Case Name: The Missouri Pacific Railway Company v. The Peru-Van Zandt Implement Company
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1906-03-10
Citations: 73 Kan. 295
Docket Number: No. 14,537
Parties: The Missouri Pacific Railway Company v. The Peru-Van Zandt Implement Company.
Judges: All the Justices concurring.
Reporter: Kansas Reports
Volume: 73
Pages: 295–308

Head Matter:
The Missouri Pacific Railway Company v. The Peru-Van Zandt Implement Company.
No. 14,537.
(85 Pac. 408.) (87 Pac. 80.)
SYLLABUS BY THE COURT.
1. Railroads — Conversion of Goods Consigned to Commission Agent — Action by Consignee. When property has been consigned by the general owner to an agent who has a special interest therein as factor or commission agent, and the goods so consigned are negligently delayed in transit and converted by the carrier, so that sales thereof previously made by the consignee are canceled and lost, such consignee may maintain an action in its own name against the carrier for the recovery of damages on account of such lost commission, and also for the value of the property converted.
2. -Negligent Delay in Delivery — Damages in Excess of Freight — Consignee’s Rights. When a common carrier negligently delays the delivery of goods, so that the damages occasioned by such delay exceed the amount of freight due for the transportation of such goods, the consignee may rightfully demand the delivery of the goods without payment of the freight, and a refusal by the carrier to surrender possession upon such demand is wrongful, and amounts to a conversion.
3. -Presumption as to Knowledge of the Effect of Nondelivery. Common carriers are supposed to take notice of such natural events as are familiar to ordinary people. They will be held to a knowledge of seed-time and harvest, and the general customs relating thereto in the territory where they do business. A common carrier that, on June 12, 1903, received at the factory in Port Huron, Mich., thrashing-machines consigned to an implement dealer of Hutchinson, Kan., to be delivered at Lamed, Kan., with stop-over to unload some of the consignment at Seward, Kan.,’will be deemed to have had notice that such machines were for immediate sale, if not already sold, and that a delay of delivery until the entire thrashing season passed would defeat the purpose of the shipment.
4. - Conversion — Measure of Damages. An action was brought against a common carrier by the consignee of thrash- , ing-machines. At the trial it appeared that the plaintiff had sold the machines as a_gent_for the consignor, and was entitled to receive out of the proceeds of the sale a commission of forty per cent, of the price for which the sale was made. It also appeared that the carrier negligently» delayed the delivery of the goods until the sales were, for that reason, canceled, and the commission thereby lost. It further appeared that the carrier converted the machinery to its own use. The action .was brought to recover for the loss of commission and the value of the property converted. Held, that the price for which the sale had been made was the proper measure of damages in such action.
Error from Reno district court; Peter J. Galle, judge:
First opinion filed March 10, 1906.
Affirmed.
Rehearing granted April 6, 1906. Second opinion filed October 6, 1906.
Reaffirmed.
STATEMENT.
The Port Huron Engine and Thrasher Company, of Port Huron, Mich., manufactures thrashing-machines and sells them throughout the country through local agents. Its agent at Hutchinson, Kan., is the Peru-Van Zandt Implement Company (defendant in error). By the contract of agency it is the duty of the Peru-Van Zandt company to advertise, introduce and sell the machines to those desiring to purchase, and when a sale is made an order is taken from the purchaser, in writing, directing the Port Huron company to ship the machinery desired, stating price, manner of payment, and other particulars constituting the conditions of sale, which order is signed by the purchaser and delivered to the local agent. This order is forwarded to the Port Huron company by the agent making the sale. Upon this order the machinery is shipped by the designated route, consigned to the local agent. It is the duty of the agent to receive the machinery and hold possession thereof until payment is made or secured as stipulated in the order of the buyer. In completing the sale the agent takes in payment cash, notes, mortgages, or other security, as directed, but delivers the machinery only after the sale has been approved by the Port Huron company. Until such approval and de livery the title to the machinery does not pass from the seller.
The Peru-Van Zandt company receives for its services in making such sales a commission of forty per cent, of the selling price. If any machinery is taken back, or returned, the local agent takes charge thereof, and may resell it and receive a commission therefor.
The local agent pays all expenses incident to the sales made. The buyer pays the freight, in addition to the price stipulated for the machinery. Where payment is made by the purchaser with notes, collection is made by the agents; and out of the proceeds the commission is deducted. The commission always comes out of the proceeds of each sale when collected. The Peru-Van Zandt company under this employment sold two machines for the aggregate sum of $920, and took from the purchasers written orders therefor, which were duly forwarded to the Port Huron company. Upon receipt of the orders the machines were shipped over the road of the plaintiff in error, consigned to the Peru-Van Zandt Implement Company, at Larned, Kan., with stop-over to unload one of them at Seward, Kan., being the points where the purchasers lived. The bill of lading contained nothing to indicate the relation existing between the consignor (the Port Huron company) and the consignee; whether that of vendor and vendee, or principal and agent.
The machines were shipped June 12, 1903, and in ordinary course would have arrived at their destination within ten days, but on account of negligent delays they did not arrive until some time in the month of August, long after the thrashing season had closed and the sale contracts had for that reason been canceled. By the contract of shipment the freight was payable before delivery of the machinery to the consignee. The consignee declined to pay the freight, claiming that the damages suffered on account of delay far exceeded the amount of the freight bill. The carrier refused to deliver the goods until the freight was paid. Thereupon the defendant in error demanded that the machinery be delivered to it without payment of freight, and upon refusal commenced ‘this action. The demand was made in the name of the Port Huron company, by the Peru-Van Zandt company, as agent. The petition alleged that the plaintiff was the agent and factor of the Port Huron company, and averred the facts constituting their relationship substantially as hereinbefore set forth. In the first cause of action the plaintiff asked judgment for the amount of commission lost by it, and in the second cause of action demanded judgment for the value of the machines. The carrier retained, and still keeps, possession of the machines. The plaintiff recovered judgment for the.jprice for which the machine^ were sold. The defendant brings the casé here for review.
J. H. Richards, and C. E. Benton, for plaintiff in error; Prigg & Williams, of counsel.
George A. Vandeveer, and F. L. Martin, for defendant in error.

Opinion:
The opinion of the court was delivered by
Graves, J.:
Many assignments of error have been presented, but they; are all substantially covered by these three: (1) It is insisted that thé plaintiff has no interest in the machinery in controversy, and, therefore, cannot maintain an action for its conversion; (2) that the proper measure of damages in case of a recovery is the difference between the market value of the machinery at the time and place of delivery and the market value thereof when it in fact arrived'at such place; (3) that damages'for loss of commission ,cannot be recovered, because a sale of the property was not within the contemplation of the parties when the shipment was made.
Concerning the first proposition, there is considerable confusion among the authorities as to whether the consignee^ or consignor is the proper party plaintiff in an action agai.nst_a. carrier, but the rule that an action for the conversion of goods must be brought by the owner or one having a beneficial interest in the property converted seems to be fairly well established. (Hutch. Carr., 2d ed., § 731-734; 6 Cyc. 510; Wood's Browne, Carr. § 599.) The consignee is always presumed to possess the necessary ownership, until the contrary is shown. (Ray, Carr, of Freight, 1006; Griffith v. Ingledew, 6 S. & R. [Pa.] 429, 9 Am. Dec. 444; Smith v. Lewis, 3 B. Mon. [Ky.] 229; Arbuckle v. Thompson, 37 Pa. St. 170; The Pennsylvania Company v. Poor, 103 Ind. 553, 3 N. E. 253.) The ownership need not be extensive, and an agent, factor, broker, bailee or other person having rights in the property to be protected may maintain an action, and recover both for himself and the general owner. (Chamberlain v. West, 37 Minn. 54, 33 N. W. 114; Harrington v. King, 121 Mass. 269; Finn v. Western Railroad Corporation, 112 Mass. 524, 17 Am. Rep. 128; Green v. Clarke, 12 N. Y. 343; Bost. and Me. R. R. Co. v. Warrior Mower Co., 76 Me. 251.) We think the plaintiff in this case, had sufficient interest in the property to enable it to maintain this action. In the case of Bost. and Me. R. R. Co. v. Warrior Mower Co., supra, a case very similar to this, the court.said:
"Ordinarily when a plaintiff sustains his action it is presumed that the whole amount of damages recovered will belong to him. In fact, the injury to him or to his property is the measure of the damages. But while this is the general rule there are exceptions, not to the extent or measure of damages, but to the interest the plaintiff may have in them. It is true that an action cannot be maintained unless the plaintiff has an interest in the subject-matter of the suit, but he may do so when he is not interested to the full extent of the damages to be recovered. Such are the familiar cases of injury to property in which there is a general and special owner, as bailor and bailee, consignor and consignee, principal and factor. In such cases the action may not be brought in the names of the two jointly, but may in the name of either. In the action now in question the subject-matter was mowing-machines and parts of mowing-machines. The damage claimed rests upon a neglect of the carrier by which the property was improperly delayed in its transit. The facts show that the title to the property was in the mower company; that it had consigned and forwarded the machines to Dunham by virtue of a contract under which Dunham was to sell them for a specified commission and account to the company for them at a specified price. Dunham was also to pay the freight. This contract, while it did" not change the title in the machines and pieces, gave Dunham such a special property in them as to enable him to maintain the action in his own name, and the consignment and forwarding [of] the property, thus setting it apart and putting it into the hands of the carrier for his benefit, gave him a constructive possession sufficient for that purpose; and as the injury was the result of a single wrongful act to the whole property the damage could not be apportioned but must all be recovered in that one action, the judgment in which would be conclusive against any suit by the general owner. . . . Hence Dunham, in his suit, is entitled to recover not only his own damages but such as have accrued to the mower company as general owners. The measure of damages as held by the court in that case can be applicable upon no other theory. If, then, Dunham should receive the whole damage recoverable in his suit, he would be entitled to retain his own share, and the balance he would hold as trustee for the mower company." (Pages 259, 260.)
In the case of Southern Express Company v. Armstead, 50 Ala. 350, it was said:
"The consignee of goods has a right to sue for their loss by the carrier, notwithstanding another party may be the owner of them. The obligation is to deliver to him. Generally the property vests in him by the mere delivery to the carrier. Although the absolute or general owner of personal property may support an action for any injury thereto, if he have the right of immediate possession, this does not necessarily devest the right Of the consignee to sue, notwithstanding he has never had the actual possession." (Page 352.)
A judgment in favor of the plaintiff can work no harm, as it would be a bar to an action for the.same injury by the Portf Huron. company. (White et al. v. Bascom et al., 28 Vt. 268; Green v. Clarke, 12 N. Y. 343; Harker, et al., v. Dement, 9 Gill [Md.] 7, 52 Am. Dec. 670; Little v. Fossett, 34 Me. 545, 56 Am. Dec. 671.) The plaintiff holdsin.-trustfoiL-the Port Huron company whatever remains of the amount recovered, after payment of its commission. (Chamberlain v. West, 37 Minn. 54, 33 N. W. 114; Finn v. Western Railroad Corporation, 112 Mass. 524, 17 Am. Rep. 128; White et al. v. Bascom et al., supra; Little v. Fossett, supra.)
A consignee has the right to withhold a freight bill, when its damages exceed that amount, and in such a case the refusal of the carrier to deliver .the goods.until the--freight is paid amounts to a conversion. (5 A. & E. Encycl. of L. 232; Miami Company v. Railway Company, 38 S. C. 78, 16 S. E. 339, 21 L. R. A. 123, 55 Am. & Eng. Rld. Cas. 688; 6 Cyc. 497; Railway Co. v. Goodholm, 61 Kan. 758, 60 Pac. 1066.) The measure of damages' is compensation for the injury sustained. An amount which will place the injured party in the same condition he would have occupied if no loss had 'occurred will satisfy this requirement. If in this case the machinery had been delivered according, to contract, the price for which it had been sold would have been realized. Out of this amount the commission dqe the plaintiff would have been deducted. The freight would have been paid by the purchasers of the machinery. The selling_4niice_at — the--plaee--of "delivery seems, therefore, to be the true measure of damages. We think the amount recovered in the' district court fairly compensates all parties for the losses sustained. Out of this amount the plaintiff will retain a sum equal to the commission lost, and múst account to the Port Huron company for the remainder.
Finally, it is insisted that a sale of the machinery was not within the contemplation of the parties at the time of shipment, and, therefore, the commission is not a proper element of damages. . A railroad company must be held to know facts familiar to ordinary people. It is fair to assume that a carrier of thrashing-machines knows what they are used for, and that the only purpose implement dealers have in shipping such property into the heart of a great wheat country is to sell it. When a shipment of thrashing-machines is made in June of any year, the inference follows that, if they are not already sold, an immediate sale is intended. We think, therefore, that the loss of a commission is not so remote as to be excluded as an element of damages in this case.
SYLLABUS BY THE COURT.
Railroads — Injury to Goods in Transit — Carrier's Lien — Conversion. Where a common carrier becomes liable to the consignee of goods for injury to property while in transit, and the amount of the damages occasioned by such injury equals or exceeds the freight bill on the damaged goods, the lien of the carrier is thereby extinguished, and the consignee is entitled to the possession of such goods without payment of freight; and in such a case the refusal of the carrier to deliver the goods to the consignee upon demand constitutes a conversion.
The general rule that damages caused by the loss of a sale not ypthin- the contemplation of the parties cannot be recovered has no application to the facts here shown. No error appearing, the judgment of the district court is affirmed.
All the Justices concurring.