Case ID: ad_142/html/0176-01.html
Source: Caselaw Access Project
Author: {"author": "Houghton, J;:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

E. S. Bramley, Respondent, v. The Ulster and Delaware Railroad Company, Appellant.
    Third Department,
    January 4, 1911.
    . Negotiable instruments — bill of lading — when- not prima facie proof that charges are prepaid — carrier —- lien for charges.
    A bill of lading which, in a space headed “ If charges are to be prepaid write or stamp here ‘ To be prepaid,' ” merely contains. the written word “ prepaid,” withoút stating amount paid, is not pi'ima facie proof that the cost of carriage .was prepaid.
    Hence, the transferee of such bill of lading is not entitled to replevy the merchandise from a connecting carrier in this State, which had no joint .agreement with the initial carrier, on its refusal to deliver the goods unless its own charges thereon were paid, without proof that the freight charges had been in fact , prepaid, the bill of lading being insufficient.
    The connecting carrier was bound to accept the goods and transfer them to the ' destination on its own road and, having done so, had alien thereon for the amount of its proper charges, unless they had in fact been paid to the initial carrier.
    
      While a hill of lading is in a sense a negotiable instrument, it is not of such character as to preclude, in the hands of a bona fide holder, all inquiries respecting its issue.
    Sewell, J., dissented. •
    ■Appeal by the defendant, The Ulster and Delaware Railroad Company, from a judgment of the Supreme Court .in favor of the plaintiff, entered in the office of the clerk of the county of Delaware on the 3d day of June, 1910, upon the decision of the court, rendered after a trial at the Delaware Trial Term, a jury having been waived.
    
      Amos Van Etten, for the appellant.
    
      A. G. Patterson, for the respondent.
   Houghton, J;:

• The Corn Products Refining Company delivered to the Chicago, Peoria and St. Louis Railway Company at -Granite City, 111., for shipment to Halcottsville, H. Y., which is located upon the line of the defendant’s railroad, a carload of glucose feed. A bill of lading was delivered describing the Corn Products Refining Company as both shipper and consignee, and indicating that the shipment was to be made, after leaving the road of the initial carrier, by the Michigan Central, Ontario and Western and the road of the defendant from Kingston, H.' Y. For some reason which does not appear, the car was diverted from this route and was delivered to the defendant railroad company by the Delaware and Hudson Company at Oneouta for transportation to its destination instead of by the Ontario and Western at Kingston. On the way bill delivered to the defendant by the Delaware and Hudson Company was a statement that a four-dollar freight bill remained unpaid. According to the published rates of the defendant it was entitled to thirty-six 'dollars for delivering the car from Oneonta to its destination. On arrival of the car at Halcottsville, the plaintiff presented to .the defendant the bill of lading which the Corn Products Refining Company had received from the initial carrier, duly indorsed to •himself, and for which he had paid the full market value of the consignment. On this bill of lading were spaces for filling in the class of freight shipped and the amount of charges prepaid, or the amount of charges prepaid on account, all of which spaces were blank. In the space headed “ If charges are to be prepaid, write or stamp here, To be Prepaid,’ ” was written the word “ Prepaid.” The defendant had no- knowledge of the contents of this bill of ■lading until after"it had transported the freight, and the plaintiff, when he purchased the bill of lading, had no knowledge that the defendant had received the car from the Delaware and Hudson Company, with directions to collect four dollars back charges. The plaintiff insisted that all freight charges had been prepaid, but the defendant refused to deliver until its own charges as well as the back charges were paid to it. The plaintiff declined to pay any part of either and replevined the property, and from a judgment rendered in his favor the defendant appeals.

In his complaint the plaintiff alleges that the freight charges had been fully prepaid, and this is denied by the defendant’s answer. The plaintiff insists that the defendant is bound "by the recitals of the bill of lading that the freight had been prepaid and that it had no lien for its own charges-in the absence of affirmative proof on its own part that full freight was not paid to the initial carrier.

We are of opinion the burden was upon the plaintiff to ¡Drove that the freight charges had been prepaid aiid' that the bill of lading was not prima facie proof of that fact.

It was apparent upon inspection that the bill of lading was incomplete. The class of freight was not enumerated nor was the amount prepaid specified. The. defendant had no agreement with the initial carrier for joint rates and such initial carrier had, therefore, no authority to make a contract in its behalf. All it could do, according to the terms of the hill of lading, and as matter of law, was to act as agent for the shipper for the transportation of the freight over other lines after it left its own. For some reason the car was diverted from the specified route, presumably by direction of the shipper or the initial carrier. The only knowledge the defendant had was from the waybill delivered to it by the Delaware and Hudson Company specifying that four dollars freight charges remained unpaid. It was the defendant’s duty as common earlier to accept' the freight and transport it to its destination on its own road. , Having done so it had a lien upon the property transported for the payment of its proper freight charges unless they had in fact been paid to the initial carrier. When the bill of lading was presented by the plaintiff to the defendant nothing appeared thereon from which the defendant could determine that such charges had been received by the initial carrier except the bare word “ Prepaid.” Assuming that the defendant could itself classify the freight as the initial carrier must have classified it, if the amount prepaid had appeared it no doubt could have ascertained from the printed rates whether the amount due it was included in such payment. The simple statement that the freight had been prepaid, made by the initial carrier, with whom, the defendant had no joint agreement, was not binding upon the defendant, and it was not concluded by such recital.

While a bill of lading is in a sense a negotiable instrument it is not of such a character as to preclude, in the hands of .a bona fide purchaser, all inquiries respecting its issue. In Missouri Pacific Railway v. McFadden (154 U. S. 155) its characteristics are defined as follows : “ ‘ A bill of lading is an instrument well known in commercial transactions, and its character and effect have been defined by judicial decisions. In the hands of the holder it is evidence of ownership, special or general, of the property mentioned in it, and of the right to receive said property at the place of delivery. notwithstanding it is designed' to pass .from hand to hand, with or without indorsement, and it is efficacious for its ordinary purposes in .the hands of the holder, it is not a'negotiable instrument or obligation in the sense that a bill of exchange or a promissory note is. Its transfer does not preclude, as in those cases, all inquiry into the transaction in which it originated, because it has come into the hands of persons who have innocently ¡mid value for it. The doctrine of bona fide purchasers only applies to it in a limited sense.’ ”

The defendant’s railroad does not extend to the borders of the State, and it had the right, and it was its duty, to charge its posted traffic rates. (New York Central & H. R. R. R. Co. v. Smith, 62 Misc. Rep. 526.) It was entitled to know from the bill of lading, or otherwise, before incurring any liability for' non delivery, what amount the initial carrier had collected from the shipper, so that it might determine not only whether its own charges were included..

but whether the published, rates had been' observed, for'the carrier’s lien .could be discharged only by the .payment of the established schedule rates. (Texas & Pacific Railway v. Mugg, 202 U.S. 242.) The plaintiff did not attempt to give the defendant any information on this subject when he demanded surrender of the freight without payment of charges, and gave no proof upon the trial that the freight liad in fact been paid.

: Whether the defendant would have been justified under the circumstances in refusing to deliver the goods without payment, of its charges, even, though the initial carrier had in fact received full payment, we do not now consider. So far as the present judgment is concerned we think it .was incumbent upon the plaintiff, and not upon the defendant, to prove that the full freight charges had been prepaid. , '

The judgment must be reversed and a new trial granted, with costs to the appellant to abide the event.- .

All concurred,' except Sewell, J., dissenting. .-

Judgment reversed and new trial granted, with costs to appellant to abide event.