Case ID: mo-app_147/html/0543-01.html
Source: Caselaw Access Project
Author: {"author": "REYNOLDS, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOSEPH SEIGFRIED et al., Respondents, v. THE CHICAGO, BURLINGTON and QUINCY RAILROAD COMPANY, Appellant.
    St. Louis Court of Appeals.
    Argued and Submitted March 3, 1910.
    Opinion Filed March 22, 1910.
    1. COMMON CARRIERS: Freight: Stoppage in Transit: Sufficiency of Evidence. In an action against a carrier for damages for delivering goods to the consignee after they had been stopped in transit by the shipper, evidence held to sustain a finding that the consignee was insolvent when the order to stop the shipment was given.
    
      2. -: -: -: Proof of Insolvency. Strict proof of insolvency is not essential to exercise the right of stoppage in transitu; “insolvency” In that sense meaning general inability to pay debts.
    3. -: -: -: Evidence: Similar Transaction. In an action against a carrier for damages for delivering goods to a consignee, after they had been ordered stopped while in transit by the Shipper, the exclusion of evidence tending to show that in previous transactions between the shipper and the consignee the latter had made prompt payment was not erroneous, since it had no tendency to show the shipper had knowledge of the consignee’s insolvency when the goods were sold.
    4. -: -: -: Knowledge of Consignee’s Insolvency. The right of stoppage in transitu does not exist even though the buyer is insolvent, if that fact was known to the seller at the time the sale was made.
    5. -: -: -: Estoppel to Deny Right. Where the carrier, on being told by the shipper that he feared the consignee’s insolvency, and on request to stop the goods in transit, promised to stop them upon the shipper surrendering the bill of lading with a signed order to stop the goods indorsed thereon, and afterwards told him that the goods had been stopped, it was estopped from thereafter denying the shipper’s right to stop the shipment on the ground of want of proof of insolvency, or of knowledge by the shipper thereof when he directed the goods to be stopped, for by these acts and declarations the carrier prevented the shipper from protecting himself in some other way, if the right of stoppage had been denied or the right to exercise it challenged.
    6. -: -: -: Liability for Mis-Delivery: Defenses. A carrier may show as a defense to an action for damages for delivering goods to the consignee, after they had been ordered stopped in transit by the shipper, that the goods had been delivered to the consignee ■ before it was notified to stop the shipment and before it had time to communicate with its agent at destination.
    7. -: -: -: Delivery to Carrier: Bill of Lading: Evidence. A bill of lading issued by a railroad company, returned to it on its demand when the shipper requested the goods to be stopped in transit, was prima facie evidence that the company had received the goods for shipment.
    Appeal from St. Louis City Circuit Court . — Hon. Geo. E. Williams, Judge.
    
      Affirmed.
    
      Robert & Robert and Wm. L. Rechtold for appellant.
    (1) The delivery of goods to a common carrier for transportation to the purchaser passes title to the latter and is equivalent to delivery to the purchaser, subject only to the right of stoppage in transitu. Seharff v. Meyer, 133 Mo. 428; Bank v. Smith, 107 Mo. App. 188; Cultivator Co. v. Railroad, 64 Mo. App. 306. (2) “Right of stoppage in transitu arises solely upon the insolvency of the buyer. ’ ’ 4 Elliott on Railroads, p. 2390; Hutchinson on Carriers, sec. 421; Heinz v Transfer Co., 82 Mo. 233; Smith Co. v. Railroad, 122 S. W. Rep. 342; Grocer Co. v. Railroad, 122 S. W. 10; Cultivator Co. v. Railroad, 64 Mo. App. 305; Scott Bros. v. Grimes D. G. Co., 48 Mo. App. 521; Estey v. Truxel, 25 Mo. App. 238; Armentrout v. Railroad, 1 Mo. App. 158. (3) Plaintiff’s petition is not based on defendant’s common law liability. The allegations of the petition as to negligence on the part of the defendant are not supported by proof. It was incumbent on plaintiff to prove the negligence alleged. Hasse v. Transportation Co., 122 S. W. Rep. 362; Clark v. Railroad, 122 S. W. Rep. 318; Milling Co. v. Transit Co., 122 Mo. 258; Whiting v. Railroad, 101 Mo. 631; Hurst v. Railroad, 117 Mo. App. 25; McCrary v. Railroad, 109 Mo. App. 567; Ryer v. Railroad, 54 N. T. Supp. 583, affirmed, 56 N. Y. Supp. 1083.
    
      J. Garter Garstens for respondents.
    (1) While the right of stoppage in transitu arises only upon the insolvency of the buyer. In order to exercise the right it is not necessary that the buyer should have been adjudicated a bankrupt, or made an assignment for the benefit of his creditors, (a) It is sufficient if bis conduct-in business affords tbe ordinary-evidences of insolvency.. Diem v. Koblitz, 49 Obio St. 41-51, 29 N. E. 1124; C. F. ex parte Oarnfortb, 4 eb., D. 108-122. An inability to pay avowed either in act or word. Burdict on Sales (Cases), 617; Durgy Cement, etc., v. O’Brien, 123 Mass. 13 ; Lee v. Kilburn, 3 Gray, (Mass.) 600; Thompson v. Thompson, 4 Cush. (Mass.) 134; Herrick v. Barst, 4 Hill N. Y. 650; Benedict v. Schaettle, 12 Obio. St. 515; Bloomingdale v. Railroad, 6 Lee (Tenn.) 616; 6 Am. and Eng. Rwy. Cases, 371; Gibson v. Carruthers, 8 M. and W. 329; Mills v. Ball, 2 B. and P. 457; Bailey v. Schofield, 1 M. and S. 338; James v. Griffen, 2 M. and W. 622; Parker v. Gassage, 2 C. M. and R. 617; Hayes v. Mouillee, 14 Penn. 48; Nelson v. Dernie, 8 Pick. Mass. 206 ,- Reynolds v. Railroad, 43 N. H. 580. (b) Although tbe buyer has not actually failed nor bad bis paper protested, still, if bis conduct in business affords tbe ordinary evidence of insolvency, that is sufficient to justify tbe stoppage of tbe goods in transitu. Burdict on Sales (2 Ed.), sec. 391, p. 237. (c) Well-founded information of tbe embarrassment of tbe buyer is sufficient to warrant tbe seller to stop tbe goods in transit. Moore v. Lot, 13 Fev. 383; Secomb v. Futt, 414 B. Mon.. (Ky.) 261. (d) It is tbe duty of tbe carrier to act upon tbe demands of the vendor (and bis assertion that tbe buyer is insolvent) and to yield to tbe demand. 4 Elliott on Railroads, p. 2390, secs. 15-39; Jeffries v. Railroad (Wis.), 67 N. W. R. 424; 12 Natl. Corp. R. 691; In re Pray, 27 Fed. Rep-. 474; The Tigres Browning and L. 38. (2) Allegations of negligence in petition are mere sur-plusage. Tbe cause of action was complete when it stated tbe demand of stoppage, tbe agreement of tbe carrier to stop, its failure to stop, and tbe loss of tbe purchase price. Besides, tbe action originated in a justice court, where no formal pleadings are required. (3) Tbe objection that tbe consignee was not insolvent at tbe time tbe stoppage was ordered can only be taken by the buyer, and not by the carrier, except the carrier may show as a matter of defense that the vendor conld have collected his money. Blooming-dale v. Railroad, 6 Lee (Tenn.) 616; 6 Am. and Eng. Ry. Cases, 371; 5 Wait’s Action & D., p. 614. (4) It is prudent for the carrier to hold the goods till the validity of claim is established. Bohllingt v. Inglis, 3 East 381; Sneyds v. Hay, 4 J. R. 260; Snee v. Prescat, 1 Atk. 250; Reynolds v. Boston, etc., R. R., 591; Chandler v. Fhlton, 10 Texas 2; B. Y. Mass., 5 Whar. 189; Rucker v. Donovan, 13 Kas. 251; Newhall v. Vargas, 13 Me. 93; Mottram v. Heyer, 5 Denio 629; Bierce v. Hotel Co., 31 Cal. 160.
    StatesmbNT. — This action was commenced before a justice of the peace in the city of St. Louis, and from a judgment therein rendered in favor of plaintiffs, defendant appealed to the circuit court, where the trial was had before the court, a jury being, waived. The statement on which the case was tried sets out that on the 4th of March, 1907, plaintiffs shipped to one Sehleeter, at Rock Island, Illinois, a certain box of merchandise by and through the defendant corporation; that on the 5th of March, plaintiffs notified the defendant to stop said shipment “which the defendant, through its agents and servants, represented it had done immediately upon the notification of the plaintiffs to the defendant, ’ ’ but that the defendant had failed to hold the merchandise and had carelessly and negligently delivered it and permitted it to leave its care and custody and go beyond its control, to plaintiffs’ damage in the value of the merchandise ($150.55), for which and costs they prayed judgment. A ec-ompanying the statement was the itemized account. There was no paper pleading by defendant-
    At the trial before the circuit court, it appeared that on the 3d of March, 1907, Sehleeter had bought the bill of goods of the plaintiffs, the testimony being that tlie reasonable value thereof was as set out in the account filed. On the 4th of March the goods were delivered by plaintiffs to the defendant, through the St. Louis Transfer Company, - for transportation to Schlecter, at Rock Island, they having left the warehouse of plaintiffs between three and four o ’clock of the afternoon of that date. About two o’clock on the afternoon of the fifth of March, the plaintiffs received a report from the Dun Mercantile Agency as follows:
    “Schlecter, M. Clo. Shoes, etc. Rock Island, Rock Island Co., HI. February 26, 1907. Store closed about one week ago and understood to have moved stock to Peoria, IL1. 2928919079 J. L. R. —;— to N'. Q. 6409 — 2770-4408—2765—
    R. GL Dun & Co.”
    Upon receiving this, a member of the firm of plaintiffs and hereafter referred to for brevity as plaintiff, went to the St. Louis Transfer Company’s office to inquire whether the shipment was still in possession of that company. Not finding it there, he went directly to the freight office of the defendant and told the agent in charge that he would like to have the goods stopped. The agent asked him for what reason. Plaintiff showed him the above report from Dun’s Agency, and stated that to his knowledge the man wanted to swindle them out of the goods. The agent said, “All right,” that he would stop the goods for them, and asked plaintiff whether he had the bill of lading, and told him to produce it to him, saying that it was absolutely necessary that plaintiffs should give up the original bill of lading to him, whereupon plaintiff delivered the bill of lading to the agent of defendant, and at the direction of that agent, wrote a notation on it to the effect, “We hereby ask you to stop these goods,” signing this in the firm name. That was about half past three- or four o ’clock •of the afternoon of March 5th. About five o’clock, wanting to be sure that the goods would be stopped, this partner went again to the railroad agent, who showed him a duplicate of a telegram to the agent of the defendant company at Rock Island, Illinois, in which the agent of the defendant here had requested the agent of the defendant at Rock Island to stop the goods sent to Schlecter from plaintiffs. On that same day, the 5th, plaintiffs wrote to Schlecter at Rock Island, Illinois, a letter as follows:
    “St. Louis, Mo., March 5, 1907.
    ‘ ‘ Mr. M. Schlecter, Rock Island, Ills.
    “Dear Sir: You no doubt have received our bill for the goods by this time, but it was reported to us from the agencies that your store is already closed up a week and your stock moved to Peoria, Ills., and this certainly is a puzzle to us, as we cannot understand when you move your stock to Peoria, why you wish to have the goods shipped to Rock Island, and under the circumstances we have no other way but to stop the goods, as we don’t know what is what, and you cannot blame us for our actions. Now, Mr. Schlecter, although the bill is marked net 30 days, as those are jobs, and same were sold to you almost below cost, yet if you wish to have those goods, you may send us a St. Louis or Chicago draft, and take 5 per cent. The amount is $150.55 and 5 per cent would be $7.52, and the net amount would be $143.03, and this is a big inducement. Please let us hear from you by return mail, as this is rather important.
    “Yours very truly,
    “Seigfried & Rosenberg.”
    There was testimony on the part of plaintiffs that they had never received the goods back and that they had since learned that the goods had been delivered to Schlecter and they had never received any money for them. On cross-examination, the witnesses testified that they had sold Schlecter before and that he had made prompt payments for the goods that had been sold him. On objection and motion of plaintiffs this last answer was stricken out as immaterial, defendant saving its exception. This was all the evidence in the case. No declarations of law were asked or given. The conrt fonnd in favor of plaintiffs and entered up judgment in their favor for $158.15 and costs. Defendant in due time filed its motion for a new trial which being overruled, exception was saved and an appeal duly-perfected to this court.
   REYNOLDS, P. J.

(after stating the facts).— The assignments of error may be. summarized to be that there was no evidence showing the insolvency of the consignee and that without insolvency there is no right of stoppage in transit, it being also assigned as error that the court had excluded competent and relevant testimony to show that plaintiffs had no knowledge that the consignee was insolvent when they attempted to stop the shipment, and that there was no evidence tending to show that the defendant received for transportation the goods claimed to be lost. None of these assignments are maintainable.

Counsel on each side concede that the right of stoppage in transit must depend, among other facts, on the fact of the insolvency of the consignee. The report from the Dun Agency, the fact that on the very day Schlecter bought the goods, he no longer had his store at Rock Island, but had removed from there to Peoria about a week before; that he made no answer to the letter of March 5th from plaintiffs to him, and that the goods, although delivered, had not been paid for down to the institution of this suit before the justice, which was about April 9, 1908, over thirteen months after they had been bought, are all circumstances from which the court had a right to draw the conclusion that the consignee was insolvent when the order to stop the shipment was given.

Mr. Elliott, in his work on railroads, vol. 4 (2 Éd.), sec. 1539, states the conclusion of the authorities on the right of stoppage in transit, to be that the right “does not exist, even though the buyer is insolvent, if that fact was known to the seller at the time the sale was made.” He refers to the ease of Jeffries v. Fitchburg’ Railroad Co., 93 Wis 250, as instructive authority on this proposition of insolvency. Referring to that case, at page 256, it is stated: “Strict proof of insolvency is not required in order to justify the exercise of the right of stoppage in transitu. ‘By the word “insolvency” is meant a general inability to pay one’s debts; and of this inability the failure to pay one just and admitted debt would probably be sufficient evidence.’ [Benj., Sales, sec. 837; Smith, Merc. Law, 550, and note.] It had failed to pay the just and undisputed debts it had owed to the plaintiff and to the defendant for over ten months. Inquiry made at the former place of business of the debtor elicited the information that there was no such concern; . . . and the fact that the witness, . . . connected with it during its corporate existence and having some knowledge of its business, called to show that the right of stoppage had been terminated by delivery to the company or its agent, was not interrogated as to its solvency, is quite suggestive, in view of the facts in evidence, when fairly satisfactory proof of its solvency would have been fatal to the plaintiff’s action. The evidence constitutes sufficient prima facie proof of insolvency to sustain the finding. There was no attempt made to dispute this evidence or to rebut it. "We must hold that the evidence was sufficient to warrant the finding. ’ ’

It seems to us that the facts in the case at bar are sufficiently near to those in the Jeffries case to apply the rule there laid down in this case.

We are unable to understand what the assignment, that the court erred in excluding competent and relevant testimony to show that plaintiffs had no knowledge that the consignee was insolvent, refers to. The only evidence that was excluded was that offered by defendant in cross-examination of one of the plaintiffs, in which defendant under to oh to show previous transactions between plaintiffs and Schlecter. If the evidence had tended to show knowledge on the part of plaintiffs of the insolvency when the goods were sold, it would have been relevant, as before stated. But the effort was to show solvency. It was properly excluded. This is all of the evidence on that line that appears from the record to have been offered.

Furthermore the judgment can be sustained on the ground that the defendant is estopped from invoking the law applicable to the right of stoppage in transit which exists as between the consignor and the consignee. When one of the plaintiffs went to the agent of defendant and notified them of his suspicions and fears, those agents not only told him that they would stop the goods but that they had done so, and insisted upon his delivering over to them the hill of lading which he had in his possession, and on plaintiff’s endorsing on.it over the signature of plaintiffs, the order to stop- delivery. In the light of this, defendant is certainly estopped from now denying the right of plaintiffs to stop the shipment, either because there was no proof of insolvency or knowledge on the part of plaintiffs at the time of the fact of insolvency was lacking, for by these acts and declarations of its agents, defendant prevented plaintiffs from protecting themselves in some other way, if the right of stoppage had been denied or the right to exercise it challenged. It was open to defendant to have shown that before notification by the plaintiffs and before communicating with the agent of the defendant at Rock Island, delivery had been made to the consignee. It did not choose to introduce any such evidence, if there was any to that effect, and it stands here without any substantial defense to the plaintiffs’ claim.

‘As to the point made that there was no proof of delivery of the goods to defendant, the bill of lading turned over by plaintiffs to defendant and at its demand was most surely prima facie evidence that defendant had received the goods for transportation.

The judgment of the circuit court is affirmed.

All concur.