The Thames,
81 U.S. 98 (1871)

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U.S. Supreme Court

The Thames, 81 U.S. 14 Wall. 98 98 (1871)

The Thames

81 U.S. (14 Wall.) 98


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."


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

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