A purchaser of interstate shipments of grain sued the carrier
for damages alleged to have resulted from the falsity of dates of
original shipment as recited in substituted order bills of lading
issued by the carrier's agent, and the state court sustained the
carrier's defenses, partly upon the ground that such bills of
lading were not strictly negotiable under the Federal Bill of
Lading Act, as contended by the plaintiff, and partly upon other
and nonfederal grounds.
Held that, as the latter grounds
were substantial and broad enough to sustain the.judgment, the
judgment should be affirmed without considering the federal
question.
113 Kans. 726 affirmed.
Certiorari to a judgment of the Supreme Court of Kansas which
sustained a Judgment for the railroad company in an action by
Browne for damages alleged
Page 267 U. S. 256
to have resulted from false recitals of dates in substituted
bills of lading.
See 113 Kansas 726.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
This action was begun in the District Court, Shawnee County,
Kansas, to recover damages resulting from false recitals of dates
contained in substituted order bills of lading for four cars of
wheat. These bills were issued by respondent's agent at Denver, and
stated, contrary to the facts, that they were given in lieu of
others issued at points of origin on specified dates prior to
November 9, 1920.
Petitioner agreed to buy a quantity of wheat from the Ed Past
Grain Company, of Denver at a stipulated price, shipments to be
made before November 9th, and then contracted to resell at a
favorable price contingent upon like shipments. He alleged that,
relying on the false recitals in the substituted bills, he paid
drafts drawn on himself by the Past Company for the purchase price,
but was unable to use the wheat, when received, to fulfill his
contract for resale because original shipments were too late, and
that he was compelled to dispose of it on a declining market at
considerable loss. Also:
"That, according to the usage and custom of the grain business,
well known to defendant, . . . time of shipment of grain in car
lots is determined by the date appearing on the bills of lading on
which the carrier received such car of grain for transportation and
grain on contract is delivered by tendering
Page 267 U. S. 257
a properly indorsed order bill of lading attached to the
seller's draft on the buyer for the estimated price of such car of
grain, such order bill of lading being delivered to the buyer upon
payment of such draft."
Answering, respondent denied every allegation of the petition
not specifically admitted. It acknowledged purchase of the wheat by
petitioner from the Past Company, but alleged that, having failed
to cancel the contract because of delay, as permitted, he was bound
to accept the wheat on arrival; also that it had no notice of the
contract for resale, and was not liable for any special damages
consequent upon failure to comply therewith. It further stated that
the substituted bills were prepared by the Past Company and the
signature of its Denver agent obtained by fraud; that the agent had
no authority to sign bills containing false or erroneous
statements; that petitioner could have disposed of the wheat
without loss if he had acted promptly and prudently upon receipt of
the same, and (Paragraph 5):
"Defendant denies specifically that plaintiff used every effort
to ascertain the dates said shipments were made, and this defendant
alleges that the freight bills which plaintiff alleges were paid by
him, show fully the points where different parts of said shipments
originated in less than carload lots, and show the transit point
where the same were consolidated into the four carload shipments
involved in this action; that, had plaintiff awaited the arrival of
said shipments at McKinney, Texas, before paying the drafts
attached to the bills of lading he could, by inquiring of the
delivering carrier, have ascertained all of the facts relative to
the dates and points of origin of said shipments, and defendant
alleges this information was equally available to him at any time
thereafter. Defendant further alleges that, by reason of the
lateness of the delivery of said shipments, plaintiff was, or
should have been, warned of the probability of the fraud of the Ed
Past Grain Company, and should have
Page 267 U. S. 258
detected the same prior to the payment of the drafts and
acceptance of the wheat, as did the Gladney Milling Company when
the wheat was thereafter tendered to them for application on the
contract between them and the plaintiff."
A general demurrer to the answer and special demurrers to
certain paragraphs were interposed and overruled by the court.
Judgment went against petitioner. He stood on the demurrer, and
perfected an appeal to the supreme court, which affirmed the
challenged judgment. In the latter court, his principal contention
seems to have been that the federal Bill of Lading Act, approved
August 29, 1916, 39 Stat. 538, c. 415, makes order bills of lading
strictly negotiable, and therefore respondent became liable to him
for the damages consequent upon misstatements of dates in the
substituted bills. This contention was duly considered and
rejected. The court then said:
"It follows that, insofar as plaintiff's demurrer involved the
question chiefly urged here, the ruling of the trial court was
correct. The other matters pleaded in defendant's answer, to which
the plaintiff objected and demurred, need but brief attention. The
fact, if correct, that plaintiff was bound to accept the shipments
from the Ed Past Grain Company may not be a complete defense to
plaintiff's cause of action, but it does raise an issue which may
become important on the measure of damages if any are recoverable
in the action, and whether there was a custom of grain dealers to
rely on the datings of bills of lading, of which the carrier had
notice or was bound to take notice, was also a question of fact,
and therefore not demurrable. The scope of the powers of
defendant's agent at Denver could not be determined by demurrer,
and neither could the matters pleaded in the fifth paragraph of the
answer summarized above."
"It is well settled that, where the Supreme Court of a state
decides a federal question in rendering a judgment,
Page 267 U. S. 259
and also decides against the plaintiff in error upon an
independent ground not involving a federal question and broad
enough to maintain the judgment, the writ of error will be
dismissed without considering the federal question."
Hammond v. Johnston, 142 U. S. 73,
142 U. S. 78;
Enterprise Irrigation District v. Canal Company,
243 U. S. 157,
243 U. S.
164.
It seems clear that the Supreme Court of Kansas rested its
judgment affirming the action of the trial court upon a nonfederal
ground broad enough to sustain it. The answer not only relied upon
nonnegotiable features of the bills -- the federal question -- but
advanced other defenses good as against the general demurrer. It
denied the existence of any trade usage to accept as accurate
recitals as to dates in bills of lading, also that the Denver agent
had power to issue the substituted bills. It asserted that
petitioner was obligated to accept the grain irrespective of the
dates of original shipments, and that, if due diligence had been
exercised, no loss would have occurred. These denials and
assertions raised questions under the state laws. They were
substantial, and broad enough to sustain the ruling of the trial
court.
The judgment below is affirmed.
Affirmed.