author:
Ingraham, J.
      Denio, Ch. J.

text:
    Frederick Meyer and others, Executors, &c., v. Horatio N. Peck.
    An ordinary bill of lading is not conclusive, as between the original parties, either as to the shipment of the goods named in it, or as to the quantity said to have been received; and any mistake or fraud in the shipment of the goods may be shown, on the trial.
    That part which relates to the receipt of the goods, their quality, condition and quantity, is to be treated as a receipt, and not as a stipulation of a written contract.
    A stipulation, in a bill of lading, that “any damage or deficiency in quantity the consignee will deduct from balance of freight due the captain,” will not affect this question; and will not be understood as a guaranty that the captain has received the whole quantity of goods specified; or as an agreement to pay for that portion, if any, which shall be found to be deficient, of what he has received. The words “deficiency in quantity" relate to the property shipped.
    The principle that a Iona fide indorsee of a bill of lading, advancing his money on it, may rely upon the quantity acknowledged therein, and may compel the carrier to account for that quantity, whether it was put on board the vessel or not, does not apply to a case where the owner of the property did not purchase it while it was in the hands of the carrier, and did not make title to it through the bill of lading, but his purchase was made prior to the shipment, and the goods were shipped by his agent for him.
    The testator of the plaintiffs, as assignee of a claim for freight, sought to recover from the defendant the balance due on the freight of a cargo of wheat from Buffalo to Rochester. The appellant purchased a quantity of wheat in -Buf.falo, and shipped the same on a canal boat of which the testator’s assignor was captain, to be delivered at Rochester to the defendant, on payment of four and a half cents freight per bushel. The captain signed a bill of lading for 5589 bushels received on board.- On delivery, the quantity was found to be short 124 bushels. Proof was offered to show that the cargo was in the same condition when delivered as it was when stowed on board, and that the whole amount .received at Buffalo had been delivered at Rochester. The defendant claimed a reduction from the freight for the amount of the deficiency, in pursuance of a stipulation in the bill of lading as follows: “Any damage or deficiency in quantity the consignee will deduct from balance of freight due the captain.”
    Upon the trial, the defendant requested the court to charge the jury that the bill of lading was a contract not open to explanation as to quantity, but conclusive; and that as thé captain had not delivered the amount mentioned in the bill of lading, the defendant was entitled to recoup for the deficiency. That if the jury believed the defendant had accepted and paid the draft drawn upon him, on the faith of the bill of lading, the plaintiff was estopped from showing that the whole quantity of' wheat mentioned in the bill of lading was not received, and the defendant was entitled to recoup for the deficiency. The court refused to charge as requested. The judge charged that the bill of lading was not conclusive, but was evidence to raise a presumption, which must be overcome by the plaintiff. To this charge the defendant excepted. The judge also charged that the captain might show that the quantity admitted to have been received was not received, and if the jury should so find, and that all the wheat received in Buffalo was delivered in Rochester, although less than the amount admitted, the plaintiff was entitled to recover, without any abatement on account of the deficiency. To this the defendant also excepted.

      JoJm K. Porter, for the appellant.
    I. The bill of lading in this case was special; and the receipt for the wheat shipped, being coupled with a stipulation for the deduction of any deficiency from the freight, it was “not open to contradiction, in the sense of the rule applicable to receipts proper.” (Goodyear v. Ogden, 4 Hill, 104.) 1. In the cases relied on by the respondent, the bill of lading was in the usual form, without the stipulation contained-in this for adjustment of deficiency. (Wolfe v. Myers, 3 Sandf. 7; Ellis v. Willard, 5 Seld. 530; Dickerson v. Seelye, 12 Barb. 99; Graves v. Harwood, 9 id. 477; Abbott on Shipping, 321.) 2. The fact was proved and undisputed, that by the established custom and usage, the boatmen uniformly paid the deficiency when the cargoes fell short of the bills of lading; and the special contract should be construed in harmony with the usage. 3. In the language of Chief Justice Shaw,'“a bill of lading is a contract of great importance, and is to be construed according to its terms, the subject matter, the nature of the business to which it relates, and the usages under which such business is generally conducted.” (Shepherd v. Naylor, 5 Gray, 592; see also Angell on Carriers, § 228.) 4. The carrier is free to enlarge his liability, as well as to restrict it; and when the provisions of the contract are special, effect is to be given to them in harmony with the purpose of the deviation, which in this case evidently was, to have a simple and certain rule, by which the boatmen who received the grain were to verify the" quantity and be responsible for it; so that the bill of lading would be a reliable guide to the consignee in making his payments or advances. (Harmony v. Bingham, 2 Kern. 99, 108; Mercantile Ins. Co. v. Calebs, 20 N. Y. Rep. 173; Abbott on Shipping, 247.) 5. The only case in which a bill of lading like this seems to have been passed upon is that of Wilson v. Van Santvoord, which " is briefly stated by the presiding judge, in his opinion in the case of Canfield v. The Northern R. R. Co. (18 Barb. 590.) “The bill [speaking of the Oanfield case]'is silent in respect to an adjustment for any damages or deficiencies of cargo, and liquidation out of the freight earned. In this respect this case materially differs from the case of Wilson v. Van Santvoord, (MS.) decided in this court in January, 1853, . cited on the argument. In that case, the bill of lading contained this special clause: ‘damages or deficiencies, if any, to be deducted from charges by consignees.’ The defendant xvas an intermediate consignee, to whose care the property was consigned, at Albany, for further transportation. When the cargo was delivered, there was, an ascertained deficiency of seven barrels of beef. The defendant offered to pay the balance of freight, after deducting the value of the lost beef; but the master, in behalf of the plaintiff, the owner of the boat, refused to make the deduction. It was held that the defendant was authorized to require the adjustment, and the plaintiff could not recover in the action because of his refusal. The decision was put upon the force of the terms of the bill of lading, that the deduction was made a part of the contract, and a condition of the payment of freight; that in one sense it was the duty of the consignee to insist upon the adjustment, inasmuch as the freight was made a sort of fund, to indemnify against losses. It was also held that the carrier, having delivered the property, lost his lien, and that no implied assumpsit could be alleged, because the consignee, Van Santvoord, had complied with the conditions of the bill of lading. 6. A distinction exists between a mere receipt acknowledging money paid, and a receipt containing an agreement, condition or stipulation between the parties. The latter is in the nature of a contract, and can not be varied by parol evidence.” (Niles v. Culver, 8 Barb. 205.) 7. The captain, in this case, confessedly superintended in person the weighing of the cargo, when he received it on his boat; and there was no fraud or imposition, such as might be practiced in the case of closed casks, boxes or packages, and which would perhaps open the entire contract .to explanation or correction. (Smith v. Brown, 4 Hawks’ R. 580, 585; Wakefield v. Stedman, 12 Pick. 562, 564.) 8. The court erred, therefore, in holding, on the trial, that the plaintiff was not concluded as to the quantity by the bill of lading.
    II. But if treated as a mere receipt by the carrier, he is concluded by it in respect to the defendant, who paid for the 5589 bushels on the faith of the master’s certificate in the bill of lading, that he had received that quantity for shipment to the consignee. 1. The judge was clearly wrong in holding, at the circuit, that the defendant’s vendor was his agent in shipping'the goods, and this is conceded in the opinion delivered at the general term.. 2. The fact that the defendant paid for the wheat in question on the faith of the hill of lading is undisputed; and its effect is not impaired by the circumstance that there'was another bill of lading, on the faith of which he subsequently paid for the residue of the' purchase. 3. The contract of affreightment was made between Horton, the vendor, and Pettis, the master, and if this was a mere receipt, as betioeen them, it was open to explanation' and contradiction. (Bates v. Todd, 1 Moody & Rob. 106; Abbott on Shipping, 324.) 4. But when neither the consignee nor his agent is the shipper of the property, the" bill of lading is his muniment of title, and to the extent of ¡ his payments or advances made on the faith of it he is protected, as against the carrier, equally with any other party making title under it. (Dows v. Greene, 24 N. Y. Rep. 638; Bradstreet v. Horan, 2 Blatchf. 116; Byrne v. Weeks, 7 Bosw. 372, 379.)
    III. But in any aspect of the case, as the master was the personal actor in receiving the cargo, and was certifying facts as to which he had knowledge, and the defendant had none, he is estopped from gainsaying them so far as the defendant acted on the faith of their truth. 1. This very case is put by the court in Ellis v. Willard, as a familiar illustration of the well settled principle, “A ship-owner may be estopped from alleging a deficiency in tire property shipped, as against a consignee who has advanced money upon the credit of the bill of lading.” (5 Seld. 531.) 2. The principle is illustrated in various forms in the cases arising upon bills of lading. (Dickerson v. Seelye, 12 Barb. 99; Howard v. Tucker, 20 Eng. Com. Law Rep. 478; Byrne v. Weeks, 7 Bosw. 372; Dows v. Greene, 24 N. Y. Rep. 638.) 4. If one take a security of the agent of the principal with whom he deals, unknown to the principal, and give the agent a receipt as for the money due from the principal, in consequence of which the principal deals differently with his agent on the faith of such receipt, the principal is discharged, though the security fail. . ( Wyatt v. Marquis of Hertford, 3 East, 147.) 5. The estoppel applies, not upon the ground of fraud, or willful misrepresentation in making the statement, hut upon the ground that it will be a fraud to show that it is untrue, to the prejudice of one who has acted upon the faith of such statement. (Kingsley v. Vernon, 4 Sandf. 361.)
    IV. Even if this were otherwise, the motion for a nonsuit should have been granted, as the admission in the bill of lading was controlling, unless it was countervailed by evidence in law warranting the presumption that it was false. 1. The testimony of the plaintiff’s assignor was not inconsistent with the truth of the admission; and showed merely that the wheat was negligently secured—that there was ample opportunity by night and by day for- persons on or off the boat to remove what they chose—and that he did not observe the absence of the wheat, or know how it was taken. 2. Under such circumstances the granting of a nonsuit was matter of right, and the error of law is not cured by the verdict of the jury. (Lomer v. Meeker, 25 N. Y. Rep. 361.)

      J. C. Cochrane, for the respondents.
    I. The bill of lading was not conclusive. It was competent by parol evidence to show a mistake in the quantity. (Abbott on Shipping, 324; Ellis v. Willard, 5 Seld. 529.)
    II. The respondent was not estopped by the bill of lading. 1. The wheat was not purchased by .the bill of lading, but was previously owned by the appellant. He was both shipper and consignor, and the whole transaction was with him. 2. As matter of law, the draft was not paid on the strength of the bill, of lading. The bill of lading was never transfer* red; it did not accompany the draft; the draft was for the cargo of the two boats, and consequently it was impossible for this bill of lading to have any thing to do with a large part of it, as it only embraced a part, and the draft was paid in orders, money and flour, at different times, and the deficiency may have been upon the other boat. 3. The mistake was made by the appellant himself, through his agents, either at Buffalo or Rochester. 4. He never put his refusal to pay on this ground, either when demand was made or in the pleadings. 5. Estoppels must be mutual. There was nothing in the whole transaction to prevent the appellant from showing a mistake in his favor. 6. The appellant knew that the bill of lading was open to explanation. If he saw fit to make it conclusive upon himself, without our knowledge or consent, he could not also charge us.
   Ingraham, J.

It is well settled that an ordinary bill of lading is not conclusive, as between the original parties, hither as to the shipment of the goods named in it, or as to the quantity said to have been received, and any mistake or fraud in the shipment of the goods may be shown on the trial. (Howard v. Tucker, 1 B. & Ad. 712; Berkley v. Watting, 7 Ad. & El. 29.) In Ellis v. Willard, (5 Selden, 529,) Allen, J, says, that part of the bill which relates to the receipt of the goods, their quality, condition and quantity, is treated as a receipt, as distinct from the contract, ¡Numerous cases are cited in support of this rule; and Denio, J. in the same case, says: “It [the bill of lading] is very high and authentic evidence of the quantity and condition of the goods, but is only evidence, and not between the primary parties' an estoppel.”

The additional stipulation contained in the bill of lading, in the present case, does not affect this question. That is an agreement on the part of the carrier to pay for any deficiency in quantity. Deficiency from what ? ■ ■ From the quantity referred to in the bill of lading. This must be understood to mean the quantity received. It is no more a guaranty that the captain received the whole quantity than the former part of the bill, which he is allowed to explain and to some extent contradict. It can only be understood as an agreement to pay for that portion, if any, which shall be .found to be deficient of what he has received. If he is permitted, on the trial, to show that he did not receive the whole amount, and that he delivered all he received, there is no-deficiency upon which such a clause can operate. We must conclude from the finding of the jury that the captain delivered to the defendant all the wheat received by him at Buffalo. It is immaterial where the error occurred in weighing. Such finding shows there was in fact no deficiency between the amount, received and the amount delivered, and of course nothing to be paid for under that stipulation.

The only remaining question is whether the defendant had acted upon the faith of the bill" of lading, so as to place him in the situation of one who has paid money upon it, and thereby to claim that the captain is estopped from showing that he did not receive the quantity mentioned in the bill.

The court refused to charge as requested, upon the ground that Horton, who gave the order" for the wheat and who drew the draft, was the agent of the defendant, who was the owner and shipper of the wheat; that the draft was not paid on the faith of the bill of lading; and that the defendant did not refuse to pay the freight upon this ground.

The case shows that the bill of lading did not accompany the draft, but that the same was drawn for two purchases together, irrespective of the bill of lading. The payment was made on the account of Horton, and not on the faith of the bill of lading. The evidence would not have warranted the judge to charge the jury on this point as requested. As there is no objection to the mode in which the judge submitted the question to the jury, we must conclude there was no error in this respect.

The judgment should be affirmed.

Denio, Ch. J.

It is well settled upon authority that the part of a bill, of lading which specifies the quantity of the goods shipped is not conclusive upon the carrier, but'may be shown by extrinsic evidence to. be incorrect. "In this respect it is but a receipt, and not a stipulation' of a written contract. The question was examined by this court in Ellis v. Willard, (5 Seld. 530,) where the prior authorities are referred to. The counsel for the defendant argues that the express provision contained in the bill of lading in this case, that “any damage or deficiency in quantity, the consignee will deduct from the balance of freight,” created a distinction between - it and the cases which have been decided. The words deficiency in quantity relate, I think, to the property shipped. This is inferable from its association with the term damage, which plainly has reference to delinquencies attributable to the carrier. No doubt it might be made a matter of an express contract that the carrier should account for the precise quantity acknowledged in the instrument, and that no other evidence on that point should be received. There are no words here indicating that such a stipulation was designed to be attached to this contract. Without the language relied on, the bill of lading would be presumptive evidence of the quantity, and the carrier, unless' he could show a mistake, would be obliged to account accordingly. The special language does not, I think, alter the case.

The defendant further relies on the principle that a tona fide indorser of a bill of lading, advancing his money on it, may rely upon the quantity acknowledged, and may compel the carrier to account for- that quantity, whether it was put on board or not. There is, no doubt, an established distinction in favor of a tona fide indorsee, grounded upon the doctrine of estoppel. By signing the bill of lading, acknowledging the receipt of a given quantity of merchandise, the master has enabled his shipper to go into market and obtain money on the credit of the shipment, and can not be permitted, as against a person so advancing, to set up his own or the master’s want of care at the expense of the indorsee. This results from the qualified negotiability of these instruments. (See Dows v. Perrin, 16 N. Y. Rep. 325; Bates v. Todd, 1 Moo. and Rob. 106; Berkley v. Watkins, 7 Ad. & El. 29.) But in the present case the defendant was not the purchaser of the property while it was in the hands of the carrier, and he did not make title to it through the bill of lading. His purchase of the wheat was made prior to the lading on board the canal boat, and the wheat was his property before and at the time it was placed on board. The purchase was of 7494 bushels from Horton, who engaged to ship it to the defendant. In making the shipment he was the defendant’s agent, and his knowledge was the defendant’s knowledge. If he failed to ship by this and the other, boat the full amount which the defendant had purchased of him, he is still liable for the balance. That balance he • must be considered as having appropriated to his own use, unless he shall show that he has kept it on hand for him. There would be no justice in compelling the carrier to pay for the deficiency, if he is able to show that he never received it,_

The jury have settled the question of fact against the defendant. A mistake occurred in some part of the transaction, either in the account of the wheat delivered on board, and which was entered in the bill of lading, or in the statement of the quantity delivered at Rochester, or the quantity deficient was lost by the carrier. The evidence upon these subjects was submitted to the jury, and they have found that the fault was not in the plaintiff. •

It follows that the judgment of the Supreme Court ought to be affirmed.

All the Judges concurred, except Selden, J. who was for reversal.

. Judgment affirmed.


source: Caselaw Access Project

author: Davies, J. Denio, Ch. J. Hogeboom, J.

license: Public Domain

text:
    Robert D. Anderson and others v. Anastasius Nicholas.
    Where certificates of stock were wrongfully taken from the possession of the owners, by a lad sixteen years of age, and sold to the defendant for $3 per share, when the stock was worth $10, and the same was actually sold by the defendant for $7 per share, immediately afterwards; Held that the purchase of such a species of property by the defendant from a lad of that age, for less than one-third of its value, could not be deemed Iona Jide; and that the purchaser acquired no greater or better title to it than that possessed by the person from whom he received it.

      Held, also, that the defendant was guilty of a conversion of the stock, and upon his refusal to restore it, or pay its value, on demand, the plaintiff was entitled to recover the value thereof, with interest.
    Appeal from a judgment of the Supreme Court, entered upon the report of a referee. The following facts were found hy the referee, viz: That the plaintiffs were possessed of and owned, as partners, twenty shares of the capital stock of the American Guano Company: and that on or about the 25th day of October, 1858, one Alexander H. Anderson, a son of the plaintiff Eobert D. Anderson, and a minor of the age of about sixteen years, without the-leave, permission, authority or knowledge of the plaintiffs, or either of them, wrongfully took said twenty shares of stock out of the possession of the plaintiffs. That the said twenty shares so taken were in one certificate, and were in all respects, except as to the number of shares and the number of the certificate, like the following:
    “No. 732. Ameeican Guano Company. One share.
    This is to certify that A. G. Benson, president, of New York, is entitled to one share in the capital stock of the American Guano Company, standing in his name, and transferable on the books of said company only upon surrender of this certificate hy the said A. G. Benson, president, or his attorney. New York, 7th January, 1856.
    Jos. L. Wyckoee, A. G. Benson,

      Treasurer. President.”

      Indorsed upon each certificate was a blank power of attorney, signed by the president, authorizing the transfer of the certificate.
    That the said stock was not sold and disposed of to the defendant; but that said Alexander, on or about the said 25th of October, 1858, offered to dispose of said twenty shares of stock to the defendant; that the defendant offered said Alexander $3 per share for the same, which amount said .Alexander at first refused to take, but almost immediately afterwards agreed to accept, and so stated to the defendant; and that thereupon the defendant took said stock from said Alexander, went out .to inquire about the same; and, upon returning to his office, finding several persons waiting in the back room to do business with him, he stated to his clerk, George M. Bowen, that it was all right, and that he might do as he pleased about buying it, and thereupon handed said certificate of twenty shares to his said clerk; whereupon, the said clerk closed the transaction with the said Alexander, by paying him $3 per share and retaining the said twenty shares of stock. That at no time prior to the commencement of this suit was any intimation made to either' of the plaintiffs that said clerk had ever had any interest" in said stock; and that no part of said $60, received by said Alexander, was received by or went to the benefit of said plaintiffs, or either of them. That shortly thereafter the said Bowen delivered said stock to the defendant to sell for him. That the defendant thereupon caused said stock to be sold in his own name, by H. T. Morgan & Co., brokers, at the stock board, on the next day after the same was obtained as aforesaid, of said Alexander, for $7 per share; received the proceeds of the sale, and accounted to said Bowen for such proceeds, less his. commission for such sale. That at the time of such sale by the defendant, the said stock was of the value of ten dollars per share, amounting in the aggregate to the sum of two hundred dollars. That a day or two after such sale, and before the commencement of this suit, the plaintiffs demanded of the defendant the return of said stock; or the value thereof, stating to the defendant that the plaintiffs owned the stock, and that the said Alexander had taken it without the leave or knowledge of the plaintiffs, or either of them, and offering, if the defendant would pay the difference between the $60 given for the stock and the $140 received by him on its sale, to take that in full satisfaction. The defendant admitted, at this time, in the presence of his said clerk, that he, the defendant, had purchased the said shares of said Alexander for $3 a share, and had sold the same for $7 a share, and received the avails thereof; but that the said defendant refused to return or deliver the same, or to pay the value thereof,, or any part thereof.
    --for the appellant.

      Charles W. Prentiss, for the respondents.
   Davies, J.

The referee who-tried this action has found that the plaintiffs were the owners and holders of twenty shares of the capital stock of the American Gruano Company, and that the certificate therefor was issued to the name of A. Gr. Benson, the president of said company, and that he had indorsed thereon a blank power of attorney, authorizing the transfer thereof to any person. This certificate, with the blank power thereon, were wrongfully taken by a person from the possession of the plaintiff, and who sold and delivered the same to one Bowen, a clerk of the defendant. The latter paid therefor $3 per share, and on the next day Bowen delivered said stock to the defendant, who sold the same for $7 a share, although the value thereof at the time was $10 per share. That within a day or two afterwards, and before the commencement of this suit, the plaintiffs demanded of the defendant a return of said stock, at the value thereof, stating that they owned the same, and that the person named had taken it from them, without their leave or knowledge, or that of either of them, and offered if the defendant would pay . the difference between the $60, given for the stock, and the $140 received by him on its sale that the same would be accepted in full for the stock, and the defendant then admitted, in presence of his clerk Bowen, that he, the defendant, had purchased the stock of said Alexander for $3 a share, and had sold the same for $7 a share, and received the avails thereof, but refused to return or deliver _ the same, or to pay the balance thereof, or any part thereof. Upon these facts the referee found as a conclusion of law, that the plaintiffs were entitled to recover the sum of $200, being the value of said stock, with interest front the 10th Of November, 1858, the day of the commencement of this suit. And judgment in favor of the plaintiff was rendered upon said report, and the same was affirmed at general' term. The appellant has furnished no points.

There can be no question upon the correctness of this recovery. The stock, sold and converted by the defendant, and the avails of which he received, was indisputably the property of the plaintiff. The conversion by the defendant was distinctly found. The defendant acquired no title thereto, by the delivery thereof to him by the person who purloined the same from the plaintiffs, and he therefore acquired no greater or better title to it than that possessed by the person from whom he received it. (Mechanics’ Bank v. New York & N. H. R. Co., 3 Kern. 599.) The person taking this stock from the plaintiffs had no legal right to the same, and he could confer on the defendant no stronger or better claim to the stock than he possessed. The plaintiffs were entitled to recover the value of the stock, with the interest as found by the referree, and the judgment should be affirmed with costs.

Denio, Ch. J.

The findings of the referee contain items of evidence rather than conclusions of' fact. The matters so found led, however, to a very satisfactory conclusion that the purchase by the defendant was not in good faith. The buying of such a species of property from a lad sixteen years old, for one third of its market value, could not well have been bona fide. The same remark may be made respecting the attempt to disguise the transaction as one in which the defendant’s clerk was the purchaser instead of himself. The general report of the referee in favor of the plaintiff, shows the view which he took of these two features of the case. It establishes the position that he held the purchase to have been made by the defendant himself, and that it was made under circumstances of so much suspicion that the defendant was put on inquiry, and was chargeable with notice that the possession of the paper by the lad was not that of an owner. The manoeuvre by which the clerk was brought forward as the nominal purchaser, alone, indicates a conciousness on the part of the defendant that the purchase was not a safe or proper transaction.

These remarks assume that a bona fide purchase of the scrip would have divested the plaintiffs of their property in it. But I do not concede that it had such a negotiable quality as to be transferable by delivery, like a promissory note. What I have attempted to show is that even upon the assumption of its full negotiability, the defendant could not avail himself of a purchase made under the circumstances disclosed in the case.

If the scrip was not negotiable, and so was capable of being followed by the owner, it was not capable of being converted, and a conversion was established by showing that it had passed out of the defendant’s hands by sale at the broker’s board.

I am for affirming the judgment, and for allowing ten per cent damages for the delay caused by this appeal.

Hogeboom, J.

I do not discover any defense whatever to the plaintiffs’ action. They have successfully established the three propositions necessary to maintain their action. 1, Their unquestionable ownership of the property. 2. The defendant’s conversion of the property; his receipt of it from a person not authorized to pass the title; and his refusal to restore it, or its value, upon demand. 3. The value of the property.

As no defense is shown to this view of the case, the result is that the judgment must be affirmed.

All the other Judges concurring,

Judgment affirmed.