Opinion ID: 2081309
Heading Depth: 1
Heading Rank: 2

Heading: liability of carriers inter se

Text: 6. We need not determine which carrier was initially liable to plaintiff in this case for the reason that the liability of the carriers inter se has been placed in litigation by their cross complaints against each other. It is enough to determine here who would ultimately be liable for the loss which occurred by misdelivery of the shipment. Under the so-called Carmack Amendment (34 Stat. 593, 49 USCA, § 20[11, 12]) the shipper may look to the initial carrier for any loss occurring during the transportation of an interstate shipment. [5] The bill of lading issued by the original carrier governs the entire transportation. [6] However, in this case the motion of the initial carrier (Northfield Railway) for summary judgment was granted by the trial court on a finding     that the surrender of the original Order Bill of Lading issued by the Minneapolis, Northfield and Southern Railway Company, by the plaintiff through its agent, R.L. Hascall, and securing an exchange or substitute Order Bill of Lading from the Chicago, Rock Island and Pacific Railway Company wherein the destination of said shipment was changed and the Notify Party was changed constituted such a change in the contract of shipment as set forth in said Bills of Lading as to establish that the plaintiff is not entitled to relief as against the defendant Minneapolis, Northfield and Southern Railway Company. In effect, the court held that the contract with Northfield Railway was cancelled and a new contract entered into with Rock Island. No appeal has been taken from the judgment entered pursuant to that order so we must assume for the purposes of this opinion the correctness of the decision. As a result, it must follow that a new contract came into being when the new bill of lading was issued by Rock Island and that henceforth it was the initial carrier. [7] 7. The liability of the carriers inter se presents the most difficult problem in this case. The solution of the problem lies in the determination of responsibility for the act or acts which caused the misdelivery. In passing upon that question it is necessary to relate in more detail the facts respecting the diversion of the shipment. Originally the shipment was delivered to Northfield Railway and it issued an order bill of lading in which Freshmaster was consignor. The carriers had been advised, however, that plaintiff actually was the shipper. The shipment was consigned to Order of Peerless Appliance    Rochester    New York    Notify Peerless Appliance    1172 Dewey Avenue Rochester    New York. (Italics supplied.) The freight waybill, which is the only instrument which physically accompanies the shipment, was prepared by Northfield Railway on its printed form. The shipping instruction on the waybill was as follows: Order of PEERLESS APPLIANCE NTFY PEERLESS APPLIANCE 1172 DEWEY AVENUE (Italics supplied.) Two or three days after the shipment had started on its way, plaintiff received instructions from Freshmaster to divert the shipment to Clinton Builders Supply Corporation at Syracuse, New York. Plaintiff's credit manager, Robert L. Hascall, then called the Minneapolis office of Rock Island, in whose possession the car then was, and ordered the diversion pursuant to instructions he had received from Freshmaster. The original bill of lading issued by Northfield Railway was retired, and a new bill of lading was issued by Rock Island under which the shipment was consigned to Order of Freshmaster Corporation    Notify Clinton Builders Supply Corp.    549 S. Clinton St. Syracuse    New York. (Italics supplied.) The shipment thus continued on an order bill of lading. The Rock Island freight agent at Minneapolis telephoned and wired the diversion instructions to its agent at Manly, Iowa, where the shipment was intercepted. Claude E. Wendt, the Rock Island yard clerk at Manly, Iowa, testified that he personally handled the diversion of this car by making handwritten alterations on the original freight waybill to show a reconsignment to: Freshmaster Corp Notify Clinton Builders Supply 549 Clinton St Syracuse New York. The words order of were omitted from the name of the consignee in the waybill as so altered. Mr. Wendt admitted that these shipping instructions which accompanied the freight car superseded the previous typewritten instructions and did not indicate that the shipment was subject to an order bill of lading and that, as far as anyone could tell from the waybill, the shipment could have been on a straight bill of lading. He stated that if he had known that the shipment was traveling on an order bill of lading he would have written on the waybill In Order of the Freshmaster Corporation. He further testified that the words in order of are crucial words in determining from a waybill whether the shipment is traveling on an order bill of lading or a straight bill of lading. In addition to the testimony of Mr. Wendt, New York Central called as its witness Orie M. Noel, a retired freight cashier of the Minnesota Transfer Railway, who had been employed by that railway for nearly 51 years. He testified generally with respect to the procedure followed by railroads in handling order-bill-of-lading and straight-bill-of-lading shipments and the effect of instructions contained in the freight waybill. It was his testimony that the absence of the words order of from a waybill would indicate that the shipment was subject to a straight bill of lading. In viewing the waybill involved here, he stated that there was nothing on the waybill which would indicate that it was subject to an order bill of lading and that an agent of a railroad presented with such a situation would be justified in making delivery of the shipment as if it were traveling on a straight bill of lading. It may be conceded that ordinarily a carrier may not deliver a shipment of goods to a party whom it is directed to notify without surrender of the bill of lading, [8] since the mere fact that such party is to be notified usually is insufficient to give it the right to such shipment in and of itself. However, in this case, there is no dispute between the consignee (Freshmaster) and the notify party (Clinton Builders Supply). Clinton Builders Supply paid Freshmaster in full for the shipment, so the case stands the same as if delivery had been made to Freshmaster. If the shipment had been made on a straight bill of lading, the carrier would have been justified in delivering to Freshmaster, the consignee, without surrender of the bill of lading. The question posed here therefore is: Is the freight bill prepared by Rock Island in such form that New York Central would be justified in assuming that the shipment was consigned on a straight bill of lading? New York Central contends that, inasmuch as it delivered the goods according to the instructions received from Rock Island in the waybill, it is not liable to Rock Island. The question involving the conclusiveness of a waybill in dealings between connecting carriers was argued in Victor Produce Co. v. Chicago, St. P.M. & O. Ry. Co. 135 Minn. 49, 160 N.W. 201, but was not decided for the reason that the case was not tried on the theory that the waybill absolved the connecting carrier of liability. In some other jurisdictions it has been held that when a connecting carrier transports goods in accordance with instructions communicated to it in a waybill issued by the initial carrier which are contrary to the shipper's instructions, the carrier who complies with such waybill is not liable to the initial carrier for loss which such carrier may have to pay the shipper. In Hayman v. Canadian Pac. Ry. Co. 43 Misc. 74, 75, 86 N.Y.S. 728, 729, the court said:    As a succeeding carrier never sees the bill of lading till it is surrendered and a delivery of the goods made, the waybill is a complete defense   . In Chartrand v. Southern Ry. 85 S.C. 479, 482, 67 S.E. 741, 743, the court said:    The mere delivery of the goods to the next [carrier] in line is not enough to discharge the initial carrier from liability, but he must show that the delivery was accompanied with proper shipping instructions, or at least such as he received from the shipper, so that the carrier receiving them can forward them to destination.    `   if the instructions are omitted from the shipping bills the initial carrier is responsible for the failure of the next line to know of them.' See, also, Briggs v. Boston & Lowell R. Co. 88 Mass. (6 Allen) 246, 83 Am. D. 626. We think that the correct rule is that, when a shipment of goods is delivered to an initial carrier to be transported over its facilities and those of other connecting carriers, it is the duty of the initial carrier to notify the connecting carriers of the method of transportation and manner of delivery which are essential to enable the connecting carrier to receive, transport, and deliver the goods according to the contract with the shipper. [9] This includes the duty to notify the connecting carrier whether the goods are being transported on an order bill of lading or a straight bill of lading so as to apprise the terminal carrier whether the goods can be safely delivered without procuring a surrender of the bill of lading. [10] Rock Island relies mainly on Southern Express v. T.S.C. Motor Freight Lines (5 Cir.) 200 F. (2d) 797. While there are some similarities between that case and the one now before us, there are also some distinguishing facts which we think make it inapplicable. In the first place, that case did not involve an action between the initial carrier and the terminal carrier. While we have noted above that Rock Island contends that it is a connecting carrier, it should be borne in mind that, after a diversion of this shipment, it was traveling on a bill of lading issued by Rock Island and on a freight waybill altered by it. Neither does the Southern Express case involve the question of whether the terminal carrier was liable. It seems to be conceded in the opinion that the terminal carrier was not liable. Liability was imposed upon the initial carrier, and it sought to recover from a connecting carrier for what it considered to be the negligence of the connecting carrier in preparation of an intermediate waybill. It is not clear just what was contained in the waybill, but the court did find that the waybill was in such form that it carried sufficient information on its face to apprise the carriers of the fact that the shipment was not to be delivered without surrender of the bill of lading. The trial court in the case before us found just the contrary. In attempting to apply the decision in the Southern Express case to the facts now before us we must keep in mind all the facts. Here, the words order of preceding the name of the consignee in the waybill as originally prepared were stricken. While it does not appear who drew lines through the words order of, the words are stricken and, in addition to that, in the space provided for the name of the consignee upon reconsignment, the words order of are completely omitted. It would seem that in view of all the facts the court was justified in holding that Rock Island was responsible for the alteration of the waybill upon a diversion of the shipment and that, as the waybill reached New York Central, it was justified in assuming that the goods were then traveling on a straight bill of lading; consequently, it should follow that Rock Island must stand the loss. Rock Island also complains of the trial court's failure to make certain findings of fact. We have examined this claim and deem it sufficient to say that the findings are sufficient to present the material issues involved in the determination of the ultimate rights of the parties. Affirmed.