Case Name: The New York, Lake Erie and Western Railroad Company, Appellant, v. The National Steamship Company (Limited), Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1893-01-17
Citations: 137 N.Y. 23
Docket Number: 
Parties: The New York, Lake Erie and Western Railroad Company, Appellant, v. The National Steamship Company (Limited), Respondent.
Judges: 
Reporter: New York Reports
Volume: 137
Pages: 23–29

Head Matter:
The New York, Lake Erie and Western Railroad Company, Appellant, v. The National Steamship Company (Limited), Respondent.
(Argued December 20, 1892;
decided January 17, 1893.)
Plaintiff was a member of an association of land carriers which was engaged with defendant, an ocean carrier, in transporting cotton from Texas to England on a through bill of lading. The freight charge was by agreement divided between the association and defendant, in certain specified proportions, and the share of the former by agreement between its members was divided between them in the same manner. Each member on receiving goods from another, paid to the latter its proportion of the freight charges and the amount advanced by it, if any, to the member from which it received them. Plaintiff the last land carrier transported the goods to New York and delivered them upon a pier where defendant’s steamers loaded. By the terms of the through bill of lading the entire freight was to be collected by defendant on delivery of the goods to the consignees in Liverpool, and under it, until such delivery, no duty was imposed on defendant to pay the land carriers their proportion. A consignment of cotton was delivered by plaintiff upon the pier and while there, without fault of either party, was destroyed by fire. Defendant gave to plaintiff a special bill of lading which expressly stipulated for exemption from losses by fire before loading in its steamer. In an action to recover of defendant the land carrier’s proportion of the freight charges, it appeared that, neither by any agreement nor by custom, did defendant become liable for the land charges until goods were laden upon the vessel, at which time it was the custom to make out the bill for the freight and insure the goods; insurance never being effected by defendant while the goods were on the pier. Held, that the action was not maintainable; that possession on shipboard was a condition precedent to any liability on the part of defendant for the land charges.
Appeal from judgment of the General Term of the Supreme Court in the first judicial department, entered upon an order made December 31, 1891, which affirmed a judgment in favor of defendant entered upon a verdict directed by the court.
This action was brought by plaintiff, a railroad company, to recover from defendant, a steamship company, the sum of $1,647.94, with interest from January 29, 1883, for freight charges paid and earned by plaintiff on certain bales of cotton shipped from Gainesville, Texas, to New York, on a through shipment to Liverpool.
The facts, so far as material, are stated in the opinion.
Geo. Bethune Adams for appellant.
The question of liability was one of the fact arising out of the circumstances of the case, and should have been submitted to the jury. (Weil v. D. D., etc., R. Co., 119 N. Y. 147; Justice v. Lang, 52 id. 323; Powell v. Powell, 71 id. 71; Hart v. H. R. B. Co., 80 id. 622.) The liability for the advance charges under the circumstances disclosed in this case is clear both on principle and authority. (Hutchinson on Carriers, 478; O. S. L. & U. N. R. Co. v. N. P. R. Co., 51 Fed. Rep. 465-478; Knight v. P. & W. R. R. Co., 13 R. I. 572; B. & O. R. R. Co. v. A. E. Co., 22 Fed. Bep. 32; Dart v. Ensign, 47 N. Y. 619; Ackerman v. Redfield, 9 Hun, 378; Elwell v. Skiddy, 77 N. Y. 282.) The clause in the bills of lading relating to loss by fire or. other casualty did not apply to the demand in suit. (Maghbee v. C., etc., R. R. Co., 45 N. Y. 514; M., etc., Co. v. C., etc., Co., 54 id. 197.)
John Chetwood for respondent.
By the terms of the bill of lading the freight, being entire for the whole distance, was not due or payable until the delivery of the goods at Liverpool. (Merrick v. Gordon, 20 N. Y. 93; N. Y. C. R. R. Co. v. S. O. Co., 87 id. 486; Hopper v. Sage, 112 id. 534; Bank of Commerce v. Bissell, 72 id. 625.) Appellant made a contract by the through bills of lading which expressly exempted respondent from liability for loss by fire while in deposit or places of transshipment, at sea, in craft or on shore, before lading or after unlading. (N. Y., L. E. & W. R. R. Co. v. N. S. S. Co., 62 Hun, 621.) A party to be bound by a local usage of a particular trade or profession must be shown to have knowledge or notice of its existence. (Walls v. Bailey, 49 N. Y. 464; Allen v. M. Bank, 22 Wend. 222; Stoney v. F. T. Co., 17 Hun, 581; Sipperly v. Stewart, 50 Barb. 68; Higgins v. Moore, 34 N. Y. 423; Hopper v. Sage, 112 id. 534.) The exception to the question whether any notice was given to defendant of any lien on the goods is without merit. (Dart v. Ensign, 47 N. Y. 619; Williams v. Guile, 17 id. 347.)

Opinion:
Maynard, J.
In November, 1882, the plaintiff was a member of a pool or association of land carriers, which was engaged with the defendant, an ocean carrier, in the joint undertaking of transporting cotton from Gainesville, Texas, to Liverpool, England. The freight charge to the shipper or consignee was entire, but by an agreement among the carriers, it was divided between the association and the defendant in the ratio of twenty-five to seven. The respective projtortions which the sevral members of the association were entitled to receive for the land carriage was also fixed by an agreement between them. It is assumed that the shippers were not liable for the freight charges, but they were to be collected from the consignee upon delivery of the goods at the port of destination. The agreement for shipment consisted of a through bill of lading, which, in terms, so required, and by the rules of commercial law, the carriers had a lien upon the property for the freight until it was paid, and in default of payment they could withhold delivery, and sell the cotton for the satisfaction of their charges. The carriers also had an insurable interest in the goods to the extent of their lien, and they thus had the means of complete indemnity against loss, in case of the insolvency of the consignee or the destruction of the property m trcmsitu. The particular consignment involved in this action was a shipment of two hundred and sixty-six bales of cotton on November 15, 1882, which was delivered to the defendant January 22, 1883, upon the pier at New York, where its next steamer for Liverpool was to load. Before the lading of the vessel, and while the cotton was upon the pier, it was burned, presumably without the fault of either of the parties to this action. By an agreement between the land carriers, each company upon receipt of the goods, or at the next settlement day thereafter, paid to the company from which the goods were received its proportion of the freight charges and the amount advanced by it to the company from which it had received the goods. The plaintiff was the last carrier by land, which received the goods and transported them to Rew York and delivered them upon the pier for carriage by the defendant. It had therefore paid or earned the land carrier's proportion of the entire freight which amounted to $1,647, and it claims that immediately upon the delivery of the cotton upon the pier at Rew York for shipment by the defendant, the latter became bound as upon a contract obligation to pay that sum to it. The only written agreement to which the parties assented is contained in the through bill of lading and the special bills attached and we fail to find in them any provision from which any such obligation can be implied. On the contrary they inferentially refute the existence of a liability of this kind. By the terms of the through bill of lading the entire freight was to be collected by the defendant upon the completion of the carriage of the goods and their delivery to the consignees at Liverpool. Until that had been accomplished the written contract imported no duty either express or implied on the part of the defendant to reimburse the land carriers for their share of the cost of transportation. It also appears from the special bill of lading given by the defendant to the plaintiff that it expressly stipulated for exemption from liability for all damage, loss, or injury arising from fire before loading in the ship in terms so comprehensive as to include, not only the owner, but every person like the plaintiff who had a special interest in the property by way of lien for services rendered.
The plaintiff in fact concedes that there is nothing in the bills of lading which imposes the liability upon the defendant, which it is attempting to enforce, but it insists that there was a prevailing custom or usage in this class of business of such long standing and so generally recognized that it implied an agreement on the part of each carrier immediately upon the receipt of the goods to assume a liability to pay all the charges previously earned or paid by the company from which. they were received. All the evidence given upon the trial related to this usage, and the only exception reviewable upon this
appeal, pertains to the refusal of the trial judge to submit the question to the jury whether the evidence did not establish a contract on the part of the defendant based upon this usage, to pay plaintiff for the advance charges and freight earned upon the delivery of the goods by the plaintiff to the defendant. There was a substantial agreement in the testimony of all the witnesses upon this subject and we do not think that it was properly susceptible of any conflicting inferences. We fail to find in it any proof of a usage or agreement to become liable for the accrued freight charges upon delivery of the goods upon the pier. Whatever may be the custom in this respect between land carriers, there is an entire unanimity in the statements of all the witnesses upon both sides to the effect that the steamship companies never engaged to become liable for the land charges until the goods had been laden upon the vessel, at which time it was their custom to ascertain the quantity and make out the bill for the freight and insure the goods for the voyage. Insurance was never effected by the steamship company while the goods were lying upon the pier. This usage was so inflexible that if the steamship company could not carry the entire consignment by one vessel and the goods were divided and carried by different vessels sailing at different times, separate bills were made for each part as the vessel carrying it sailed, and payment was made for each separately and in no case until after it was upon shipboard. It appears from the evidence of plaintiff's general freight agent that when these through bills of lading were first adopted the shipments were taken immediately from the plaintiff's barges and put on the vessels, and if there was delay in shipment the property lay upon the plaintiff's docks until it could be loaded upon shipboard, and there could then be no occasion for any dispute as to liability for advance charges. But as the volume of the business increased, additional storage capacity was required, and the goods would be transferred to the steamship company's piers to await the company's convenience for shipment. Their obligation would seem to have been to take the goods by the first vessel not otherwise engaged, and the storage upon their piers was evidently in the first instance permitted for the convenience of the railroad company. It also appears by the evidence of the same witness that the steamship company originally charged a commission for advancing the amount of the back charges before the collection of the freight at Liverpool; and it was finally agreed that the rate of exchange should be fixed at 4.80 which would afford the steamship company a margin in lieu of the commissions and of the expense of insuring the amount of the back charges during the voyage.
It is therefore apparent that possession on shipboard was always regarded as a condition precedent to the existence of any liability on the part of the ocean cefhier for the land charges, and the case is destitute of any competent proof to establish an agreement or usage which would obligate the steamship company to pay while the goods were still at the pier. Every witness disclaims knowledge of any such custom, and in the long course of business proven extending over a period of twenty years and upwards not a single instance is shown where payment has been demanded or expected before the goods were put upon the vessel, or where payment has been made unless they were actually on board the ship. It is claimed by plaintiff's counsel that the Inman line of steamers paid the advance charges upon some bales of cotton lying upon their pier which were destroyed by fire at the same time with the cotton upon defendant's pier, but the evidence does not sustain the claim. The cotton upon the Inman pier was only damaged and not destroyed. A survey was called for and the cotton sold for the account of whom it might concern and some $400 realized. The insurance company which had paid the loss to the owners ascertaining that this money was in the hands of the agents of the Inman line made claim to it and it was paid over to them without any deduction for the freight charges which amounted to $62. Subsequently the railroad company notified the Inman line that the back charges had not been paid, and the Inman company notified the insurance company which refunded the amount and it was paid over to the railroad company. The transaction cannot be construed as a recognition by the steamship company of a liability to pay the back charges while the goods were lying upon the pier, but rather to the contrary. It seemed to indicate that it was the understanding of all the ¡sarties that the charges Were a hen upon the goods which must first be paid out of the proceeds of their sale, and that the lien of the railroad company was not lost by the delivery of the goods to the steamship company upon the pier but continued until the charges had been actually paid. As the contract for shipment was entire each carrier had a lien upon the goods for his unpaid freight until they were delivered to the consignee, and the possession of any carrier engaged in the joint enterprise would be deemed the possession of any other carrier whose proportion of the freight charges had not been paid so far as might be required to support the lien therefor.
We think the case was properly disposed of at the Circuit and that the judgment and order should be affirmed with costs.
All concur.
Judgment affirmed.