1. Actual delivery by the bailee on the demand of the true
owner, who has the right to the immediate possession of the goods
bailed, is a sufficient defense of the bailee against the claim of
the bailor, and there is no difference in this regard between a
common carrier and other bailees.
2. While a contract of bailment undoubtedly raises a strong
presumption that the bailor is entitled to the thing bailed, it is
not true that the bailee thereby conclusively admits the right of
the principal. His contract is to do with the property committed to
him what his principal has directed -- to restore it or to account
for it. He does so account for it when he has yielded it to the
claim of one who has a right paramount to that of his bailor.
3. If there be any estoppel on the part of the bailee, it ceases
when the bailment on which it is founded is determined by what is
equivalent to an eviction by title paramount -- that is, by the
reclamation of possession by the true owner.
4. Nor can it be maintained that a carrier can excuse himself
for failure to deliver to the order of the shipper, only when the
goods have been taken from his possession by legal proceedings, or
where the shipper has obtained the goods by fraud from the true
owner.
5. Whether the shipper has obtained, by fraud practiced upon the
true owner, the possession he gives to the carrier, or whether he
mistakenly supposes he has rights to the property, his relation to
his bailee remains the same. He cannot confer rights which he does
not possess, and if he cannot withhold the possession from the true
owner, one claiming under him cannot.
6. While a bailee cannot avail himself of the title of a third
person (though that person be the true owner) for the purpose of
keeping the property for himself, nor in any case where he has not
yielded to the paramount title, he is not answerable if he has
delivered the property to its true owner at his demand.
7. without asserting that a title to personal property may not
be created between the issue of a bill of lading therefor and its
delivery to the ship, which will prevail over the master's bill,
the Court holds that in the absence of any such intervening right,
a bill of lading does cover goods subsequently delivered and
received to fill it, and that it will represent the ownership of
the goods. Their subsequent removal from the vessel by a person
other than the true owner, either with or without the consent of
her officers, cannot divest that ownership.
Page 93 U. S. 576
8. The taking possession of property by one not its owner or
authorized by him, shipping it, obtaining bills of lading from the
carriers, endorsing them away, or even selling the property and
obtaining a full price for it, can have no effect upon the rights
of the owner even in the case of a
bona fide
purchaser.
9. The statutes of Louisiana prohibit the issue of bills of
lading before the receipt of the goods, but they do not forbid
caring an illegal bill by supplying goods the receipt of which have
been previously acknowledged.
10. If the owner of goods willfully and wrongfully mixes them
with those of another of a different quality and value so as to
render them undistinguishable, he will not be entitled to any part
of the intermixture.
The libellants claim damages against the
Idaho for the
nondelivery of one hundred and sixty-five bales of cotton, part of
a shipment of two hundred bales for Liverpool, made by Thomas W.
Mann, and consigned to the order of James Finlay & Co. After
the shipment, the libellants purchased the cotton from Mann, who
endorsed to them the ship's bill of lading therefor. On the arrival
of the vessel at Liverpool, thirty-five bales were delivered to
Finlay & Co., but the remaining one hundred and sixty-five were
delivered to Baring Brothers & Co., in pursuance of an order
from William J. Porter & Co. of New York. Such a delivery was
not in accordance with the stipulations of the bill of lading, but
it is attempted to be justified by the alleged fact that Porter
& Co. were the true owners of the cotton, and as such had a
right, superior to that of the shippers, to control its
delivery.
In April, 1869, at New Orleans, W. J. Porter & Co., in due
course of business and in good faith, advanced to one Forbes a
large sum of money upon a bill of lading, which set forth a
shipment of one hundred and forty bales of cotton at New Orleans,
in the brig
C. C. Colson. The bill of lading was in the
ordinary form, executed by the lawful master of the
Colson, but in fact the cotton had not been shipped at the
time of its execution. Some few days after the date of the bill of
lading, and after the acceptance of the drafts by Porter & Co.,
Forbes did ship by the
Colson one hundred and forty bales
of cotton, as and for that described in the bill of lading sent to
Porter & Co. This cotton was duly delivered to the
Colson, was receipted for by the officers of the brig,
and,
Page 93 U. S. 577
although not then placed on board, was delivered to the vessel
on the wharf alongside.
Subsequently to this shipment and before the cotton was taken
into the hold of the brig, Forbes removed it from the custody of
the brig and shipped it on the steamship
Lodona, lying
near and bound for New York. The previous shipment of the cotton on
the
Colson was unknown to the officers of the
Lodona, and they issued bills of lading in the ordinary
form for the cotton they received.
Forbes shipped in the
Lodona twenty-five other bales,
and took one bill of lading for the whole one hundred and
sixty-five, on which second bill of lading he obtained a large
advance from Schaefer & Co., of New York, to whom he made a
second assignment of the cotton.
The bill of lading for one hundred and sixty-five bales, which
was sent to Schaefer & Co., included the one hundred and forty
bales which had been taken from the
Colson and delivered
to the
Lodona. The
Lodona arrived in New York on
the 29th or 30th of April. The one hundred and sixty-five bales
were taken directly to a warehouse by Schaefer & Co., who, on
the 1st of May, engaged freight in the
Idaho for two
hundred bales. On the same day, Schaefer & Co. sent for one
Corcoran, who went to Schaefer's house on the next day (Sunday),
and was then directed to remove all the marks and numbers from the
one hundred and sixty-five bales, and re-mark them with marks
similar to thirty-five other bales, which Schaefer & Co. had
stored in West Street. Corcoran did this as well as the short time
permitted, and on Monday the two hundred bales -- one hundred and
twenty of them marked S.A.L. and eight marked V.O.X. -- were
shipped in the
Idaho. This shipment was not made in
Schaefer's name, but while Corcoran was at work on the cotton, it
was nominally sold to Mann, Schaefer's clerk, and was shipped in
the name of Conklin & Davis, grocers, who permitted their names
to be thus used, and who endorsed the ship's receipts over to Mann.
On the 4th of May, Mann applied for and received the bill of lading
of the
Idaho for the two hundred bales on which this
action is brought. On the same day, Mann made a nominal sale of the
cotton to Hentz & Co., free on board.
Page 93 U. S. 578
Hentz & Co. were told to ask no questions, and on the 5th or
6th gave their note for the cotton to Mann, who paid it to
Schaefer, who held it till maturity, and when Hentz & Co. paid
the amount of it to Mann they obtained Schaefer's guaranty against
loss. Mann then paid the money over to Schaefer, who gave him a
check for $897.36, as for a difference in price between the sale to
Mann and his sale to Hentz & Co. Hentz & Co. acted under
the direction of Schaefer & Co., the real parties in interest
here in bringing this suit.
The court below dismissed the libel, and the libellants appealed
here.
MR. JUSTICE STRONG delivered the opinion of the Court.
In determining the merits of the defense set up in this case, it
is necessary to inquire whether the law permits a common carrier to
show, as an excuse for nondelivery pursuant to his bill of lading,
that he has delivered the goods upon demand to the true owner. Upon
this subject there has
Page 93 U. S. 579
been much debate in courts of law, and some contrariety of
decision.
In Rolle's Abr. 606, tit. "Detinue," it is said, "If the bailee
of goods deliver them to him who has the right to them, he is,
notwithstanding, chargeable to the bailor, who in truth has no
right," and for this, 9 Henry VI 58, is cited. And so, if the
bailee deliver them to the bailor in such a case, he is said not to
be chargeable to the true owner,
id., 607, for which 7
Henry VI 22, is cited. The reasons given for such a doctrine,
however satisfactory they may have been when they were announced,
can hardly command assent now. It is now everywhere held that when
the true owner has by legal proceedings compelled a delivery to
himself of the goods bailed, such delivery is a complete
justification for nondelivery, according to the directions of the
bailor.
Bliven v. Hudson River Railroad Co., 36 N.Y. 403.
And so, when the bailee has actually delivered the property to the
true owner, having a right to the possession, on his demand, it is
a sufficient defense against the claim of the bailor. The decisions
are numerous to this effect.
King v. Richards, 6 Whart.
418;
Bates v. Stanton, 1 Duer, 79;
Hardman v.
Wilcock, 9 Bing. 382;
Biddle v. Bond, 6 Best & S.
225. If it be said that by accepting the bailment, the bailee has
estopped himself against questioning the right of his bailor, it
may be remarked in answer that this is assuming what cannot be
conceded. Undoubtedly the contract raises a strong presumption that
the bailor is entitled; but it is not true that thereby the bailee
conclusively admits the right of the principal. His contract is to
do with the property committed to him what his principal has
directed -- to restore it or to account for it.
Cheeseman v.
Exall, 6 Exch. 341. And he does account for it when he has
yielded it to the claim of one who has right paramount to that of
his bailor. If there be any estoppel, it ceases when the bailment
on which it is founded is determined by what is equivalent to an
eviction by title paramount -- that is, by the reclamation of
possession by the true owner.
Biddle v. Bond, supra. Nor
can it be maintained, as has been argued in the present case, that
a carrier can excuse himself for failure to deliver to the order of
the shipper, only when the goods have been taken from his
possession by legal proceedings, or
Page 93 U. S. 580
where the shipper has obtained the goods by fraud from the true
owner. It is true that in some of the cases fraud of the shipper
has appeared, and it has sometimes been thought it is only in such
a case, or in a case where legal proceedings have interfered, that
the bailee can set up the
jus tertii. There is no
substantial reason for the opinion. No matter whether the shipper
has obtained the possession he gives to the carrier by fraud
practiced upon the true owner, or whether he mistakenly supposes he
has rights to the property, his relation to his bailee is the same.
He cannot confer rights which he does not himself possess, and if
he cannot withhold the possession from the true owner, one claiming
under him cannot. The modern and best-considered cases treat as a
matter of no importance the question how the bailor acquired the
possession he has delivered to his bailee, and adjudge that if the
bailee has delivered the property to one who had the right to it as
the true owner, he may defend himself against any claim of his
principal. In the late case of
Biddle v. Bond, supra,
decided in 1865, it was so decided, and Blackburn, J., in
delivering the opinion of the court, said there was nothing to
alter the law on the subject in the circumstance that there was no
evidence to show the plaintiff, though a wrongdoer, did not
honestly believe that he had the right. Said he, the position of
the bailee is precisely the same whether his bailor was honestly
mistaken as to the rights of the third person whose title is set up
or fraudulently acting in derogation of them. In
Western
Transportation Company v. Barber, 56 N.Y. 544, the Court of
Appeals of New York unanimously asserted the same doctrine,
saying
"The best-decided cases hold that the right of a third person to
which the bailee has yielded may be interposed in all cases as a
defense to an action brought by a bailor subsequently for the
property. When the owner comes and demands his property, he is
entitled to its immediate delivery, and it is the duty of the
possessor to make it. The law will not adjudge the performance of
this duty tortious as against a bailor having no title."
The court repudiated any distinction between a case where the
bailor was honestly mistaken in believing he had the right, and one
where a bailor obtained the possession feloniously or by force or
fraud, and we think no such distinction can be made.
Page 93 U. S. 581
We do not deny the rule that a bailee cannot avail himself of
the title of a third person (though that person be the true owner)
for the purpose of keeping the property for himself, nor in any
case where he has not yielded to the paramount title. If he could,
he might keep for himself goods deposited with him, without any
pretense of ownership. But if he has performed his legal duty by
delivering the property to its true proprietor, at his demand, he
is not answerable to the bailor. And there is no difference in this
particular between a common carrier and other bailees.
Recurring, then, to the inquiry whether Porter & Co. -- to
whose order the steamer delivered the one hundred and sixty-five
bales of cotton -- were the true owners of the cotton, a brief
statement of the evidence on which their title rests is necessary.
It originated as follows:
On the 1st of April, 1869, one J. C. Forbes obtained from the
master of the brig
Colson, then lying at New Orleans, a
bill of lading for one hundred and thirty-nine bales of cotton,
described by specified marks. The bill was endorsed and forwarded
by Forbes to Porter & Co., and drafts against it to a large
amount were drawn upon them, which they accepted, credited, and
paid on or before the 7th of the month. In fact, however, when the
bill of lading was given, no such cotton had been received by the
brig; but on the 5th of April the agent of Forbes bought one
hundred and forty bales, then at the shipper's press, and directed
them to be sent to the
Colson, marked substantially as
described in the bill of lading. These bales were accordingly
delivered from the press to the brig on the 8th of April, and the
first and second mate receipted for them. They were not actually
taken on board, but they were deposited on the pier, at the usual
and ordinary place for the receipt of freight by the
Colson, and an additional bill of lading for one bale only
was taken by Forbes, and by him endorsed and transmitted to Porter
& Co., together with an invoice of the one hundred and forty
bales corresponding with the bills of lading. The marks and numbers
on the bales were the same as those mentioned in the bills of
lading, excepting only that thirty-five were marked L instead of
thirty-six, and sixteen marked S instead of fifteen. There was also
a small difference in the aggregate weight.
Page 93 U. S. 582
That the cotton thus delivered to the
Colson was
intended to fill the bills of lading, one of which had been
previously given, is incontrovertible. They were so intended by the
shipper. If not, why were they thus marked? And why was a bill of
lading taken for one bale only, instead of for one hundred and
forty, and why was the invoice of the whole number sent? Such also
was plainly the understanding of the ship. The receipts of the
mates, and the fact that the master gave a bill of lading for one
bale marked S, when there were sixteen bales thus marked, leave
this beyond reasonable doubt. What then? Why, the one hundred and
forty bales thus shipped became from the moment of shipment the
property of Porter & Co., to whom the bills of lading were
endorsed. It is not only the utterance of common honesty, but the
declaration of judicial tribunals, that a delivery of goods to a
ship corresponding in substance with a bill of lading given
previously, if intended and received to meet the bill of lading,
makes the bill operative from the time of such delivery. At that
instant, it becomes evidence of the ownership of the goods. Thus,
in
Rowley v. Bigelow, 12 Pick. 307, it is said, a bill of
lading operates by way of estoppel against the master, and also
against the shipper and endorser.
"The bill acknowledges the goods to be on board before the bill
of lading is signed. But if, through inadvertence or otherwise, the
bill of lading is signed before the goods are on board, upon the
faith and assurance that they are at hand, as if they are received
on the wharf ready to be shipped, or in the shipper's own
warehouse, . . . and afterwards they are placed on board, as and
for the goods embraced in the bill of lading, as against the
shipper and master the bill will operate on those goods by way of
relation and estoppel."
Such is also the doctrine asserted in
Halliday
v. Hamilton, 11 Wall. 560,
78 U. S. 565,
and it is in harmony with the general rules that regulate the
transfer of personal property. We do not say that a title to
personal property may not be created between the issue of a bill of
lading therefor and its delivery to the ship, which will prevail
over the master's bill, but, in the absence of any such intervening
right, a bill of lading does cover goods subsequently delivered and
received to fill it, and will represent the ownership of the goods.
The cotton delivered on the 8th of April on
Page 93 U. S. 583
the pier for the
Colson, and received by the mates of
the brig, became, therefore, at the instant of its delivery, the
property of Porter & Co., who were then the endorsees of the
bills of lading. Its subsequent removal by Forbes to the
Ladona, either with or without the consent of the brig's
officers, could not divert that ownership.
There is nothing in the statutes of Louisiana which requires a
different conclusion. Those statutes prohibit the issue of bills of
lading before the receipt of the goods, but they do not forbid
curing an illegal bill by supplying goods the receipt of which have
been previously acknowledged. The statutes are designed to prevent
fraud. They are not to be construed in aid of fraud, as they would
be if held to make a delivery of goods to fill a fraudulent bill of
lading inoperative for the purpose.
The title of Porter & Co. to the one hundred and forty bales
must therefore, as we have said, be held to have been perfected
when they were delivered to the
Colson on the 8th of
April. No right in any other person intervened between the issue of
the bill of lading and the brig's receipt of the cotton to fill it.
It was after the title of Porter & Co. had thus become complete
that Forbes removed the one hundred and forty bales from the
custody of the
Colson and shipped it for New York on the
Ladona, together with twenty-five other bales, re-marking
it, and drawing drafts against this second shipment upon Schaefer
& Co. After carefully examining the evidence, we cannot doubt
that the one hundred and forty bales thus withdrawn from the
Colson were shipped on the
Ladona, and that they
came to the possession of Schaefer & Co., in New York, by whom
they were transferred, together with the other twenty-five bales,
to Mann, under whom the plaintiffs claim. The one hundred and
sixty-five bales, then, are the identical bales that were included
in the shipment on the
Idaho, and for which the bill of
lading was given to Mann. Of these, one hundred and forty were the
property of Porter & Co., fraudulently withdrawn from their
possession. It is hardly necessary to say that the title of the
true owner of personal property cannot be impaired by the
unauthorized acts of one not the owner. Taking possession of the
property, shipping it, obtaining bills of lading from the carriers,
endorsing away the bills of lading,
Page 93 U. S. 584
or even selling the property and obtaining a full price for it,
can have no effect upon the right of the owner. Even a
bona
fide purchaser obtains no right by a purchase from one who is
not the owner, or not authorized to sell. It must, therefore, be
concluded that Porter & Co. were the owners of at least one
hundred and forty of the bales shipped by Mann on the
Idaho, and covered by the bill of lading to enforce which
this libel was filed.
All that remains to be determined is whether Porter & Co.
had a right to the possession of the additional twenty-five bales
shipped with the one hundred and forty from New Orleans on the
Ladona, and shipped also on the
Idaho for
Liverpool, together with the thirty-five bales delivered there to
Finlay & Co. When the one hundred and forty bales were removed
from the custody of the
Colson and taken to the
Ladona, twenty-five other bales were mingled with them. On
the pier opposite that vessel they were re-marked, and all shipped
as one lot, under one bill of lading. When they reached New York,
they came into the possession of Schaefer, the endorsee of the bill
of lading given by the
Ladona, who knew, when he received
them, that the
Colson was short eight hundred or one
thousand bales. The newspapers had contained articles about the
fraud. He himself was a sufferer. He held some of the fraudulent
bills of lading of the
Colson, and he had heard that
Porter was in the same condition. So he has testified. With this
knowledge he set to work to guard against the possibility of
tracing the cotton. He caused the
Colson marks to be
removed from the one hundred and forty bales, and the
Ladona marks to be removed from both the one hundred and
forty and the twenty-five bales. He then had the whole re-marked,
making no distinction between the lot of one hundred and forty and
that of twenty-five, thus practically making the bales
undistinguishable. In addition to this, by an arrangement between
himself and Mann, his clerk, in the form of a sale, the cotton was
shipped
en masse by the
Idaho. It is impossible
for us to close our eyes upon the nature and purpose of this
transaction. It was a perfect confusion of the one hundred and
forty bales that belonged to Porter with the other twenty-five, and
it was not accidental. It was purposely made, with an
Page 93 U. S. 585
intent to embarrass or hinder the owner, and prevent him from
recovering his original property. There is no conceivable motive
for Schaefer's obliterating the marks, both of the
Colson
and
Ladona shipment, in so much haste (ordering it done on
Sunday), and substituting new marks, except to destroy the evidence
of title in any other person. That such was Schaefer's purpose may
also be inferred from his conduct in selling the same to Mann; from
Mann's sale on the same day to the libellants, telling them he did
not wish them to ask whether the cotton was really Schaefer's,
stating, also, that he had bought from Schaefer, and that Schaefer
guaranteed the transaction; from Mann's turning over the
libellants' note immediately to Schaefer, and Schaefer's giving a
guaranty before its payment that the maker should be held harmless.
The whole arrangement was manifestly a scheme of Schaefer to
obscure the title to the cotton, to prevent its being traced by the
true owner -- a scheme in the execution of which he was aided by
Mann and the libellants.
Now, what must be the legal effect of all this? What the effect
of intermingling the twenty-five bales with the one hundred and
forty that belonged to Porter, in such a manner that they could not
be distinguished, and so completely that it is impossible for
either party to identify any one of the one hundred and sixty-five
bales as a part of the lot of twenty-five, or of the larger lot of
one hundred and forty, shipped on the
Colson? We can come
to no other conclusion than this: the right of possession of the
whole was in Porter, and neither he who caused the confusion, nor
any one claiming under him, is entitled to any bale which he cannot
identify as one of the lot of twenty-five. It is admitted, the
general rule that governs cases of intermixture of property has
many exceptions. It applies in no case where the goods intermingled
remain capable of identification, nor where they are of the same
quality or value, as where guineas are mingled, or grain of the
same quality. Nor does the rule apply where the intermixture is
accidental, or even intentional, if it be not wrongful. But all the
authorities agree, that if a man willfully and wrongfully mixes his
own goods with those of another owner, so as to render them
undistinguishable, he will not be entitled to his
Page 93 U. S. 586
proportion, or any part, of the property. Certainly not unless
the goods of both owners are of the same quality and value. Such
intermixture is a fraud. And so, if the wrongdoer confounds his own
goods with goods which he suspects may belong to another, and does
this with intent to mislead or deceive that other and embarrass him
in obtaining his right, the effect must be the same. Thus it was
ruled in
Ryder v. Hathaway, 21 Pick. 306. Such is the
present case. The confusion of the bales of cotton was not
accidental. It was purposely made. The intermixture was evidently
intended to render any identification of particular bales
impracticable and to cover them against the search of a suspected
owner. It was therefore wrongful. And the bales were not of uniform
value. They differed in weight and in grade. But even if they were
of the same kind and value, the wronged party would have a right to
the possession of the entire aggregate, leaving the wrongdoer to
reclaim his own if he can identify it or to demand his proportional
part.
Stephenson v. Little, 10 Mich. 447. The libellants
have made no attempt to identify any part.
See, upon this subject of confusion of goods, 2 Kent's
Com. (11th ed.) 364, 365;
Hart v. Ten Eyck, 2 Johns.Ch.
62, 108;
Weil v. Silverston, 6 Bush (Ky.) 698;
Hesseltine v. Stockwell, 30 Me. 370.
It follows from all we have said that the delivery by the
Idaho of the one hundred and sixty-five bales, to the
order of Porter & Co., was justifiable, and that the libellants
have sustained no legal injury.
Decree affirmed.
