Case Name: JAMES BISHOP and others v. THE EMPIRE TRANSPORTATION COMPANY
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1871-02-04
Citations: 1 Jones & S. 99
Docket Number: 
Parties: JAMES BISHOP and others v. THE EMPIRE TRANSPORTATION COMPANY.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 33
Pages: 99–114

Head Matter:
JAMES BISHOP and others v. THE EMPIRE TRANSPORTATION COMPANY.
I. Pleadings.— What constitutes an averment of the fact of a certain agreement having been made.
1. An allegation that a certain written and printed contract, a copy of which is annexed to the complaint, contains the terms and conditions of the agreement between the parties, is an allegation of fact that the terms and conditions contained in the annexed paper were agreed on between the parties.
H. Bill of lading.—Valid and invalid clauses.
1. Valid clauses.
а. One providing that each consignment of goods might be retained for all arrearages and charges due the carrier on other goods by the same consignee and owner, is not invalid either by reason of clogging the negotiability of the bill of lading, or by reason of interfering with any duty that may rest on the carrier, when the previous goods for the freight and charges on which the subsequent ones are sought to be retained, belonged to, and were delivered to the same person to whom the subsequent ones belonged at the time of the making of the contract contained in the bill of lading.
б. A clause requiring the presentation to the carrier of bills of lading properly indorsed, as the evidence whereon delivery is to be made, is valid.
1. A defense setting out the clause and averring that no bills of lading were ever presented, is good, and throws on the plaintiff the burden of, in some manner, avoiding it.
2. Invalid clause.
a. A clause requiring the bill of lading to be presented, properly indorsed, before the arrival of the goods at the place of des UnaUon, in order to render an assignment or transfer thereof binding on the defendants, or to establish a right to the delivery of the goods, is invalid.
Before Monell, Jones and Freedman, JJ.
Decided February 4, 1871.
This action is brought to recover damages for not safely carrying and delivering certain goods entrusted to the defendant for its carriage as a common carrier.
The complaint alleges “that in consideration that one A. J. Thompson delivered to defendant certain goods, the defendant delivered to said Thompson an instrument in writing, subscribed by its agent, by which they agreed to carry said goods and safely deliver the same at Communipaw, New Jersey, for certain freight, therein mentioned. That said Thompson delivered, indorsed and set over said bill of lading to the plaintiffs. That defendant did not safely carry and deliver the said goods pursuant to said agreement, although the plaintiff offered' to pay the freight and charges on the same, and duly demanded the same of defendant, but has always refused to deliver the same, and never have delivered the same to plaintiffs, to their damage of five hundred and sixty dollars.”
The complaint contains four other similar causes of action; altogether amounting to three thousand two hundred and sixty dollars.”
The answer first contains eight paragraphs, one° of which is prefaced with the word “First,” another with the word “ Second,” and another with the word “Third.” These eight paragraphs are devoted, in one shape or another, to a denial of the allegations in the complaint. The answer then proceeds with a ninth paragraph, prefaced with the word “Fourth.”
‘ ‘ Fourth. And for a further and separate defense to the causes of act "on, and each of them set out in the complaint, the defendants further allege, repeating the denials heretofore made, that all oil at any time delivered to defendants for transportation by A. J. Thompson, including the oil described in the complaint, was received by the defendants, and was to be carried by them under, and in accordance with, the terms of a certain written and printed contract, being a certain bill of lading, a copy of which is annexed to and forms a part of this answer, and which contains the terms and conditions of the agreement between the parties.
“Defendants further allege that in and by the fifth article of the said bill of lading it is agreed and provided, and a portion of the contract between the parties that no assignment or transfer of the said bill of lading should bind or affect the defendants, or establish a right to the delivery of the oil, unless the said original bill of lading setting forth the same should be presented, properly indorsed, to the National Storage Company, the agents of the defendants at the city of New York, on or before the arrival of the oil at the place of destination—namely, at Communipaw, in the State of New Jersey.
“That the defendants intended in and by said provisions to guard against rival and fraudulent claims to the same oil between the consignor and consignee of a bill of lading for the same.
“ And defendants expressly deny that the plaintiffs or any other person at any time presented any of the bills of lading so issued to A. J. Thompson, with any indorsement whatever, to the National Storage Company, or to the defendants. And defendants deny that said bills, if indorsed at all, were indorsed at or before the arrival of the oil at the point of destination, and allege that if such bills of lading were presented at all, they were only so presented without any indorsement ' whatever, and without any proof that the person so presenting was entitled to the property,, and after the arrival of all the oil at the point of destination.”
Then follows another paragraph, prefaced with the word “Fifth.”
The answer then proceeds :
“Sixth. And for a farther and separate answer to the causes of action, and each of them set out in the complaint, the defendants further allege, incorporating herewith and repeating all the allegations contained in paragraph four of the first separate defense herein, contained in folio five, and the denial hereinbefore contained, that in and by the sixth provision of the said bill of lading under which all said oil was carried, it was provided that each consignment of the same might be retained for all arrearages of freight and charges due these defendants on other goods by the same consignee or owner.
“And defendants farther say, that at the time of the shipping and arrival of. any of the consignments of oil referred to in the complaint, there was due to the defendants in this action for freight and charges, an amount greater than the whole value of all the oil set out in the complaint upon other goods previously shipped by the same A. J. Thompson to the same Lyman D. Saxton (named as agent) as consignee, all of which oil and goods were delivered to the defendants, and carried in the same manner and under the same bill of lading as the oil in question, and with the same consignor and consignee, and that on or about the time of the arrival of the oil in question, or of the first consignment of the same, and at all times afterwards, the said Saxton was and has at all times remained largely in the defendants’ debt, upon other goods to him shipped as consignee, as was also the owner of said' oil, and that if any assignment or transfer of the bill or bills of lading for said oil, was at any time taken by the plaintiffs, the same was taken with notice of such provision, which, provision was also known to the plaintiffs by previous dealings with the defendants, as was also all and singular the provisions contained in the said bill of lading.”
The printed papers do not show the folios of the answer ; but on reference to the original answer contained in the judgment roll and the copy thereof served on the plaintiff’s attorney,'it appears that folio 5 commences with the word “and,” immediately succeeding the word “ Fourth,” which prefaces the above extracted ninth paragraph of the answer, and ends with the word “parties,” where it first occurs in that paragraph.
The plaintiffs demur to the above fourth and sixth defenses for insufficiency in not stating facts sufficient to constitute defenses.
At special term the demurrer was overruled, and judgment ordered for the defendant thereon.
Judgment was accordingly entered, and plaintiffs appeal therefrom.
Edward L. Andrews, for the appellant, made the following points as to the effect of the pleadings.
I. The defense demurred to (6th), avers, “ that in and by the sixth provision of the said bill of lading, under which all said oil was carried, it was provided that each consignment of the same might be retained for all arrearages of freight, &c.” It cannot certainly be urged that the above allegation states that the shipper contracted with the carrier that his goods could be retained, &c. It simply states that the bill of lading provides so and so ; the plaintiffs admit throughout the argument that the bill of lading did provide that the goods could be retained for arrearages of freight; and still the whole question in the case—whether such a provision in the bill of lading constituted a contract be tween the parties under the laws of Pennsylvania or of Hew York—remains to be settled.
II. But it was urged by the court that the clause “the defendants further allege, incorporating herewith, and repeating all the allegations contained in paragraph 5, of the first separate- defense herein, contained in folio 5, and the denial hereinbefore contained,” included allegations which, if admitted for the purposes of the argument, would effectually preclude the plaintiffs from disputing the character of this clause in the bill of lading. After a close investigation of the pleadings, such a result does not appear. What is paragraph 4 of the first separate defense 1 It is a denial that the defendants know anything of the value of the oil— a matter which does not, of course, affect the question involved in this demurrer. And as to the denial hereinbefore contained—that the defendant has no information of any assignment of the bill of lading —this is the very point involved in the demurrer to the fourth defense, where it is shown, that in the absence oí any assignment of the bill of lading, naked possession for good consideration will sustain a party’s right to the property. And there is nothing to show that this denial was the one of several denials, referred to as the denial hereinbefore contained. "Hence there is nothing alleged in this defense, in any way, the admission of which affects the plaintiff’s case ; there is no allegation included in this defense that every clause in the bill of lading formed a contract, as the court was led to suppose, from a hasty reference to the pleadings. Here it is alleged that the bill of lading was a contract in all its parts. But it is scarcely necessary to urge, that in a bill of lading set forth in hcee verba, the calling of' the instrument thus set forth a contract does not conclude the court to consider it on demurrer as a contract, or consider it admitted by the other side to be a contract —the great conclusion of law to be settled in the case. When a pleading states that a party entered into a contract in, or by the words and figures following, those words must show upon their face that both parties are bound thereby as by a contract. If the pleader had to resort to extrinsic evidence to show it to be a contract, he has pleaded badly—he has pleaded in Ticrc verba, when he should have pleaded the legal effect, and he should not be allowed to take advantage of his bad pleading to defeat a demurrer. When a party demurs to a contract, pleaded in Jiaec verba, he is entitled to look at just those facts alone which appear on the face of the papers. By pleading in Ticec verba, a party imports that the instrument he sets forth contains all the language and acts binding on the parties. Instead of calling the documents set forth an agreement, he should have alleged that the plaintiffs accepted the document set forth, and assented to each and every clause thereof. Those facts, properly plead-able, were necessary to make the bill of lading, in any of its parts, more particularly in the objectionable clauses, well pleaded, as a contract between the parties. The defendant does not say that we agreed to so and so, but that we entered into a contract in the words and figures set forth. The question here is, did we, by those words and figures, enter into a contract % It is a well-established rule, that on a demurrer, facts well and sufficiently pleaded are. alone admitted. All such are here admitted, but not the allegation that an instrument is on its face a contract when it appears on its face not to be a contract; when no acts of the parties are stated to make it a contract; when calling it a contract is clearly a conclusion of law. The demurrer to the sixth defense does not, however, involve even this question, and no facts are in any way, even impliedly, admitted which can effect the force of that demurrer.
With respect to the validity of a clause by reason of its clogging the negotiability of the bill of lading, he submitted the following points.—I. In England, and probably in this country, a deliberate executory contract—where the assent of both parties to such an extraordinary agreement was clear—for a general lien on the contractor’s property for his own debts and the debts of a third person would, perhaps," be sustained. But supposing this court found the elements of a contract for such a purpose in this bill of lading, the contract in that form would be against public policy. It would destroy the negotiability of bills of lading, whose negotiable character has always been anxiously guarded; it would be imposing ón the shipper and owners an oppressive condition, under circumstances' amounting to constructive duress; it would be enabling the common carrier to rid himself of his common law duty to collect the freight before delivering the goods, and yet to reap all the advantages of his right of lien in an other way. And this, too, by the abuse of an instrument nurtured by the law as the representative of property in transitu and intended to facilitate commercial operations by its negotiability (Wright v. Snell, 5 Barn. & A. 350).
II. In England, after a long experience of the practice of validating notices in bills of lading, it has been found necessary to return, to some extent, to the common law system ; and this tendency is apparent in all countries where the English rulings have been followed.. In order that a carrier may now, in England, bind the shipper to any variation from his common law liability, or to any departure from the inherent requisites of a bill of lading, it is necessary that the. shipper’s' signature be given to a contract in writing, entered into before the shipment of the goods. It is, therefore, improper, in view of the tendency to revert to common law principles, that the court should give this extraordinary extention to the effect of notices (Railway and Canal Traffic Act, 1854, 17 and 18 Vict.).
III. The rights of the plaintiffs have thus far been contended for as if they succeeded to no greater rights than the shipper possessed. But the carrier, by issuing an instrument negotiable in form, gave to an innocent holder thereof rights against himself even greater than were possessed by the original party to the contract. This has always been the law with regard to the receipt portion of a bill of lading ; and where an instrument is in its general form of a negotiable character, the rule protecting the rights of third parties is properly applicable. So that even if the shipper were bound by notices, of which he had no cognizance, actual or implied, it is questionable whether his assignee, without notice, is bound in these particulars (Lickborrow v. Mason, and Notes in Smith L. Cas.).
IY. All the previous arguments upon the common law rights of the plaintiffs, are really rendered superogatory by the Pennsylvania statute, which is incorporated-in the complaint as a part of this cause of action, It distinctly provides that unless a bill of lading has the words “not negotiable” clearly stamped across the face of the instrument, the party advancing money upon the faith of such bill of lading, shall have the first lien upon the property represented thereby, after the payment of the freight and charges upon the goods represented by it. The defendant, therefore, had the proper means provided by this statute, for protecting its rights against any transferee of the bill of lading—namely, by stamping the words “not negotiable ” thereon, and thus giving notice to all innocent purchasers. The plaintiffs must, therefore, necessarily succeed upon this demurrer under the statute (Purd. Dig. Pa. Stat. 1862-9).
With respect to the validity of a clause requiring the bill of lading to be presented, properly .indorsed, on or before the arrival of the goods at their destination, he urged: 1. It is now thoroughly settled in this State, that a delivery of a bill of lading for good consideration passes the property in the goods represented thereby, equally well as if it were indorsed to the transferee (Marine Bank of Chicago v. Wright, 46 Barb. 65; quoting Bank of Rochester v. Jones, 4 Comst. 497). 2. Hence it is no answer for the defendant to say, that the bill of lading was not indorsed to these plaintiffs by the shipper, a delivery thereof being as effective as an indorsement at common law. And as the- clause referred to is no part of the contract between the shipper and the carrier, the carrier has been guilty of conversion of the property of the plaintiffs, to whom the bill was transferred for good consideration. The same reason—absence of contract between parties—renders the provision in the same clause with regard to the time of presentation of the bill of lading equally nugatory. Finally, the plaintiffs, being the owners of these goods at law, and their assignor never having assented expressly or impliedly to any form of assignment, or any limited time for the presentation of claims against the defendant, they are fully subrogated to the shipper’s right, and are now entitled to recover in this action.
Mr. Cadwallader, of counsel for defendant, urged,
I. As the law is now settled in this State, a common carrier may, by contract or express stipula tion, limit his liability and agree upon terms on which the goods shall be carried, even so far as to wholly exempt himself from any liability whatever (Wells v. N. Y. Central R. R. Co., 24 N. Y. 196 ; Smith v. Same, Id: 222 ; Bissell v. Same, 25 Id. 442; Simmons v. Law, 3 Keyes, 217 ; French v. Buffalo, &c. R. R. Co., 4 Id. 108, and cases cited ; Prentice v. Decker, 49 Barb. 21 ; Boswell v. Hudson River R. R. Co., 5 Bosw. 699 ; Price v. Hartshorn, 44 Barb. 655 ; Redpath v. Vaughan, 52 Id. 489; Stedman v. Western Trans. Co. 48 Id. 97 ; Lee v. Marsh, 43 Id. 102). Not only the rule of law, but the theory of the law, in regard to carriers, has undergone a complete change. The rule was, that it was against the policy of the law to allow a carrier to limit his liability; the rule now is, that it is in furtherance of trade to allow parties, to make their own contracts and assume certain risks; and there is now in this State no limit to the right of a carrier to contract to carry, as he and his bailee may agree.
II. The assignee of a bill of lading is on precisely the same footing as his assignor, and, besides, the plaintiffs knew all the provisions and stipulations in the contract.
III. While we insist, that as the law now stands, the court cannot look into a contract to see if the conditions are advantageous to the public or against the policy of the law, still the provisions in question are reasonable, and would always have been sustained. 1. The provision as to the indorsement is to meet this very case. A shipper sends forward oil which is consigned to A. B. A third party, without title, except from his own statement, claims the oil. A negotiable bill of lading has been issued, and is held by some one. Can it be possible that the court would ever have held that a provision compelling the assignee of a bill of lading to produce it indorsed, would be unreasonable % Nevins v. Bay State Co., 4 Bosw. 225 ; Platt v. Wells, 2 Robt. 101 ; Blossom v. Champion, 37 Barb. 554. (a.) The law of Pennsylvania set out in the complaint has no application. We do not admit it, but deny it in the answer. And if it were in evidence, it seems to provide that the bill of lading must be indorsed, (b.) The question as to the presentment prior to the arrival of the oil is not material, as, in this case, no bill of lading ever was presented indorsed, and the court will only decide the case at bar. 2. The provision as to a general lien for freight, &c., is reasonable, (a.) This is a lien given by contract, and no rule of law requires the court to annul contracts made with carriers as to their lien, especially where this is known to the assignee, and goods are carried relying on it. (5.) We must distinguish between obligations by law, by custom and by contract. Certain English cases, as Wright v. Snell, 5 Barn. & A. 350; Luckhart v. Cooper, 3 Bing. N. C. 99, have held, that a general lien would not be given by usage or agreement in certain peculiar cases, where the lien was used to take the property of innocent third parties, to satisfy a debt. But here the lien is given by the party who owned the goods, and plaintiffs bought, if at all, subject to that claim. Lord Kenton says (9 Bing. 574): “An express contract is the strongest ground upon which the right to a lien can in any case be placed.” (c.) No case can be found where the contracting parties, as owner and carrier, have agreed that a certain lien should be given, that the court has interfered (Small v. Moates, 9 Bing. 574 ; Oppenheimer v. Russell, 3 B. & P. 42 ; Naylor v. Mangles, 1 Esp. 109 ; Gledstanes v. Allen, 12 C. B. 202 ; Spears v. Hartley, 3 Esp. 81 ; Kern Deslandes, 10 C. B. N. S. 205). In Fry n. Bank of India (1 C. P. [1855] 689), the court holds appropriate words will give a general lien. Even a contract for a lien on future acquired property is good (Seymour v. C. & N. R. R., 25 Barb. 284).
Points were submitted on both sides on the question as to whether the shipper by the delivery to him, or by the delivery to, and retention -without demur by, him of a bill of lading, becomes bound by all the stipulations and conditions which the carrier chooses to insert therein; but as the court does not pass on the question, the points are omitted.

Opinion:
Jones, J.
One of the questions designed to be raised by the demurrer is, whether a carrier can, by the insertion in the bill of lading of such clauses as are relied on in the defense demurred to, bind the shipper thereby,' without an express agreement made between the parties at or before the shipment, or an assent to the terms of the bill of lading, either express or implied by the shipper's shipping his goods with full knowledge of the terms and conditions which the carrier has established as those on which he will undertake to carry; or, in other words, whether the mere delivery to, or retention by, the shipper, of a bill of lading, binds him by all the terms thereof, although at the time of its delivery his goods may be on their way to their destination, and he then first becomes aware of the contents of the bill.
The appeal papers, however, are not in proper form to present this question.
The defenses aver (the sixth defense by reference to the above cited paragraph in folio 5 of the answer which is prefaced by the word "Fourth"), that the oil in question was received by defendants, and was to be carried by them under and in accordance with the terms of a certain written and printed contract, a copy of which is annexed, which contains the terms and conditions of the agreement between the parties.
This is an allegation of fact that the parties made an agreement with each other as to the terms and conditions on which the oil should be carried, and that the terms and conditions so agreed on appear by and are contained in a paper writing, a copy of which is annexed to the answer.
The demurrer admits that said agreement was made. Consequently, the above point designed to be raised, does not arise; and, therefore, so far' as this point is involved, the order below was right.
But as it may be that in point of fact no such agreement was made, unless the law adjudges the delivery to and retention by the shippers of the bill of lading the making of a contract between the parties, as to all provisions inserted therein by the carrier, the plaintiff should have leave to withdraw his demurrer so as to require the defendant to show on the trial on what he bases his averment of an agreement, and to enable him (the plaintiff), in case the averment is based on. the bare -facts of a delivery and retention of the bill of lading, to raise the question of law designed to be presented on this demurrer.
The bill of lading containing the clauses in question, gave notice thereof to the assignee or transferee. He cannot be considered a bona%de holder without notice (conceding that it would make any difference if he was), and, consequently, stands in no better position than the shippers.
These views would dispose of the appeal, were it not for the question of costs.
To dispose of that question, it is necessary to inquire whether, for any other reason, the demurrer was well taken.
Plaintiff's counsel claims, as to the sixth defense, that even if the shippers and carriers had expressly agreed with each other to the effect therein set forth, still the agreement would be void as against public policy:
1. Because it would be a clog on the negotiability of a bill of lading.
3. Because it would absolve the carrier from his duty of collecting from the consignee his freight and charges on delivery.
As to the first ground: It is not perceived that there is any reason why the parties, if they see fit, may not clog negotiability of the bill of lading under which the one ships and the other carries.
As to the second ground: Without stopping to inquire what may be the duty of the carrier in this respect, suffice it to say that, conceding it to be as claimed, it is not perceived how the enforcement in this ease of the agreement in question, conflicts with this duty.
The previous - goods, the freight and charges on which are claimed to be a lien on the oil, belonged to said Thompson (to whom the present oil belonged), who consigned the same to his agent, one Saxton (to whom, also, he consigned the present oil). Those other goods were delivered to the said Thompson, himself, the delivery to his agent being delivery to himself. That Thompson obtained the delivery to himself of his own goods without prepaying the freight and charges, did not discharge him of his liability therefor, nor did such delivery conflict with any duty the defendant owed towards him.
There may be cases in which the clause in question would not be operative ; but the present is not one of them.
This ground of demurrer is not well taken.
With reference to the fourth defense, so much of the contract as requires the bill of lading to be presented, properly indorsed, before the arrival of the oil at its place of destination, in order to render an assignment or transfer thereof binding on the defendants, or to establish a right to the delivery of the oil, is unquestionably invalid in this State, as it contravenes the statutes made and provided for the institution and prosecution of actions. The carrier and shippers can, without doubt, agree as to the evidence upon which the carrier shall deliver. Bat they cannot go further and contract that such evidence must exist and be presented at any particular time. For the effect of this would be, that although the property in the goods was proved, to and belonged, to the assignee, yet he could only enforce a delivery by action in the name of the owner.
He could, were it not for the law of this State, so enforce a delivery, for if the carrier be not bound to recognize the assignment, he is bound to recognize the shipper; and the assignee, having all the beneficial rights of the shipper, would be authorized to demand a delivery in his name, and, in case of refusal, to bring an action in his name.
Our law, however, requires the action to be brought in the name of the real party in interest, and any contract, the effect of which is to require the beneficial owner to proceed in the name of the person from whom he derived title, must be deemed invalid.
The contract in question, however (as the demurrer as above held, admits for the purposes of the argument), required the presentation to the defendant of bills of lading properly indorsed, as the evidence whereon delivery was to be made. The fourth defense sets out this contract and alleges that none of the bills of lading mentioned in the complaint were ever at any time presented.
This, if true, constitutes a good defense ; and throws on the plaintiff the burden of, in some manner, avoiding it.
The special term was correct in overruling the demurrer ; but leave should have been given to plaintiffs to withdraw the demurrer, and go to trial on the issues framed by the complaint and answer, upon payment of the costs of demurrer.
The judgment entered on the order overruling the demurrer should be vacated, and the order itself modified so as to give the plaintiff leave to withdraw his demurrer, and go to trial on the issues formed by the complaint and answer, upon payment of the costs of the demurrer and of this appeal.
The demurrer to be withdrawn and costs paid within ten days after taxation of the costs.
In case of non-payment of said costs within that time, the order and judgment are affirmed, with costs of appeal.