Case Name: OLIVIER STRAW GOODS CORPORATION v. OSAKA SHOSEN KAISHA
Court: United States District Court for the Southern District of New York
Jurisdiction: United States
Decision Date: 1927-09-17
Citations: 21 F.2d 618
Docket Number: 
Parties: OLIVIER STRAW GOODS CORPORATION v. OSAKA SHOSEN KAISHA.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 21
Pages: 618–620

Head Matter:
OLIVIER STRAW GOODS CORPORATION v. OSAKA SHOSEN KAISHA.
District Court, S. D. New York.
September 17, 1927.
Bigham, Englar & Jones, of New York City (Henry N. Longley and E. G. Benedict Fox, both of New York City, of counsel), for libelant.
Hunt, Hill & Betts, of New York City (John W. Crandall and J. Newton Nash, both of New York City, of counsel), for respondent.

Opinion:
THACHER, District Judge
(after stating the facts as above). For the purpose of decision, it may be assumed that the libel-ant acquired the bill of lading for value, and without notice that the voyage had been abandoned and the merchandise destroyed before being put aboard the vessel.
Such cases as Pollard v. Vinton, 105 TJ. S. 7, 26 L. Ed. 998, turning as they do upon questions of agency, are not controlling, because the bill of lading in this ease was issued upon actual receipt of the merchandise, and the authority of the agent who issued it is not questioned. The shipper must have known that, contrary to its recital, the merchandise was not physically on hoard the vessel when it received its bill of lading. Delivery was made to the warehouse before the ship arrived in port. She was not scheduled to sail for several days, and of her schedule the shipper had notice. Furthermore, as between the shipper and the carrier, the recital that the merchandise was received.on board was not a warranty for the breach of which the carrier could be held liable. It was merely an acknowledgment of receipt, which, as between the parties to the contract, could be contradicted. The Delaware, 14 Wall. 579, 600-602, 20 L. Ed. 779; The Isla de Panay (C. C. A.) 292 E. 723, 730, affirmed 267 U. S. 260, 45 S. Ct. 269, 69 L. Ed. 603. The asserted liability must therefore rest upon rights attributed to the subsequent purchaser of the bill of lading, superior to those of the original shipper.
Instances of the enforcement of any such liability are extremely rare in the federal courts, because, in the absence of estoppel, the purchaser acquires only title to the property shipped and whatever rights the shipper would have under the bill of lading. Shaw v. North Pennsylvania R. Co., 101 U. S. 557, 25 L. Ed. 892. The ease of Higgins v. Anglo-Algerian S. S. Co., 248 F. 386 (C. C. A. 2d), is cited, but in that case estoppel was enforced because the carrier misrepresented the condition of the merchandise shipped, intending that subsequent purchasers of the bill of lading should rely upon its representations. Estoppels are enforced in the interest of fair and honorable dealing. They rest, to be sure, not upon premeditated fraud, but upon falsity of representation, made with intent that others shall rely upon the truth of what is said. Such intent may of course be inferred from the natural consequences of the carrier's act, to be judged in the light of usual commercial practice. But in this case no such intent is inferable. When the bill of lading was issued, there was no reason to believe that any one could he prejudiced by the recital that the merchandise was on board when the hill of lading was issued. It was not made with intent to influence the acceptance of the seller's draft, nor can the expectation that it would influence any person's action be imputed to the carrier. No one could have foreseen the earthquake and its consequences which destroyed the merchandise before it could be put on board, and it was only the intervention of this act of God which gave the recital importance. Viewing the transaction as of the time when the bill of lading was issued, it is clear that the carrier acted in entire good faith, intending and agreeing to put the merchandise aboard when the vessel arrived, and without any reason to believe that any subsequent purchaser would be prejudiced by the recital that the goods were already on board, when in fact they wore in the warehouse awaiting arrival of the ship.
Under these circumstances there is no injustice in permitting the carrier to show that the loss of the merchandise was duo to causes for which it was not responsible under the terms of its contract. To preclude its assertion of this defense would result in an odious and unjust extension of the equitable doctrine of estoppel, contrary to the principles of fair dealing upon which that doetrine rests. I am unable to distinguish Atchison, Topeka & S. F. R. Co. v. Harold, 241 U. S. 371, 36 S. Ct. 665, 60 L. Ed. 1050, from the ease at bar. That decision does not, as the libelant contends, turn on agency, but rests upon the ground that purchasers of hills of lading acquire no greater rights than the original shippers. In that ease the grounds for estoppel were quite as strong as those asserted at bar, but were held insufficient. The Isla de Panay, 267 U. S. 260, 45 S. Ct. 269, 69 L. Ed. 603, Id., 292 F. 723 (C. C. A. 2d), is not precisely in point, because estoppel was there attempted to be predicated upon silence, not upon affirmative misstatement. But in that ease the equities were much stronger than in the case at bar, and the decision is properly cited to show that the ruling in the Higgins Case can be extended only to cases which in equity require the enforcement of an estoppel. In my opinion this is not such a ease.
The loss having been occasioned and the voyage having been prevented by causes for which the carrier was not liable under the terms of its contract, the libel must accordingly be dismissed.