Case Name: Herbert Neustadt, Individually and as Executor, etc., of Otto Neustadt, Deceased, Comprising the Copartnership Firm of Neustadt & Company, Plaintiffs, v. Lehigh Valley Railroad Company and New York Dock Company, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-12-19
Citations: 159 A.D. 667
Docket Number: 
Parties: Herbert Neustadt, Individually and as Executor, etc., of Otto Neustadt, Deceased, Comprising the Copartnership Firm of Neustadt & Company, Plaintiffs, v. Lehigh Valley Railroad Company and New York Dock Company, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 159
Pages: 667–675

Head Matter:
Herbert Neustadt, Individually and as Executor, etc., of Otto Neustadt, Deceased, Comprising the Copartnership Firm of Neustadt & Company, Plaintiffs, v. Lehigh Valley Railroad Company and New York Dock Company, Defendants.
First Department,
December 19, 1913.
Carriers—liability of consignee for car service and track storage — provisions of tariff rules of Lehigh. Valley Railroad Company construed — extinguishment of lien of railroad company — destruction of flour while stored in warehouse — presumption of negligence — res adjudicata — prior ruling of Interstate Commerce Commission on similar controversy.
A carload of flour, consisting of 350 sacks shipped via the defendant’s railroad, with instructions to notify plaintiffs on arrival, arrived at the defendant’s Jersey City terminal on September 37, 1910, and plaintiffs were duly notified. Prior to said date plaintiffs ordered 310 sacks to Martin’s siding at Jersey City. On October nineteenth the defendant pursuant to directions from the plaintiffs, removed the remaining 140 sacks to the Atlantic terminal of the dock company, defendant’s agent, and duly notified plaintiffs of their arrival. The car was thereupon placed upon the delivery tracks of the terminal awaiting the removal of its contents by plaintiffs. They did not receive the arrival notice, and rested under the belief that when the flour arrived it would be warehoused by the defendant and believed that this had been done until December twentieth, when they were notified by the dock company that the car was on hand unclaimed, and subject to accruing car service and track storage charges. On the same day plaintiffs declined to pay the accrued charges at this rate on the ground that under the tariff rules the flour should have been warehoused, and not permitted to remain in the cars subject to such charges, and tendered the amount of storage and other charges computed according to their construction of the tariff rules and demanded the 140 bags, which demand was refused. The flour was left in the car in the terminal yard until January, 1911, when the dock company, acting under orders of the defendant, removed it to one of its warehouses, where it was later destroyed by worms.
Provisions of the tariff rules which were a part of the contract for transportation construed, and held, that the plaintiffs had the right to assume that on arrival of the 140 sacks, a part of a carload, at the Atlantic terminal, the flour would be held free of storage for three days, and if not then removed would be stored in a warehouse at plaintiffs’ expense, and that upon the refusal of the defendant to deliver possession of the flour upon a tender of charges offered by the plaintiffs its lien was extinguished and it became liable either in replevin or trover. As there were no facts from which an inference could be drawn that the destruction of the flour was due to any inherent condition thereof, rather than to dampness, or some cause arising from a defect in the place of storage, there was a presumption of negligence on the defendant’s part.
A ruling by the Interstate Commerce Commission upon a similar controversy over a prior shipment of flour is not res adjudicaba.
Submission of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.
John J. Schwartz [David Burr Luckey with him on the brief], for the plaintiffs.
Stewart C. Pratt, for the defendants.

Opinion:
Hotchkiss, J.:
Prior to October 26, 1910, the Cambridge Milling Company shipped from Cambridge, Minn., to New York, via the defend ant railroad company, a carload consisting of 350 sacks of flour, consigned to order, with instructions to notify plaintiffs on arrival. The flour arrived at the railroad's Jersey City terminal on September twenty-seventh and plaintiffs were duly notified. Shortly prior to September twenty-seventh plaintiffs ordered 210 sacks to Martin's siding, at Jersey City, and paid accrued freight charges on the entire 350 sacks. On October nineteenth the railroad company pursuant to directions from plaintiffs removed the remaining 140 sacks to the Atlantic terminal of the dock company (defendants' agent). The sacks arrived at the terminal October twenty-sixth and plaintiffs were duly notified. The car was thereupon placed upon the delivery tracks of the terminal awaiting removal of its contents by plaintiffs. Apparently plaintiffs did not receive the arrival notice and for some unexplained reason were unaware of the actual arrival of the car or of its presence on the delivery tracks after the free days mentioned in paragraph 1 of the rules hereinafter quoted. Plaintiffs rested under the belief that when the flour arrived it would be warehoused by the railroad company, and they apparently believed that this had been done until December twentieth, when they were notified by the dock company that the car containing the flour was on hand unclaimed and subject to accruing car service and track storage charges. On the same day plaintiffs declined to pay accrued charges at this rate, on the ground that under the aforesaid rules the flour should have been warehoused and there held and not permitted to remain in the cars on the terminal tracks subject to car service and track storage charges. The dock company declined to accede to this view and refused delivery of the flour until the charges demanded were paid. On the same day (December twentieth) plaintiffs tendered the amount of all storage and other charges computed according to their construction of the rules, and demanded the 140 bags, which demand was refused. Thereafter, and prior to March 29, 1912, plaintiffs repeated their tender and demand, which was refused, although the defendants at all times expressed willingness to surrender the flour on payment of the charges claimed by them to be due. The 140 bags were left in the car in the terminal yard until January 27, 1911, on which date the dock company acting under orders from the railroad company removed the bags from the car and stored them in one of its warehouses. The interstate character of the shipment is conceded. After plaintiffs' first tender and demand for its possession and while stored in the warehouse the flour was destroyed by worms.
The defendants claim that the shipment was subject to car service and track storage charges from October twenty-fifth, when they notified plaintiffs of the car's arrival, to January twenty-seventh, when the flour was stored, and to storage charges at the same rate from January twenty-seventh to April fifteenth (a mutually agreed date), and also to certain charges, for handling, all aggregating $332.50, for which they seek a personal judgment against • plaintiffs. The rules to which reference has been made were filed with the Interstate Commerce Commission and posted as part of the railroad company's tariff, and are concededly part of the contract under which the flour was transported. They read as follows:
"Rules Regarding Storage of ' Freight at New York, N. Y., Brooklyn, N. Y., Jersey City, N. J., Jersey City (National Storage' Docks), N. J., and Jersey City (Communipaw Avenue), N. J.
"All property held by this Company, will be so held solely at owner's risk (subject to transportation, storage and other charges), under the following rules, conditions and charges: "Thése rules do not apply on Hay, Straw or Excelsior, Empty Packages, Freight in Bulk, or other Freight upon which Car Service or Elevator Storage Charges are applicable.
"1. Freight shipped direct or réconsigned to New York, N. Y., Brooklyn, N. Y., Jersey City, N. J., and Jersey City (Communipaw Avenue), N. J., for delivery to consignees at those points will be held there in our warehouses free of charge, not exceeding three days, Sundays, legal holidays and date of arrival not included. Any such freight not removed within the time specified will be stored in public warehouses at owner's cost and risk, including expense of cartage.
"3. Freight in carloads consigned direct for station delivery in New York, N. Y., or Brooklyn, N. Y., which is, at request of consignee, held at Jersey City, N. J., for orders, will be held free of charge for ten days, Sundays, legal holidays and day of arrival not included, if unloaded from cars awaiting orders; if subsequently ordered to a New York, N. Y., or Brooklyn, N. Y., station it will there be subject to the conditions of Bule 1. The entire carload must be reordered at one time and to one station.
" 9. Carload freight, which is unloaded by the Lehigh Valley Bailroad. Company for the purpose of releasing needed equipment, will be subject to storage charge the same as would have accrued under car demurrage rules and track storage charges, if any, had the freight remained in the car, which charges are provided for in I. C. 0. No. B-1461 (car demurrage rules) and page twenty-one of tariff I. C. C. No. B-4510 (track storage charges) supplements thereto and reissues thereof.
"Brooklyn Deliveries (Continued), New York Dock Company, Atlantic Terminal.
"Atlantic Terminal, Brooklyn, N. Y., Located on the water front between Hamilton Avenue and Walcott Street, Brooklyn, N.' Y. At this terminal all carload shipments of general merchandise (except as noted on pages 21 to 23) are received. This terminal is equipped with the following special facilities: A special yard for the delivery of hay at the foot of King Street. Track scale of 60 tons capacity. Crane of 8 tons capacity. Track delivery of O. L. freight.
"Bailroad tracks with two float bridge approaches for transferring cars from float to track delivery, yard, piers or warehouses. Warehouses for the storage of general merchandise as follows:
"The word 'stored' when used in the above-quoted tariff means that the freight will he removed from the car and put into warehouse, and the initials 'C. L.' and 'L. C. L.' where used therein mean a carload of freight and a less than carload of freight, respectively."
The defendants contend that the case .is governed by rule 9, which provides that "carload freight unloaded by the Lehigh Valley Railroad Company for the purpose of releasing needed equipment, will be subject to storage charge, the same as would have accrued under car demurrage rules and track storage charges, if any, had the freight remained in the car," which demurrage rules are also filed with the Interstate Commerce Commission and furnish the basis for the computation of the defendants' claim. They argue that the phrase "any such freight not removed within the time specified will be stored in public warehouses," etc., in rule 1, modifies all the preceding words in the rule, and that the true meaning of the entire rule is, that freight in less than carload lots, reconsigned to Brooklyn points where the railroad company had warehouses of its own, would, or at its election might, be stored by the company in its warehouses, if any, at such points, and that the words following rule 9, "Brooklyn Deliveries (Continued), New York Dock Company, Atlantic Terminal," etc., were notice to plaintiff that said terminal and the warehouse facilities afforded thereat were not owned by the- company and were not included in the phrase "our warehouses " found in rule 1; that there was no obligation resting upon the railroad company on the arrival of the car at the Atlantic terminal to remove the 140 bags from the car and store them in what it claims was as to it the " public " warehouse at that point, but that it had the right at its election and after notice to plaintiffs and failure on their part to remove the flour, to retain the same in the car subject to the regulation car service and track storage charges, and thereafter at anytime at its election and "for the purpose of releasing needed equipment " to unload and store the flour in a "public " warehouse at such terminal subject to charges as per rule 9. The position of the plaintiff is that the shipment came under the terms of rule 3 and thus became "subject to the conditions of Rule 1."
I cannot assent to the argument advanced by the railroad company. Without stopping to analyze all of its deficiencies, not the least among which is the unauthorized assumption of certain material facts which it may not force a shipper, at his peril, to take notice of, it seems to me to be an unnatural construction of the rules and opposed as well to their plain reading.
As I construe- the rules, in the light of the submitted facts, neither rule 3 nor rule 9 has any application. It is true that the-car itself took exactly the course provided for by rule 3. It was "consigned direct for station delivery in New York;" was "held at Jersey City, N. J., for orders," and was "subsequently ordered to Brooklyn, N. Y." But rule 3 ends with the following words: " The entire carload must be reordered at one time and to one station. " The circumstances of the ordering of the car, as distinguished from the 140 sacks, its then sole remaining contents, as stated in the submitted case, were as follows: c' The plaintiffs reconsigned and ordered the Lehigh Valley Railroad Company to forward the remaining 140 sacks of the flour to the Atlantic Terminal and accordingly the Company, acting upon the instructions so given by the plaintiffs, forwarded 140 sacks of the flour as a full carload shipment." These words described the plaintiffs as following the normal course naturally to be expected. They ordered the 140 sacks to be forwarded. They were not interested in nor had they any control over the means or details of the transfer from Jersey City to the terminal. It was the privilege of the company if it saw fit to permit the 140 sacks to remain in the original car and thus to forward them. If, however, for some reason of its own, it chose to pursue this course, and did not unload this remnant of the original carload lot and forward it in some other receptacle, I do not think it could thus force upon the shipper obligations and expenses attendant upon a full carload lot. Its claim for car service and track storage charges on account of this car amounts to three dollars per day or about three-quarters of one per cent per day on the value of the 140 sacks. A construction of tariff rules which would give to a. carrier the option so to transport cargo as to subject the same to any such rate of charge would shock the conscience. Nor does rule 9 call for any such construction. As above stated, it expressly applies to "carload freight," not to broken lots which, for its convenience, the carrier has permitted to occupy and chosen to treat as a full car. For these reasons I do not think that rule 9 applies, and for the reason that " the entire carload" was not "reordered" to the terminal by the shipper. Rule 3 is clearly inapplicable. I think the case falls under rule 1, not by force of rule 3, as plaintiffs contend, but by virtue of rule 1 itself.
The definition of " stored " as given in the last clause of the rules is, " that the freight will be removed from the car and put into warehouse."
Under rule 1, plaintiffs had the right to assume that the course of conduct therein prescribed would be followed by the company, and that on arrival at the Atlantic terminal the flour would be held free of charge for three days, and if not then removed would be stored in some warehouse at plaintiffs' expense. The submitted case is preceded by a statement of facts covering another and different shipment of flour over which a similar controversy seems to have arisen between the parties, which resulted in plaintiffs, by letter, submitting their statement of facts to the Interstate Commerce Commission. On receipt of this letter the Commission communicated its contents to the railroad company which, by letter, laid before the Commission its statement of facts and argument. The result was a letter from the Commission to plaintiffs in which they say: "It is the view of the Commission that the demurrage charges assessed were properly collectible," adding that they had no means of determining the reasonableness of these charges, and if plaintiffs wished to pursue the matter further they would have to file a formal complaint. This ruling is claimed by defendants to settle the present controversy because, as they assert, the company was bound by it, which fact, it argues, is res adjudicata of the question now submitted. That the company is wrong in this contention is too plain for argument.
• It follows that plaintiffs having on December twentieth tendered to the railroad company the full amount then properly due and demanded possession of their property, which demand was refused, the lien of the railroad was extinguished and it became liable to plaintiffs in either replevin or trover. (Cass v. Higenbotam, 100 N. Y. 248, 252.) From that moment defendants' possession was wrongful. From the submission it appears that the flour was destroyed by worms after December twentieth. Nothing is stated from which any inference can be drawn that such destruction was due to any inherent condition of the flour rather than to dampness or some cause arising from a defect in the place of storage. These facts justify a presumption of negligence on defendants' part. (Russell Mfg. Co. v. New Haven Steamboat Co., 50 N. Y. 121; Ouderkirk v. Central National Bank, 119 id. 263; Stewart v. Stone, 127 id. 500; Wintringham v. Hayes, 144 id. 1.)
The foregoing views lead to judgment for the plaintiffs for the sum of $405, the stipulated value of the flour, with interest from December 20, 1910, but, as agreed in the submission, without costs.
Ingraham, P. J., Clarke, Scott and Dowling, JJ., concurred.
Judgment ordered for plaintiffs as directed in opinion, without costs. Order to be settled on notice.