Court Opinion

ID: 3595495
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:43:02.57584+00
Date Added: 2024-06-11T07:45:33.017748
License: Public Domain

An owner of poultry in Oklahoma consigned its own property to itself in New York. While the goods were in transit it directed delivery of its property to this defendant. The defendant was a commission merchant and did not own the poultry. The real owner clothed the defendant with no appearance of title. It did not transfer to the defendant the bill of lading. The owner's direction to deliver was merely the exercise of dominion over his own property.
The railroad company delivered the poultry to the defendant. The defendant paid the transportation charges, then demanded, and accepted delivery of the poultry. After defendant sold the poultry and accounted to the owner for the proceeds, the railroad company discovered that through error on its part it had failed to demand the full lawful charges before it delivered the goods. The defendant has been held liable for the unpaid charges.
At common law the defendant would not have been liable for the unpaid charges. (Elwell v. Skiddy, 77 N.Y. 282, 289; Dart
v. Ensign, 47 N.Y. 619; Davison v. City Bank, 57 N.Y. 81.) The bill of lading provides that "the owner or consignee shall pay the freight and all other lawful charges accruing on said property." Such provision becomes binding upon the owner or consignee who adopts the provision of the contract of carriage by accepting delivery of the goods and the benefit of the carriage. (Merian v. Funck, 4 Den. 110; Hinsdell v. Weed, 5 Den. 172, 178; Davison v. City Bank, supra, 86; Penn. R.R. Co.
v. Titus, 216 N.Y. 17.) Here the defendant was not, however, the owner, nor was he the consignee named in the bill of lading. *Page 251 
Under the United States statutes regulating interstate commerce, the liability of a consignee for the payment of freight charges rests upon a broader basis than at common law. (Pittsburgh, etc., Ry. Co. v. Fink, 250 U.S. 577.) Until the recent amendment of the Interstate Commerce Act (Statute of March 4, 1927, chapter 510, sec. 1), even though the carrier had notice that the consignee was in fact only the agent of the owner, yet acceptance of the goods "amounted to an assumption by the consignee to pay the only lawful rate it had the right to pay or the carrier the right to charge." (New York Central  HudsonRiver Railroad Co. v. York  Whitney Co., 256 U.S. 406.) The question still remains whether the defendant is a "consignee" within the meaning of the Interstate Commerce Act, or the decisions of the Supreme Court defining liability thereunder.
In New York Central  Hudson River Railroad Company v. York Whitney Co. (supra) the defendant who by accepting the goods "assumed" the obligation to pay all lawful charges was, it is true, not named as consignee under the bill of lading, which constituted the original contract of carriage. The defendant was, however, thereafter named as consignee by the shipper and the waybills were so marked. The original bill of lading then was superseded. If the original consignee had any rights to the goods, the railroad company no longer recognized them. The carrier agreed with the shipper to transport the goods to the defendant named as consignee in the waybills. The defendant could demand and receive delivery of the goods under the terms of the contract of carriage. The defendant's rights there flowed directly from the carrier's contract to transport the goods to it. They were in no sense different from what they would have been if the defendant had been named as consignee in the original contract. When the defendant received delivery of the goods under the carrier's contract, it adopted the terms of the contract. *Page 252 
There was no room for distinction between the defendant in that case and a consignee named as such in a bill of lading, and the court was not even urged by counsel to attempt such a distinction.
Here the facts are different. Under the contract of carriage the consignor maintained full dominion over the goods. The defendant obtained no rights under that contract and asserted none. The owner exercising the dominion with which it had never parted directed delivery to the defendant. The defendant was not the apparent owner. Its position was equivocal, and at least as consistent with the view that in accepting delivery it was acting merely as agent for the owner as that it was the owner itself. To obtain the release of the carrier's lien, the defendant paid the charges demanded. The owner or consignee under the bill of lading still remained liable for any lawful charges not demanded at that time. (New York Central R.R. Co. v. Ross Lumber Co., 234 N.Y. 261. ) The owner or consignee, until the moment of delivery to this defendant, might have exercised its right of dominion by changing the direction to deliver to the defendant. The rights of the defendant were derived from and subordinate to the rights of the consignee named in the contract, and the analogy between them seems to me illusory. The consignee receiving the goods under a right created by the contract of carriage must be held to assume all the obligations of the contract of the carriage from which his rights are derived. The defendant, acting in equivocal or undisclosed capacity and receiving the goods solely by the direction to deliver of the person who had reserved dominion over the goods, assumes no personal obligation under the contract of carriage when in fact he acted only as agent for the owner or consignee.
POUND, ANDREWS and O'BRIEN, JJ., concur with CRANE, J.; CARDOZO, Ch. J., concurs in result; LEHMAN, J., dissents in opinion in which KELLOGG, J., concurs.
Judgment affirmed. *Page 253