and plaintiff had suffered no damage. The loss occurred thereafter and arose from the misinformation received by plaintiff from the Santa Fe on May third that the package had been delivered, and the subsequent failure of the Santa Fe to return the goods as directed. If defendant is under any liability, I see no reason for releasing it because of plaintiff’s negotiations with the Santa Fe. E the Santa Fe was defendant’s agent when it was first approached by plaintiff, it was as much defendant’s duty as it was the duty of the Santa Fe to inform plaintiff correctly as to whether the goods had or had not been delivered; and if they had not been, then to return the goods on plaintiff’s request — and for the performance of this duty, especially in the light of the fact that the plaintiff sought the Santa Fe at the defendant’s suggestion, plaintiff had the right to treat with the Santa Fe, because it was a matter directly concerned with its agency.

We are thus brought to the main question. Because of the exceptions in the bill of lading the defendant cannot be held for any loss unless it be under that part of section 20 of the Interstate Commerce Law known as the Carmack Amendment to the Hepburn Bill. (See 24 U. S. Stat. at Large, 386, § 20, as amd. by 34 id. 593, 595, § 7. See, also, 34 U. S. Stat. at Large, 838, Res. No. 47.) The defendant claims that the act was intended to apply only so long as the goods are en route and the duty of the carrier qua carrier continues; that where transportation has been completed to the ultimate point of delivery and notice of arrival has been given or the fact of arrival has been brought home to the consignee, the obligation of the initial carrier ceases and the act no longer applies. I think this is too narrow a construction and one in accord neither with the letter nor the spirit of the act. The reasons for the passage of the act were judicially noticed in Atlantic Coast Line v. Riverside Mills (219 U. S. 186, 200, 201), where it is said to have been the intention of Congress to give to the shipper the benefit of a through contract against the initial carrier and to relieve him in case of loss or damage from being compelled to go to some distant point and there inconveniently and expensively pursue his remedy against the carrier actually responsible for the injury. Speaking of its civil as distinguished from its penal provisions, Mr. Justice White writing for the court in New York, N. H. & H. Railroad v. Interstate Commerce Com. (200 U. S. 361, 391) said that the statute was remedial and is, therefore, entitled to receive that interpretation which reasonably accomplishes the great public purpose which it was enacted to subserve.” It is true it is commonly said that after goods have arrived at their destination and the consignee has had notice of their arrival and a reasonable opportunity to take the goods away, the responsibility of the carrier as such ceases and it becomes a warehouseman. But this, I take it, is an expression of the nature of the duty and obligation then resting upon the carrier and is not by any means intended as expressive of the view that the carrier is then relieved of all duties and obligations growing out of its original contract with the shipper. As was said in Becker v. Pennsylvania R. R. Co. (109 App. Div. 230, 234): “The common carrier, however, does not necessarily relieve himself from all liability by giving timely notice to the consignee of the arrival of the goods, even although he fails to remove them within a reasonable time.

‘ If the consignee neglect to accept or to receive the goods, the carrier is not thereby justified in abandoning them, or in negligently exposing them to injury. If they are not accepted and received when notice is given of their arrival, he may relieve himself from responsibility by placing the goods in a warehouse for and on account of the consignee, but so long as he has the custody, a duty devolves upon him to take care of the property and preserve it from injury.’ (Scheu v. Benedict, 116 N. Y. 513.) ” This duty does not arise out of any new agreement but is an implied obligation growing out of the original contract of carriage. (Chicago & Alton R. R. Co. v. Kirby, 225 U. S. 155; Great Western Ry. Co. v. Crouch, 3 Hurlst. & N. 183, 195; Metzenburg v. Highland Ry. Co., 7 Scotch Sess. Cas. [3d series (1869)] 919, 922.) As I have shown, the breach of duty in this case arose from the misinformation given by the Santa Fe concerning the fact of delivery, thus preventing plaintiff from securing a return of the goods in time to enable him to sell them fór a sum which then represented their value. Had the loss arisen with respect to some matter pertaining to the return of the goods as distinguished from their delivery, it might be plausibly urged that a new contract had attached to which the initial carrier for the original carriage was a stranger. But I can see no difference between the present case where the loss arose from misinformation given by the ultimate carrier concerning the fact of delivery and one where the loss arose out of its misdelivery or total failure to deliver. By its through bill of lading this defendant constituted the Sante Fe its agent “for all purposes of transportation and delivery ” and the case must be treated as though the ultimate point of destination was on defendant’s own line, and defendant’s obligations are the same as if the loss complained of had been occasioned by its negligence. (Galveston, H. & S. A. R. Co. v. Wallace, 223 U. S. 481, 491, 492.) In Nashville, C. & St. L. Ry. Co. v. Dreyfuss- Weil Co. (150 Ky. 333) it was held that where goods were shipped to the order of the shipper with instructions to notify another party on arrival, it was incumbent upon the company to notify the shippers on refusal of the person named in the bill of lading to be notified, to accept delivery, and that the initial carrier was liable under the act for the destruction of the goods while lying in the warehouse of the ultimate carrier, no such notice having been given. In that case the court, relying on the term “transportation,” as defined in section 1 of the act, said that it ‘ ‘ must be presumed to have been intended by Congress to go as far as Congress had power to regulate the subject, and to make the initial carrier liable for any loss of the property until its interstate shipment was completed.” Section 1 of the act says: “The term ‘transportation’ shall include * * * all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported.” (24 U. S. Stat. at Large, 379, § 1, as amd. by 34 id. 584, § 1, and 36 id. 544, 545, § 7.) I can conceive of no circumstances under which “ storage ” may become a part of the duty of a carrier by land while the goods are en route or before they have reached their final destination and the duty to deliver has attached. Undoubtedly, the Interstate Commerce Commission has jurisdiction to regulate storage charges of railroads amenable to the act. Their exercise of such jurisdiction is notorious. (See Wilson Produce Co. v. Penn. R. R. Co., 14 I. C. C. Rep. 170.) It seems to me clear, taking the above paragraph of section 1 as a whole, and having regard for the phrase “ storage, and handling of property transported,” and especially in view of the intent of Congress in passing the act, that the duties imposed by the act continue until every obligation assumed by or as a necessary incident to the contract of carriage has been fully performed. Nor do I find anything in section 20 to limit this result. By it the initial as well as the subsequent carrier is made liable “for any loss, damage, or injury to such property.” (See 24 U. S. Stat. at Large, 386, § 20, as amd. by 34 id. 593, 595, § 7.) This phrase is not necessarily confined to physical “ damage, or injury.” The words must have been used with regard for their effect on the value of shipments, which was the practical question involved, and the value of seasonable goods may as readily be diminished by their unlawful detention until the season has passed as by acts causing physical depreciation. In Coovert v. Spokane, P. & S. Ry. Co. (80 Wash. 87) the consignee had refused to accept the goods, whereupon the consignor surrendered the bill of lading to the initial carrier and ordered the return of the shipment, but the ultimate carrier thereafter delivered the goods to the consignee and they were lost to the consignor. It was held that the initial earner was liable under the act and could be held as for a conversion. This case goes further than it is necessary to go in the one under consideration because the loss arose from an act done after a return order had reached the ultimate carrier. If the case of Norfolk & W. Ry. Co. v. Stuart Draft Co. (109 Va. 184) is opposed to the foregoing views, I think it was not well decided and is opposed both to reason and authority.

I think the determination was right and should be affirmed.

Determination reversed, with costs, and judgment of Municipal Court affirmed, with costs. 
      
       See 34 U. S. Stat. at Large, 838, Res. No. 47.— [Rep.