1. The contract between a ship and the shipper is that which is
contained in the bills of lading delivered to the shipper. The bill
retained by the ship or "ship's bill," as it is sometimes called,
is designed only for its own information and convenience, not for
evidence, as between the parties, of what their agreement was. If
it differs from the others, they must be considered as the true and
only evidence of the contract.
2. By issuing bills of lading for merchandise stipulating for a
delivery to order, the ship becomes bound to deliver it to no one
who has not the order of the shipper. It is no excuse for a
delivery to the wrong persons that the endorsee of the bills of
lading was unknown and that notice of the arrival of the
merchandise could not be given to him. Diligent inquiry for the
consignee, at least, is a duty. And if, after inquiry, the
consignee or the endorsee of a bill of lading for delivery to order
cannot be found, the duty of the carrier is to retain the goods
until they are claimed or to store them prudently for and on
account of their owner. He has no right under any circumstances to
deliver them to a stranger.
3. The endorsee of a bill of lading may libel the vessel on
which the goods are shipped for failure to deliver them, though be
may be but an agent or trustee of the goods for others, as
ex
gr., the cashier of a bank.
In January, 1868, Alfred Bennett, James Van Pelt, and Gilbert
Van Pelt were merchants doing a commission business in New York
under the name of Bennett, Van Pelt & Co. The partner, Gilbert,
resided in Savannah, where he was in the habit of purchasing cotton
and consigning it to
Page 81 U. S. 99
his firm in New York. In the course of this dealing, he bought,
on the 28th of January, 1868, one hundred and eleven bales of Brady
& Moses, commission merchants in Savannah, for this firm in New
York, and on the same day shipped the cotton to New York by the
steamship
Thames, one of the vessels of a line known as
the Black Star Line. Three bills of lading of the same tenor and
date were issued, each stating that the cotton was shipped by
Gilbert Van Pelt, and that it was to be delivered "unto order or to
his or their assigns." "And it is expressly understood," the bill
of lading went on to say,
"that the articles named in this bill of lading shall be at the
risk of the owner, shipper, or consignee thereof, as soon as
delivered from the tackles of the steamer at her port of
destination, and they shall be received by the consignee thereof,
package by package, as so delivered; and if not taken away the same
day by him, they may (at the option of the steamer's agents) be
sent to store or permitted to lay where landed, at the expense and
risk of the aforesaid owner, shipper, or consignee."
Two of the bills were delivered to said Gilbert Van Pelt, the
other being retained as the ship's bill of lading. On the same day,
in order to procure money wherewith to pay for the cotton and in
compliance with the terms and conditions of the purchase, he drew
his draft on his firm in New York for $8,300, payable fifteen days
after sight, to the order of "Billopp Seaman, cashier," and
delivered the draft and the two bills of lading which he had to the
said Brady & Moses, who held moneys of the Atlanta National
Bank of Atlanta, Georgia, for the purpose of investment in bills
drawn on New York, and the draft was discounted for the account of
that bank, and the proceeds were applied toward the payment of the
cotton. The bill or invoice for the cotton was receipted as if it
had been paid for in cash, and the Atlanta Bank was charged with
the advances. The two bills of lading were endorsed,
"Deliver B. Seaman, Cashier, or order."
"G. S. VAN PELT"
Page 81 U. S. 100
The point of contest in the case was for what exact purpose the
two bills of lading had been delivered to Brady & Moses -- that
is to say, whether to stand as security until the draft of Gilbert
Van Pelt should be accepted or whether to stand until it should be
paid. Gilbert Van Pelt himself swore it was given but for the
former purpose, and that this was perfectly understood on both
sides. Brady & Moses, on the other hand, each swore that it was
given no stand as security until the draft should be paid, and in
this they were confirmed by the clerk of their house, one Bruen.
The draft and the bills of lading were forwarded to Billopp Seaman
under general instructions from the Atlanta National Bank to hold
and collect for the credit of the account of the said Atlanta
National Bank.
The
Thames arrived in New York late on Sunday
afternoon, February 2, 1868. Before arrival, the purser had made
out bills for freight, and made out those for freight on this
cotton to Bennett, Van Pelt & Co. There was a memorandum in
writing at the foot of the ship's bill of lading, "for Bennett, Van
Pelt & Co.," by whom put there was not at all explained further
than that it was not in the handwriting of any of the ship's agents
at Savannah who signed the bill of lading and made the contract for
carriage. The ships of the Black Star Line, of which, as already
mentioned, the
Thames was one, had brought cotton
regularly for Bennett, Van Pelt & Co. On Monday morning,
February 3, the steamer commenced delivering cargo. The one hundred
and eleven bales were delivered on the pier. Bennett, Van Pelt
& Co. sent their carts and took the cotton, paid freight for
it, receipted for it on the ship's bill of lading, and sold the
bulk of it for cash on delivery the day that they got it.
As appeared on the one hand, nothing was done by the Fourth
National Bank in reference to the cotton or its delivery from the
time of the acceptance of the draft, February 1, 1868, until after
its maturity, February 19, 1868. On that day and on that draft,
Bennett, Van Pelt & Co. failed, and the draft was protested for
nonpayment. On the other hand it did not appear, except by the
testimony of
Page 81 U. S. 101
James Van Pelt, which was contradicted by Billopp Seaman, that
he, Seaman, knew of the arrival of the vessel before the cotton was
delivered and sold. On the 19th, after the draft was dishonored,
Seaman, by direction of the President of the Fourth National Bank,
sent a clerk to the office of the agents of the ship, where he saw
the ship's bill of lading and heard that the cotton had been
delivered some days before to Bennett, Van Pelt & Co. He made
no demand. Afterwards, on March 16, 1868, the bank made a formal
demand for it.
Until the inquiries made on February 19, 1868, the agents of the
Thames had no notice beyond that which the bill of lading itself
gave of any claim to or interest in the cotton in question by any
other parties than Bennett, Van Pelt & Co.
It was undisputed that Seaman had no real interest in the
cotton, and that it belonged to the Atlanta National Bank, whose
sole agent in New York was the Fourth National Bank.
In this state of things, Seaman filed his libel in the District
Court of New York against the
Thames, March 19, 1868,
claiming damages in the sum of $8,300 for nondelivery to him, at
New York, of the cotton, the bill of lading for which had, as he
set forth, and as was not denied, been assigned to him for a
valuable consideration. The owners of the
Thames answered
the libel and put in issue its material allegations, averring that
the cotton was shipped by the
Thames for and to be
delivered to Bennett, Van Pelt & Co., of New York, and was so
delivered in due course and without notice of the claim of the
libellant, and that no claim for it was ever made by the libellant
until long after such delivery; that the alleged assignment of the
bill of lading to the libellant was by way of security for personal
obligations of Bennett, Van Pelt & Co., who were solvent
merchants, and to whom the libellant looked for payment of such
obligations, and that he gave no notice and did no act as assignee
of the bill of lading on the arrival of the
Page 81 U. S. 102
vessel or upon the delivery of the cotton, nor until after
Bennett, Van Pelt & Co. had become insolvent, and that by his
delay and laches he waived and lost all claim against the vessel
and her owners.
The district court, considering that Seaman had a sufficient
interest to sue and holding, upon the evidence, that the delivery
of the bills of lading for the cotton was intended to and did
transfer it to the libellant as a security for the payment of the
draft for $8,300, decreed in favor of the libellant, and the
circuit court affirming that decree, the owners of the vessel
brought the case here.
Page 81 U. S. 104
MR. JUSTICE STRONG delivered the opinion of the Court.
The engagement of the ship with the shipper was to deliver the
cotton in New York to order. In regard to this there is no doubt.
Such was the express stipulation of the bills of lading, which were
given on the 28th of January, 1868, when the cotton was received on
shipboard. On that day, Gilbert Van Pelt purchased the cotton in
Savannah from Brady & Moses, and settled for it by giving in
payment his draft upon the firm of Bennett, Van Pelt & Co., in
New York, of which firm he was a member. The draft was drawn at
fifteen days' sight in favor of the libellant, Billopp Seaman,
cashier, or order, and it was discounted by Brady & Moses with
money of the Atlanta National Bank, which they had in hand for the
purpose of purchasing bills on New York on the bank's account. The
price of the cotton was
Page 81 U. S. 105
thus, in substance, paid by money which Van Pelt obtained from
the bank, as the proceeds of his draft. At the time when he drew
the draft, he also endorsed upon the bills of lading which the ship
had given for the cotton an order directing its delivery to Billopp
Seaman, cashier, in whose favor the draft was drawn, and delivered
them with the draft to Brady & Moses. They were made out in
triplicate, as is usual, and, by them all, the ship undertook to
deliver the cotton shipped to order. Two of them had been delivered
to Van Pelt, the shipper, and the third was retained by the ship.
That retained by the ship, it is true, when produced at the trial
in the court below, was found to have, at its foot, the memorandum,
"for Bennett, Van Pelt & Co.," which is not upon those
delivered to the shipper. How that memorandum came there is not
explained. No witness has testified in whose handwriting it is, but
it is proved not to have been in that of any of the ship's agents
at Savannah who signed the bills of lading and who made the
contract for carriage. This, however, is of little importance. The
contract between the ship and the shipper is that which is
contained in the bills of lading delivered. The ship's bill was
designed only for its information and convenience -- not for
evidence, as between the parties, of what their agreement was. If
it differs from the others, they must be considered as the true and
only evidence of the contract.
The proofs in the case leave no reasonable doubt that the bills
of lading were endorsed to the libellant in order to transfer to
him the cotton as a security for the payment of the draft at its
maturity. Gilbert Van Pelt alone asserts the contrary. His
testimony, it must be admitted, tends to show that they were
endorsed and received as security for the acceptance only of the
draft. But he is directly contradicted by Moses, by Brady, and by
Bruen, neither of whom has any interest in this controversy and all
of whom state that the bills of lading were endorsed to secure to
Seaman the payment of the draft, and not merely its acceptance.
Besides, their testimony is in harmony with all the probabilities
of the case. It is absurd to talk of security for the
acceptance
Page 81 U. S. 106
of the draft. No such security was needed. It might have been
accepted before it was discounted. Gilbert Van Pelt was a member of
the firm upon which it was drawn, and he was at hand when it was
discounted. He might then have accepted it. In addition to this, it
is significant that the invoice of the sale from Brady & Moses
to Van Pelt was made out and receipted as if paid in cash, the
draft having been turned into cash by a deduction of discount and
exchange, and the advances made upon the draft were at once charged
to the Atlanta National Bank. In view of all this, it is incredible
that the bills of lading were endorsed to Seaman merely to secure
what the maker of the draft could have given on the instant. Nor
ought the position of Gilbert Van Pelt to be overlooked. If the
bills of lading were endorsed as security for payment of this
draft, his firm has obtained from the ship delivery of the cotton
through a fraudulent representation that they were the consignees
or entitled to the delivery of possession, and they sold it for
cash on the day when it was thus wrongfully obtained. He is not,
therefore, an unbiased witness. His testimony was given while he
was under the influence of a temptation, not unnatural, to
vindicate his firm from the guilt of fraudulently abstracting a
large amount of property from its rightful owner. Standing as he
does in such a position, his statements are not to be credited when
in conflict with the positive testimony of Brady, of Moses, and of
Bruen and when inconsistent with the strong probabilities of the
case.
It must be considered, then, that by the endorsement of the
bills of lading, the libellant became the owner of the cotton, and
that by force of the contract with the ship it was deliverable at
New York only to him or to his order. Reference to authorities to
show that the effect of the endorsement was to vest such ownership
in Seaman is quite unnecessary. We may, however, refer to a few.
[
Footnote 1]
Page 81 U. S. 107
The ship arrived with the cotton at the port of New York on
Sunday, the 2d day of February, 1868, late in the afternoon, and on
the morning of the 3d delivered it to Bennett, Van Pelt & Co.
on their demand, without the production of either of the bills of
lading which had been given to the shipper and without any order
from Billopp Seaman, who was the endorsee of the bills and to whom
alone or to whose order it could rightfully be delivered. It does
not appear that any notice of the ship's arrival was given to
Seaman or that the ship made any inquiry to ascertain to whom the
cotton was deliverable. It would seem that, assuming the mysterious
memorandum on the bill of lading retained by the ship was
equivalent to an order to deliver to Bennett, Van Pelt & Co.,
no demand was made for the presentation of such an order and no
further inquiry for the consignee was set on foot. The consequence
was that Bennett, Van Pelt & Co., having obtained the property
without any right to it, sold it for cash on the day it was
delivered to them, and failed within a few days afterwards.
No argument is needed to show what is most manifest -- that the
delivery which was thus made was a breach of the ship's contract.
By issuing bills of lading for the cotton stipulating for a
delivery to order, the ship became bound to deliver it to no one
who had not the order of the shipper, and this obligation was
disregarded instantly on the arrival of the ship. And it is no
excuse for a delivery to the wrong persons that the endorsee of the
bills of lading was unknown, if indeed he was, and that notice of
the arrival of the cotton could not be given. Diligent inquiry for
the consignee, at least, was a duty, and no inquiry was made. Want
of notice is excused when a consignee is unknown, or is absent, or
cannot be found after diligent search. [
Footnote 2] And if, after inquiry, the consignee or the
endorsees of a bill of lading for delivery to order cannot be
found, the duty of the carrier is to retain the goods until they
are claimed or to store them prudently for and on account of their
owner. He may thus
Page 81 U. S. 108
relieve himself from a carrier's responsibility. [
Footnote 3] He has no right under any
circumstances to deliver to a stranger.
It is said, however, that the libellant delayed presenting the
bills of lading which had been endorsed to him, and delayed making
any demand for the cotton until after the 19th of February, when
the draft had fallen due and when it had been dishonored. But that
delay cannot justify the ship's delivery of the cotton, on the day
after its arrival, to persons who had no bill of lading and no
authority whatever to receive it. Had the delay been instrumental
in causing such a wrongful delivery, had it been active
interposition to mislead the ship, a different case might possibly
have been presented. But at most the laches of the libellant was
mere inaction, and the wrong delivery was in no degree due to it.
The delivery was, as we have stated, made on the morning after the
ship's arrival in port, and the ship's order for delivery to
Bennett, Van Pelt & Co. was issued before the libellant could
have known of its arrival. We say this notwithstanding the
testimony of James Van Pelt, which is plainly in conflict with the
proved and conceded facts of the case. And as the cotton was sold
for cash on the 3d of February, the very day of its delivery, the
failure of the libellant to claim it until some weeks afterwards,
wrought no injury or loss to the carrier, so far as it appears. We
are therefore of opinion that the ship is clearly liable for the
cotton to the libellant.
And we think that the libel was rightly filed in the name of
Billopp Seaman. By the endorsement of the bills of lading the legal
ownership of the cotton passed to him, as well as the right to
control its delivery. It is a matter of no importance that the
beneficial interest may have been in the bank of which he was
cashier. [
Footnote 4] The
holder of a legal right may always assert it by suit, though he may
be accountable to another for what he may recover. A judgment in
his favor may always be pleaded in bar against a suit by the
Page 81 U. S. 109
beneficial owner. Besides, it is settled that the agent of
absent owners may libel in admiralty either in his own name or in
that of his principals. [
Footnote
5]
Decree affirmed.
[
Footnote 1]
7
Conrad v. Atlantic
Insurance Company, 1 Pet. 445;
Gibson v.
Stevens, 8 How. 384;
Thompson v. Dominy,
14 Meeson & Welsby 403;
Caldwell v. Ball, 1 Term 205;
Wright v. Campbell, 4 Burrow 2051; 1 Lord Raymond 271;
Walter v. Ross, 2 Wash.C.C 283.
[
Footnote 2]
Fisk v. Newton, 1 Denio 45;
Peytona, 2 Curtis
21.
[
Footnote 3]
Galloway v. Hughes, 1 Bailey 553; 1 Conklin's Admiralty
196;
Fisk v. Newton, supra.
[
Footnote 4]
Fairfield v. Adams, 16 Pickering 381.
[
Footnote 5]
Houseman v. Schooner North
Carolina, 15 Pet. 49;
McKinlay v.
Morrish, 21 How. 355;
Lawrence
v. Minturn, 17 How. 100.
