# Constable v. National Steamship Company/Dissent Jackson

* Court Documents
* Case Syllabus
* Opinion of the Court
* Dissenting Opinion Jackson
United States Supreme Court
154 U.S. 51
Constable v. National Steamship Company
Mr. Justice JACKSON (with whom concurred Mr. Justice FIELD and Mr. Justice GRAY), dissenting.
I dissent from the judgment and opinion of the court in this case.
The liability of the respondent is not relieved by the provisions of section 4282 of the Revised Statutes re-enacting the first section of the act of congress of March 3, 1851, as the fire by which the goods were destroyed did not happen 'to or on board the vessel.' Morewood v. Pollok, 1 El. & Bl. 743; Manufacturing Co. v. The Tangier, 21 Law Rep. 6, Fed. Cas. No. 12,265. Nor is the question of the carrier's liability for loss of the goods controlled by any supposed policy of that enactment.
The National Steamship Company, by the contract of affreightment embodied in the bill of lading, undertook, not merely to carry, but to deliver, the 36 cases of merchandise in question at the port of New York unto the libelants, in like good order and condition as received, subject to certain exceptions and conditions designed to lessen or limit its liability and modify its duty as a common carrier.
The goods were not delivered, either actually or constructively, to the consignees, but were destroyed by fire while still in the custody and possession of the steamship company as carrier, after being landed and deposited on the Inman pier, No. 36, under a special order or permit which the steamship company applied for and obtained from the collector of the port, allowing the goods to remain upon the wharf for 48 hours from the time of granting the general order to discharge.
The steamship company, as a common carrier, is, upon well-settled principles, responsible for this loss, unless it is relieved from liability by some special exception or express stipulation in the bill of lading, or by reason of some established or known usage at the port of New York.
The conditions and provisions contained in the bill of lading, so far as the same are material to the present controversy, are as follows:
(1) 'Fire before loading in the ship or after unloading.' (2) 'The National Steamship Company or its agents or any of its servants are not to be liable for any damage to any goods which is capable of being covered by insurance.'
(3) 'The goods to be taken from alongside by the consignee immediately the vessel is ready to discharge, or otherwise they will be landed by the master, and deposited at the expense of the consignee, and at his risk of fire, loss, or injury, in the warehouse provided for that purpose, or in the public store, as the collector of the port of New York shall direct, and, when deposited in the warehouse or store, to be subject to storage, the collector of the port being hereby authorized to grant a general order for discharge immediately after entry of the ship.'
(4) 'The United States treasury having given permission for goods to remain forty-eight hours on wharf at New York, any goods so left by consignee will be at his of their risk of fire, loss, or injury.'
These provisions of the affreightment contract, modifying and qualifying the carrier's common-law liability, must, in accordance with the well-settled rule, be construed strictly. Their meaning is not to be extended by presumption so as to give the carrier protection beyond what has been stipulated for in clear and unmistakable terms. In so far as they are ambiguous or leave the intention of the parties in doubt, they are to be construed against the steamship company. Edsall v. Transportation Co., 50 N. Y. 661; Taylor v. Steam Co., L. R. 9 Q. B. 546; Bish. Cont. 411; Carv. Carr. by Sea, § 77.
Now, subjecting the terms and stipulations of the bill of lading to the test of this established rule of construction, did they clearly and expressly confer upon the steamship company the right to discharge and deposit the goods upon the Inman wharf at the risk of the consignees, without previous notice to them, or any knowledge on their part, as to when and where the steamer would be docked and its cargo landed?
It is settled by the authorities that it is the duty of the carrier, unless specially relieved from so doing by the contract of affreightment, to give due and reasonable notice to the consignee of the time and place of discharging the goods, and to properly separate the different consignments, so as to afford the consignee a fair opportunity to remove the goods, or to put them under proper care and custody.
In The Eddy, 5 Wall. 481, 495, the general rule is thus stated by this court: 'Delivery on the wharf, in the case of goods transported by ships, is sufficient under our law, if due notice be given to the consignees, and the different consignments be properly separated so as to be open to inspection, and conveniently accessible to their respective owners. Where the contract is to carry by water from port to port, an actual delivery of the goods into the possession of the owner or consignee, or at his warehouse, is not required in order to discharge the carrier from his liability. He may deliver them on the wharf; but, to constitute a valid delivery there, the master should give due and reasonable notice to the consignee, so as to afford him a fair opportunity to remove the goods or put them under proper care and custody. When the goods, after being so discharged, and the different consignments properly separated, are not accepted by the consignee or owner of the cargo, the carrier should not leave them exposed on the wharf, but should store them in a place of safety, notifying the consignee or owner that they are so stored, subject to the lien of the ship for the freight and charges, and, when he has done so, he is no longer liable on his contract of affreightment.' This statement of the law is reaffirmed in Ex parte Easton, 95 U.S. 68, 75, and is fully supported by the authorities both in this country and in England.
Thus, in McAndrew v. Whitlock, 52 N. Y. 40, it was held that a carrier of goods by water may land them at a wharf at the port of destination, but not until after he has given the consignee due notice of their arrival and unlading, and afforded him a reasonable time to take charge of and secure them. In the meantime, instead of leaving them on the wharf, it is his duty to take care of them for the owners. See, also, to the same effect, Zinn v. Steamboat Co., 49 N. Y. 442; The Mary Washington, Chase, 125, Fed. Cas. No. 9,229; The Santee, 7 Blatchf. 186, Fed. Cas. No. 12,330; Kohn v. Packard, 3 La. 224; The Tybee, 1 Woods, 358, 361, Fed. Cas. No. 14,304; Ang. Carr. § 310; and Redf. Carr. § 129.
In the present case, as shown by the seventeenth and eighteenth findings of fact, the carrier did not comply with the requirement of the law in giving notice of the time and place the steamer would discharge her cargo, nor did the consignees have any knowledge either of the vessel's readiness to discharge or that their merchandise would be, or had been, landed and deposited upon the Inman dock; and the question is whether the special conditions and stipulations of the bill of lading were intended to dispense with such notice, or can be reasonably construed to mean that the carrier was authorized to deposit the goods on the wharf at the risk of the consignees without giving them previous notice, and a reasonable opportunity to take charge of the same.
The only clauses of the bill of lading bearing upon this question are the first, third, and fourth, as above quoted.
The exemption from liability for loss by 'fire after unloading' does not, by its terms, confer any authority to deposit the goods upon the wharf without notice to, and at the risk of, the consignees. The words, 'fire after unloading,' must receive a reasonable construction. They manifestly do not confer upon the carrier an unqualified discretion as to when and where the cargo may be unloaded. The steamship company could not, for instance, under that provision of the bill of lading, have discharged the goods of the consignee at Brooklyn or Jersey City, and claimed exemption from liability in the event of their destruction by fire while so landed. The clause clearly contemplates, and should be confined to, a lawful unloading, made in the proper execution of the contract to deliver,-such an unloading as will conform to the law or usage of the port of destination, or to the special contract of the parties. The generality of its language in this case is to be restricted and interpreted by the subsequent and more particular provision found in the third of the above clauses, directing the disposition to be made of the goods if the same are not taken from alongside of the vessel when it is ready to discharge. These clauses do not operate to limit the carrier's duty and obligation, as prescribed by law, beyond what is clearly expressed in the terms thereof, or may be fairly implied therefrom. They do not, either singly or collectively, relieve the carrier from its duty to notify the consignees of the time and place of discharging the merchandise, nor do they authorize the carrier to deposit the goods on the wharf at the risk of the consignees without such notice.
In The Santee, 7 Blatchf. 186, Fed. Cas. No. 12,330, the bill of lading contained the special clause that the articles named therein should be at the risk of the consignee or owner thereof, as soon as delivered from the tackles of the steamer at her port of destination, and that they should be received by the consignee, package by package, as so delivered. If not taken away the same day, they might be sent to a store or permitted to lie where landed, at the expense and risk of the owner or consignee. It was held by the court that, notwithstanding such special contract, it was the duty of the carrier to give reasonable notice to the consignees of the arrival and discharge of the vessel, so as to enable them to attend and receive the goods, and themselves assume and exercise that care and responsibility of which the carrier was to be relieved. The same rule is laid down in Collins v. Burns, 63 N. Y. 1; Tarbell v. Shipping Co., 110 N. Y. 170, 7 N. E. 721; and Wheel. Carr. 333.
In Tarbell v. Shipping Co., 110 N. Y. 170, 180, 7 N. E. 721, the bill of lading on merchandise from a foreign port contained the provision that the goods were to be delivered from the ship's deck (when the ship owner's responsibility should cease) at the port of New York, and 'were to be received by the consignees immediately the vessel is ready to discharge, or otherwise they will be landed and stored, at the sole expense and risk of the consignees, in the warehouses provided for that purpose, or in the public store, as the collector of the port of New York shall direct.' The court of appeals of New York held that the carrier must, if practicable, give notice to the consignee of the arrival of the goods, and that when this had been done, and the goods had been discharged in the usual and proper place, and reasonable opportunity afforded to the consignee to remove them, the liability of the carrier as such would terminate; and in respect to the clauses in question the court said: 'The general duty of a carrier to deliver, and of a consignee to receive, as defined in the authorities to which we have referred, is not, we think, essentially changed by the clause in the bill of lading that the goods are to be delivered from the ship's deck (when the ship owner's responsibility shall cease), or by the clause that the goods are to be received by the consignee 'immediately the vessel is ready to discharge."
The position taken in the opinion of the court-that the clauses in the bill of lading under consideration are inconsistent with the idea of personal notice to the consignees-is not supported by the authorities, but is in direct conflict therewith.
The case of Gleadell v. Thompson, 56 N. Y. 194, cited in the opinion, is, when analyzed, essentially different from the case at bar. In that case the bill of lading contained the provision that the goods should be taken from alongside by the consignees 'immediately the vessel is ready to discharge, or otherwise the privilege is reserved to the vessl to land them on the pier, or put them into craft, or deposit them in the warehouse designated by the collector of the port of New York, all at the expense of the consignee, and at his risk of fire, loss, or injury.' It was held by the court that it was not incumbent on the carrier to give notice of readiness to discharge the goods as a conzdition of his exercising the privilege of depositing them upon the pier, and that while so deposited they were, by the terms of the contract, at the consignee's risk of fire, loss, or injury.
This decision means nothing more than that, under the alternative privilege reserved to the vessel, the carrier had the right to land the goods on the pier at the consignees' expense and risk of fire, loss, or injury, without giving the consignees previous notice or opportunity to take the goods from alongside the ship. The bill of lading in the case at bar contains no stipulation reserving to the vessel the privilege of landing the goods on the pier at the expense and risk of the consignees, as in Gleadell v. Thompson. The provision of the bill of lading in the present case is that the goods are to be taken from alongside by the consignees 'immediately the vessel is ready to discharge, or otherwise they will be landed by the master and deposited at the expense of the consignees, and at their risk of fire, loss, or injury, in the warehouse provided for that purpose, or in the public store, as the collector of the port of New York shall direct,' and, when deposited in the warehouse or store, to be subject to storage.
If the rule laid down in Gleadell v. Thompson is sound, and applicable to the case under consideration, then, upon its failure or neglect to give the consignees notice of the time and place of discharging the cargo, so as to enable them to take their goods from alongside the vessel, the steamship company was bound to land and deposit the goods in the warehouse provided for that purpose, or in a public store, as the collector of the port of New York might direct. If it failed to give the consignees proper notice and opportunity to take the goods from alongside when the vessel was ready to discharge, then the alternative obligation, by the express terms of the contract, was that the master of the steamer should land and deposit the goods in a warehouse or public store, as the collector might direct. No right whatever was reserved in this stipulation to deposit the merchandise upon the pier at the risk of the consignees. On the contrary, the express undertaking on the part of the carrier, by this provision of the contract, was that, if the goods were not taken from alongside, the master should land and deposit them in one or the other of the designated places.
The duty on the part of the consignees to take the goods from alongside the vessel necessarily depended upon their having notice of the time and place when and where the vessel would discharge her cargo, and be ready to make delivery. When, therefore, the carrier proceeded with the discharge without giving such notice, the alternative stipulation of the contract, as well as its legal obligation under the law, required that the goods should be 'landed and deposited' in the manner specified; and the fact that the place for depositing the consignment was specially designated and provided for in event it was not taken from alongside the vessel clearly negatives the right of the carrier to deposit it on the wharf at the risk of the consignees. If the steamship company had, without notice to the consignees, landed and deposited the goods in a bonded warehouse, or, as directed by the general order of the collector, in public store, 502-510 Washington street, then the case would have come within the rule laid down in Gleadell v. Thompson.
There is no finding of fact in this case supporting the suggestion that the 'warehouse' referred to in the third of the above-quoted clauses of the bill of lading was the covered pier or wharf on which the goods were landed. The word 'warehouse,' wherever used in the bill of lading, is coupled with the words 'public store,' and it is plainly evident that they have the same meaning. That these words are synonymous, and that 'warehouse,' when used alone, means a 'bonded warehouse,' clearly appears in the sections of the Revised Statutes relating to the collection of custom duties. Section 2954 et seq. That no different meaning is given to the word 'warehouse' when used in connection with the customs laws further appears from the definition given it in the standard dictionaries.
It appears by the sixteenth finding of fact that the respondent, on the afternoon of January 31, 1883, soon after the entry of the vessel, caused a notice of the time and place of discharge to be posted on a bulletin board in the customhouse; that it was usual to post such notice there, but that it was not usual to publish it in the newspapers; and the conclusion reached by this court is 'that, if any notice of such unloading was required at all, the bulletin posted in the customhouse was sufficient, under the practice and usage of the port of New York.'
This conclusion of the court cannot, for several reasons, be sustained. There is no finding of the court below of any practice or usage at the port of New York dispensing with personal notice to the consignees, nor that notice posted at the customhouse would, by any well-established or known usage, charge or affect the consignees with notice. The authorities clearly establish that notice such as that posted upon the bulletin board must be shown to have come to the actual knowledge of the consignees in order to bind them, or relieve the carrier from the duty of giving personal notice.
In The Middlesex, 21 Law Rep. 14, 15, Brunner, Col. Cas. 605, 606, Fed. Cas. No. 9,533, it was said by Curtis, J.: 'Mere knowledge that the vessel has arrived, and is discharging, at a particular wharf, gained in some casual manner by the consignee, without any act on the part of the master to indicate a readiness to deliver, is not within the usage, which is for the master, or some agent for the vessel, to give notice to the consignees. And I do not think such casual knowledge is sufficient to impose on the consignee the duty of attending to the discharge of the vessel, and being in readiness to receive his goods as soon as they are ready for delivery. * * * It must be remembered that it is not knowledge of the arrival of the vessel, and that she is discharging, but notice of the readiness of the master to deliver, which is the operative fact.'
In Kohn v. Packard, 3 La. 224, 229, the question whether notice of the arrival of a vessel published in the newspapers was binding upon the consignees was clearly and convincingly treated by Porter, J., who said: 'If we understand correctly the usage as proved in evidence, it is this: that notice in the newspapers of the time and place of the landing goods from a vessel is such notice as places the goods at the risk of the consignee; in other words, that constructive notice binds the party as effectually as personal notice would. If this be the custom, then it is one which this court is prepared to say it cannot sanction. Authorities have been read to show that the goods are to be delivered according to the usage of the port to which they are shipped. The principle may be admitted without at all affecting the conclusion to which we have come, for, though the custom may regulate the delivery, it cannot dispense with it. Such would be the effect, however, of the usage relied on, in numerous instances. We understand that it is of the essence of the contract of affreightment that there be an engagement to deliver the goods to the consignee. He consequently must be informed of the time and place the delivery is to be made, to enable him to receive them, and, if he has not that information, the other party to the contract cannot dissolve it. Yet the custom relied on assumes that he may; for if notice in the newspapers is to bind the consignee of the goods, though he never hears of it or sees it, and if such notice confers on the master of the vessel the right to land the goods on the levee, where they are destroyed or stolen, then it follows that the custom dispenses with delivery, or anything equivalent to it. This we think custom cannot do. There must be the act of both parties to terminate the contract, or the default of one of them to authorize the other to do so.'
In Parsons on Shipping (volume 1, p. 224) it is laid down as a general proposition that 'in all cases the master is required to give notice to the consignee of the arrival of the vessel, and of his readiness to discharge the cargo, and knowledge, therefore, acquired, that the vessel has arrived and will discharge her cargo at a particular wharf, is not enough. Generally, if a notice in the newspapers is relied on, it must be shown that the consignee read the notice.' This same rule is approved in Leggett on Bills of Lading, p. 279.
There is not only no finding by the court below that the deposit of the goods on the Inman pier, No. 36, without previous notice to the consignees, was in accordance with any general usage of the port of New York, but, on the contrary, the court found a state of facts which established a course of dealing between the parties inconsistent with any such usage.
Thus, by the nineteenth finding, it appears that during the five years preceding the consignment in question the libelants had received six consignments of merchandise in steamships belonging to the respondent, under bills of lading substantially in the same form as the bill of lading herein, all of which were landed and discharged on pier No. 39; that, during the same period, the freight bills for these six consignments were sent to the libelants, each containing a reference to that pier, and that pier only, as the pier of the respondent company where the goods would be found upon their arrival and discharge; that this was true of the consignment to the libelants in this case, the freight bill of which was the same in form as the preceding six, and which was not received by the libelants until February 1, 1883,-the day after the goods had been destroyed by fire.
'(20) That during the said five years preceding the time of the arrival of the steamship Egypt in this case, that being the period during which the libelants had been receiving goods by the respondent's line from time to time as aforesaid, there have been two hundred and forty-one arrivals of the respondent's steamships at said port of New York coming from said port of Liverpool, and in only eight instances does it appear that the said steamships, or any of them, discharged at any dock other than that known as the 'National Dock,' exclusively occupied and controlled by the respondent as aforesaid, and no evidence was offered with reference to the circumstances attending the discharge of said eight vessels. As to forty-one of said steamships, evidence of the place of their discharge was not produced.'
'(22) That, prior to the arrival and discharge of said steamship Egypt at said Inman dock as aforesaid, no steamship belonging to the respondent, from said port of Liverpool or elsewhere, had ever been discharged at said dock owned and controlled by the Inman Steamship Company, Limited, as aforesaid.
'(23) That said dock known as the 'National Dock,' being pier No. 39, North river, in the city of New York, is, and was at the time of the arrival of the steamship Egypt as aforesaid, the usual and a proper place at said port of New York for the discharge of cargoes coming from said port of Liverpool in steamships belonging to the respondent company, and is and was at such time a proper place at said port of New York for the discharge of the said thirty-six packages of merchandise belonging to the libelants, and destroyed as aforesaid.
'(24) That said dock known as the 'National Dock,' being said pier No. 39, North river, in the city of New York, was the dock and place ordinarily and generally, but not invariably, used at said port of New York for the discharge of cargoes coming from said port of Liverpool in steamships belonging to the respondent company.
'(25) That the National dock, being pier No. 39, North river, in said city of New York, is, and was at the time of the discharge of the steamship Egypt as aforesaid, the dock or wharf to which consignees of cargo coming from said port of Liverpool to said port of New York in steamships belonging to the respondent company would naturally and usually go for the purpose of caring for and receiving a delivery of their consignments.'
It is also admitted in the amended answer of the respondent that 'there is nothing in the bills of lading which led the libelants to believe that the goods in said bills of lading were not to be landed on said National dock (No. 39), and there delivered' to the libelants.
It is not set up or claimed in the answer of the respondent that in discharging and depositing the goods, without notice to the consignees, at a different pier from that at which it was in the habit of landing and delivering other consignments to the libelants, the carrier was acting in pursuance of any established custom or usage of the port of New York. No such justification is set up; on the contrary, the answer alleges that the consignees had due and proper notice that the goods would be landed or discharged at pier No. 36. It denied the libelants' allegation that they did not have notice that the goods were not to be landed and delivered at the National dock, No. 39, and averred that the libelants did have notice that the goods carried by the Egypt were to be landed at pier No. 36, at which they were actually landed. The seventeenth finding of fact contradicts this denial and averment of the answer.
The carrier having landed and deposited the goods, not at its usual and customary place of discharge, where the consignees would naturally expect to receive their consignment, as they had always previously done, and there being an implied undertaking on the part of the carriers to discharge at the usual wharf according to the established course of dealing between the parties, the duty of giving notice that the discharge and delivery of the goods would be made at another and different place became the more imperative upon the carrier.
In Story on Bailments (section 545) it is said: 'In America the rule adopted in regard to foreign voyages, although it has been matter of some controversy, seems to be that in such cases the carrier is not bound to make a personal delivery of the goods to the consignee, but it will be sufficient that he lands them at the usual wharf or proper place of landing, and gives due and reasonable notice thereof to the consignee. * * * But it is of the very essence of the rule that due and reasonable notice should be given to the consignee before or at the time of the landing, and that he should have a fair opportunity of providing suitable means to take care of the goods and to carry them away.'
So, in Addison on Contracts (section 961): 'If it is customary for the carrier by water to carry merely from port to port, or from wharf to wharf, and for the owner or consignee to fetch the goods from the vessel itself, or from the wharf, as soon as the arrival of the ship has been reported, the carrier must give such owner or consignee notice of the arrival of the goods on board, or at the customary place of destination, in order to discharge himself from further liability as a carrier. He cannot at once discharge himself from further liability by immediately landing the goods without any notice to the consignee, but is bound to keep the goods on board or on the wharf, at his own risk, for a reasonable time, to enable the consignee or his assigns to come and fetch them.'
The rule thus laid down is supported by Manufacturing Co. v. The Tangier, 21 Law Rep. 6, Fed. Cas. No. 12,265; Gibson v. Culver, 17 Wend. 305; 2 Kent, Comm. 604; Macl. Shipp. (4th Ed.) 453, 454; Hyde v. Navigation Co., 5 Term. R. 389; Gatliffe v. Bourne, 4 Bing. N. C. 314.
In Gatliffe v. Bourne, to a declaration on a contract by a master of a steam vessel to convey goods from Dublin to London, and to deliver the same at the port of London to the plaintiff or his assigns, a plea was filed to the effect that, after the arrival of the vessel at London, defendant caused the goods to be unshipped, and safely and securely landed and deposited in and upon a certain wharf, called 'Fenning's Wharf,' at the port of London, there to remain until they could be delivered to the plaintiff, said wharf being a place where goods from Dublin were customarily landed and deposited for the use of consignees, and a place fit and proper for such purposes; that while the goods were thus deposited upon said wharf, and before a reasonable time for delivery had elapsed, they were destroyed by an accidental fire. This plea was held to be bad, and the carrier was charged with the loss of the goods accidentally burned while deposited on the wharf. This decision was affirmed in the exchequer chamber (3 Man. & G. 643) and in the house of lords (11 Clark & F. 45, 7 Man. & G. 850, and 8 Scot. N. R. 604). In the report of the case before the house of lords it is stated that no notice was given to the plaintiff that the goods were landed upon the wharf.
This case, in principle, controls the present case, unless the special clauses of the bill of lading authorize the deposit of the goods upon the Inman wharf without notice to the consignees and at their risk. The provisions of the bill of lading already considered do not confer such authority, and, if it exists, it must be found in the remaining clause, viz.: 'The United States treasury having given permission for goods to remain forty-eight hours on wharf at New York, any goods so left by consignee will be at his or their risk of fire, loss, or injury.'
This is the only clause in the bill of lading which in any way refers to a deposit of the goods upon the wharf. The court, in its opinion, construes this language to mean: 'The United States treasury having given permission for goods to remain forty-eight hours on wharf at New York, any goods so remaining will be at the consignee's risk of fire, loss, or injury.' This construction not only gives no effect to the words 'left by the consignee,' but substitutes the act of the master for that of the consignee. It makes the master's act of depositing a leaving by the consignee. The words 'left by the consignee' clearly contemplate the voluntary leaving, not by the master, but by the consignee, which could only occur after due notice that the goods were so deposited, and a reasonable opportunity afforded for removing them. The words import a voluntary act of leaving on the part of the consignee; that is to say, the consignee must suffer or permit the goods to remain, or omit to remove them after it has become his or their duty so to do. The consignees' duty of positive and affirmative action is not called into exercise until after they have had notice that their goods will be or have been deposited on the wharf. Until such notice and an opportunity to take charge of the goods is given to the consignees, it is a perversion of language to say that the goods are left by them.
Reading this clause in connection with the former, it clearly appears that what the parties meant and provided for was that, if the consignees were not ready to receive their goods immediately upon their discharge from the vessel, the master was to deposit them, not on the dock or wharf, but in the warehouse or public store, at the expense and risk of the consignees, but that, if the carrier availed itself of the treasury regulations, to deposit the goods on the wharf under the 48-hour clause, the consignees' risk and liability for loss, while so deposited, would not commence until after they had notice of such deposit, and a reasonable opportunity to remove the goods. It cannot be properly said that there was or could be, on their part, any leaving of the goods so deposited until the consignees were put upon the duty of accepting delivery or taking charge of the consignment, which would not arise until they had received notice.
This interpretation of the clause is sustained by the well-considered case of McKinney v. Jewett, 90 N. Y. 267, 270, 272, where the contract provided that the carrier should not be liable as such while the goods were 'at any of their stations awaiting delivery.'
But, conceding that the clause it ambiguous, the settled rules of construction do not sanction a liberal interpretation thereof in favor of the carrier, but directly the reverse. Especially is this so when, as in the present case, the steamship company has, by its action in procuring the 48-hour permit, itself placed a different construction upon the clause. It is well settled that the practical construction placed by parties interested upon doubtful or ambiguous terms in a contract will exercise great, and sometimes controlling, influence in determining its proper meaning. Topliff v. Topliff, 122 U.S. 121, 7 Sup. Ct. 1057; District of Columbia v. Gallaher, 124 U.S. 505, 8 Sup. Ct. 585.
The general order for discharge, obtained upon the entry of the vessel, directed that the cargo, except certain perishable articles,-gunpowder, neat cattle, etc.,-should be landed and sent to public store 502-510 Washington street. This general order was not acted on by the steamship company, but, as shown by the eleventh finding of fact, after securing the general order, the respondent obtained from the collector of the port a special license, under the provisions of section 2871 of the Revised Statutes, to unload at night, and gave bond to indemnify and save the collector harmless from any loss or liability which might occur or be occasioned by reason of the granting of that special license. The carrier furthermore voluntarily applied to the collector, and obtained a permit for the goods to remain upon the wharf for 48 hours from the time of granting the general order, at the risk of the owners of the steamer, and upon the agreement that they would pay to the consignees or owners the value of such cargo, respectively, as might be stolen, burned, or otherwise lost while so deposited.
The permit to unload at night was manifestly for the benefit and convenience of the carrier. The same is true in respect to the permit for the goods to remain on the wharf for 48 hours. The unloading commenced in the afternoon of January 31st, after business hours, and was continued through the night; and, even if notice had been given to the consignees, there was no reasonable time and opportunity afforded them to remove or take charge of the goods before they were destroyed by fire.
In the execution of its undertaking to deliver the goods to the consignees at the port of New York, the carrier had no right to change or increase the risk by any departure from the express stipulations of the contract. In unloading at night for its own benefit, and in depositing the goods upon the wharf for its own convenience, the risk and liability of loss was manifestly increased; and the goods having been destroyed while subjected, by the voluntary act of the carrier, to this increased risk, it is liable for the loss, unless expressly exempted by some provision of the affreightment contract. It must be borne in mind, as Lord Lyndhurst expressed it in Gatliffe v. Bourne, before house of lords, that the contract was 'to deliver the goods to the consignees' at the port of destination. Instead of making, or attempting to make, such delivery, either actually or constructively, the carrier, on a permit from the collector, deposited the goods on the wharf, thereby changing, if not increasing, the risk of loss, in a way not provided for by any stipulation of the contract.
Again, it was found by the circuit court: (12) 'That said general order and special license, cense, and said applications and permits, and the agreements and engagements therein contained, were the usual and customary ones ordinarily made and granted in such cases, and that they were made and granted under and by the authority in and by said bill of lading conferred upon the respondent and upon said collector of the port of New York by the libelants herein, and under and in accordance with the provisions of law in that behalf and the regulations of the United States treasury department on that subject;' and, further: (13) 'That said applications were made, and said general order and special license and permits were obtained, on behalf of the respondent, under the instructions and by direction of the respondent's agent in the city of New York, and all of the agreements and engagements made and entered into therein or thereby, and on behalf of the respondent or the libelants, were made and entered into under and pursuant to the same instructions and directions of said agent.'
In the light of these findings the contract of the parties should be interpreted as though the clause in question had read as follows: 'The United States treasury having given permission for goods to remain forty-eight hours on the wharf at New York, at the sole risk of the steamship company, and upon its undertaking to pay to the consignee or owner the value of such cargo, respectively, as may be stolen, burned, or otherwise lost while so remaining, now, it is understood that if the steamship company avails itself of this regulation, and obtains permission for the consignment to remain on the wharf for forty-eight hours upon said terms, its risk and liability for losses shall only continue and remain in force until the consignee has had due notice and opportunity to remove or take charge of the goods; and if, thereafter, they are left by the consignee, it will be at his risk of fire, loss, or injury.' This harmonizes all the clauses, and is alone consistent with the correlative duties and obligations of the parties.
It is not material to the present case to determine whether the regulations of the treasury department set out in the eleventh finding of the court below have the force of law, and imposed upon the steamship company the duty of entering into the stipulation to pay the consignees for the loss of the goods deposited on the wharf under the 48-hour permit. That stipulation was entered into voluntarily by the steamship company. There was no requirement in the contract of affreightment that it should obtain any such permit, and it cannot be properly said that the stipulation which it entered into in order to secure permission for the goods to remain 48 hours on the wharf was inconsistent with any provision of the law or regulations of the treasury department. No provision of the bill of lading exempted the carrier from liability for loss by fire that might happen while the goods were deposited on the wharf under the 48-hour permit and no reason appears why the carrier might on the wharf under the 48-hour permit, the law would otherwise impose upon it, until, by proper notice, the duty of taking care of the goods was shifted or transferred to the consignees.
But it is said the consignees cannot avail themselves of this promise made be the steamship company to the collector, because they are not privies thereto. This, however, ignores the above findings of fact by the court, which make the consignees parties to the arrangement. Aside from this, while it is undoubtedly the general rule that a person who is not a party to a simple contract cannot enforce such contract at law, and that a promise made by one person to another for the benefit of a third, who is a stranger to the consideration, will not support an action by the latter (National Bank v. Grand Lodge, 98 U.S. 123), there are many exceptions to the rule, one of which, according to the New York decisions, is where the party seeking to enforce the contract was intended to be the beneficiary of the promise (Lawrence v. Fox, 20 N. Y. 268; Coster v. Mayor, etc., 43 N. Y. 399, 410, 412; Garnsey v. Rogers, 47 N. Y. 233; Vrooman v. Turner, 69 N. Y. 280).
The promise made by the steamship company in the present case falls directly within the rule announced in Vrooman v. Turner, 69 N. Y. 280, there being-First, a clear intent by the promisor to secure a benefit to the consignees; second, a privity between the two in respect to the protection of the goods, the risk of which the carrier assumed; and, third, an obligation or duty owing by the steamship company to the consignees to properly care for the goods until delivery could be made, which gave to the consignees a legal and equitable claim to the benefit of the promise. The decisions in other states are conflicting on this question.
But, if an action at law would not lie upon the promise made by the respondent in obtaining the 48-hour permit, it by no means follows that the consignees could not successfully invoke the aid of a court of equity in enforeing the agreement. The legal rule invoked is not so rigidly or so strictly adhered to by courts of equity as by courts of law. Thus, in Keller v. Ashford, 133 U.S. 610, 625, 10 Sup. Ct. 494, the mortgagee was permitted to enforce in equity a contract between the mortgagor and his grantee, by the terms of which the grantee assumed the payment of the mortgaged debt. See, also, Willard v. Wood, 135 U.S. 309-314, 10 Sup. Ct. 831; Norwood v. De Hart, 30 N. J. Eq. 412. Now, the broad principles of equity are recognized and applied by the admiralty courts, and the steamship company's agreement being, as properly held by the court below, an admiralty contract, and the consignees being the parties intended to be benefited thereby, and it being one contemplated by the parties at the time of entering into the contract of affreightment, no valid reason is seen why the consignees should not have, by this libel, the right to enforce the stipulation, voluntarily entered into by the steamship company, which agreement is not in conflict with any provision in the bill of lading.
It is true that the court below found (twenty-seventh finding) that it was the intention of the parties to the bill of lading that goods remaining for 48 hours on the wharf, under the permit obtained on the application of the steamship company, should be at the risk of the consignee of fire, notwithstanding the agreement of the steamship wharf, under the permit obtained on the application a good finding of fact, but is a mere conclusion of law based upon the court's construction of the clauses of the contract, above referred to, and is not binding upon this court.
The opinion of this court seems to proceed largely upon the idea that the consignees, if they had received notice, could not have removed the goods before they were destroyed; and, further, that, inasmuch as they took no steps on the faith of the cargo being discharged at the usual place, they were not prejudiced by the change. These are considerations that do not control or change the rights and liabilities of the parties. The real question in cases like this is whether the carrier has brought itself within any exemption from liability by showing that the loss was caused by the act of God or by the public enemy or by the shipper, or was within some excepted clause in the contract of affreightment. If this is not shown, the carrier is liable for the loss. Clark v. Barnwell, 12 How. 272, 280.
While not controverting the legal principles governing the liabilities and duties of carriers, the opinion of the court seems to imply that to some extent they should be modified or suspended to meet the improved modern methods of rapid transportation. But I submit that long-established legal principles founded upon a wise public policy are not to be either ignored or disregarded to meet a supposed public convenience, especially in a case like the present, where the resident managing agent of the carrier knew for at least six days before the arrival of the vessel that she would land and discharge her cargo, not at the usual place, but at the Inman pier, and thus had ample opportunity to give to the consignees, who were known to the steamship company, notice of the change. The true rule on this question is well stated by Judge Porter in Kohn v. Packard, 3 La. 230, as follows: 'There are inconveniences in whichever way the question is viewed,-on the part of the owners of the ship, that of giving such notice of the time and place of discharge as will enable them to bring knowledge of the fact home to the persons who are to receive the goods, or, in default thereof, imposing on the former the obligation of sending the merchandise to some place of safety. But this inconvenience, we think, is not to be compared with that to which the latter would be subject if their property could be landed without their knowledge, and be thereby lost or damaged. On the one side there is additional trouble; on the other, probably, a total loss. After the best consideration in our power, we think the conclusion we have come to is most consonant to law, and will tend to promote public convenience.'
The opinion of the court does not deal with that clause in the bill of lading which provides that the steamship company, or its 'agents, or any of its servants, are not to be liable for any damage to any goods which is capable of being covered by insurance.' The court below held that this clause relieved the steamship company from liability. This condition or provision of the bill of lading is expressed in terms so general and comprehensive as to require the shipper or consignee to insure, not only against the enumerated perils and exceptions, but against any and all malfeasance or misfeasance on the part of the carrier. It admits of grave doubt whether this provision is not so unreasonable as to be void under the principle laid down by this court in Railroad Co. v. Lockwood, 17 Wall. 357, 380, 382; Hart v. Railroad Co., 112 U.S. 331, 5 Sup. Ct. 151; Phoenix Ins. Co. v. Erie & W. Transp. Co., 117 U.S. 312, 322, 323, 6 Sup. Ct. 750, 1176; Inman v. Railway Co., 129 U.S. 128, 139, 9 Sup. Ct. 249; Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U.S. 397, 455, 9 Sup. Ct. 469; Carv. Carr. (2d Ed.) § 110; and Peek v. Railroad Co., 10 H. L. Cas. 473. In this last case the condition was that the company 'shall not be responsible for loss of or injury to any marble * * * unless declared and insured according to its value;' and it was held, upon full consideration, that the condition, as a whole, was unreasonable and void.
In the present case it is not necessary to determine that this clause is so unreasonable as to be void. So far as it has been considered by the courts, it has been restricted in its application. Thus, in Taylor v. Steam Co., L. R. 9 Q. B. 546, it was held not to cover a loss of the goods by theft, committed while they were on board, either during the voyage or after arrival; and in The Titania, 19 Fed. 101, while the provision was considered valid, it was held by the court that it must be construed to refer to insurance which might be obtained in the usual course of business from the ordinary insurance companies, either in the usual form, or in the customary course of business upon special application. In that case injury from the breaking loose of a spar propeller was held not to be within the exemption.
Giving to the clause this reasonable construction, the loss in question would not have been covered by the ordinary marine policy on the cargo, which generally covers the goods while being carried abroad ship, during the voyage, and until safely landed, and no longer. The clause did not impose upon the consignees the duty of anticipating that the carrier would land the goods at an unusual place, and it would have been out of the usual course of business for the consignees to have sought to insure against what they did not, and could not, know would take place.
So in reference to fire insurance. While it is shown by one of the witnesses that fire insurance could have been procured on 'goods lying on the wharf by the side of the ship, before they were actually taken away,' the clause in question did not require that the consignees should have anticipated that their goods would be unloaded at night and deposited on the wharf. Aside from this, it is ordinarily essential, in a fire insurance policy, that the locality of the risk should be specified. The consignees in the present case could not have complied with this general rule without having some knowledge or information as to where their goods would be landed. The local agent of the steamship company had six days' notice of the fact that the cargo of the vessel would be landed at the Inman pier, No. 36; but that fact was not communicated to the consignees, and they had not, therefore, the data to procure ordinary fire insurance upon the goods after being landed.
It would be unreasonable, and contrary to sound principle, to allow the carrier to assert exemption under such an insurance clause without affording the consignees, by proper notice, an opportunity to effect insurance in the usual way upon their goods while deposited on the wharf. If, after being notified that their goods were deposited on a particular wharf, other than that at which their consignments were usually received, the consignees had failed and neglected to take out insurance, the clause, if valid, might have been invoked for the protection of the carrier; but, under the facts of this case, to give the carrier the benefit of the clause would be to allow it to take advantage of its own neglect of a legal requirement.
I am of opinion that the decree appealed from should be reversed, and the court below directed to enter a decree in favor of the libelants; and I am authorized to state that Mr. Justice FIELD and Mr. Justice GRAY concur in this opinion.
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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