Sec. 160. (§ 123.) Liability of carrier when goods not received, but receipt given.—The principle that the agent of a common carrier has no authority to sign bills of lading unless the goods have been actually delivered to him is also well settled in this country. Where, therefore, a bill of lading is signed by the agent when no goods are in fact received, evidence showing that the goods described were not delivered to the carrier as well as the circumstances under which the bill of lading was issued will be admissible. The leading case is that of The Schooner Freeman v. Buckingham,35 in which the attempt was made in a court of admiralty to hold the vessel upon a bill of lading under the maritime rule that the ship is bound to the cargo. It appeared that the goods were never delivered on board the schooner as recited in the bill of lading, but that the master of the vessel had been induced by fraud and misrepresentation to sign it. It was held that the responsibility of the owner and the liability of the ship itself were convertible terms, the vessel not being liable if the owners were not; and that the master having signed the bill of lading without having received the goods, there having been in fact no such goods, had acted without authority, and that therefore neither the ship nor the owner could be held liable, although the libelant had advanced his money upon the faith of the bill of lading without any knowledge of the fraud, and was therefore a bona-fide holder for a valuable consideration. In a later case36 in the same court, Mr. Justice Miller, speaking of the nature and effect of a bill of lading, said: "It is an instrument of a twofold character. It is at once a receipt and a contract. In the former character it is an acknowledgment of the receipt of property on board his vessel by the owner of the vessel. In the latter it is a fied, unless he can show that the whole amount, or some part of it was in fact not shipped. If the owner is able to make such proof, he is, to that extent, relieved from the obligation which would other wise attach to him under the bill of lading. Smith v. Navigation Co. (1896), App. Cas. 70, 65 L. J. P. C. 8. 35. 18 How. 182. 36. Pollard v. Vinton, 105 U. S. 7. contract to carry safely and deliver. The receipt of the goods. lies at the foundation of the contract to carry and deliver. If no goods are actually received, there can be no valid contract to carry or to deliver. '37 Sec. 161. (§ 124.) Same subject-How in case of bona fide holder. By the weight of authority in the United States, it .is held that bills of lading and other similar contracts of affreightment which are signed by the carrier's agent when no goods are in fact delivered to him are void even as to innocent and bona fide holders; and the reason for the rule is said to be that, the master or agent having no authority to sign them until the goods are actually delivered, they are nullities as to the party who has obtained them, and, bills of lading not being negotiable instruments, the assignor can confer no greater right than he himself has; and for the further reason that the holder having advanced upon them innocently, 37. See, Iron Mt. R'y Co. v. Knight, 122 U. S. 79; Baltimore, etc., R. Co. v. Wilkens, 44 Md. 11; Miller v. The Railroad, 90 N. Y. 430; American Sugar Refining Co. v. Maddock, 93 Fed. Rep. 980, 36 C. C. A. 42; The Willie D. Sandhoval, 92 Fed. Rep. 286; Lazard v. Merchants' & Miners' Transportation Co., 78 Md. 1, 26 Atl. Rep. 897; Railroad Co. v. Nat'l Live Stock Bank, 178 Ill. 506, 53 N. E. Rep. 326, reversing 59 Ill. App. 451; Steamship Co. v. Kelley, 126 Fed. Rep. 610, 61 C. C. A. 532, reversing Kelley v. Steamship Co., 120 Fed. Rep. 536, where bills of lading for goatskins were issued by the agent of the vessel while the goods were in the warehouse, and sheepskins were fraudulently substituted in a number of bales. Sec. 4 of the Harter Act (27 Stat. L. 445), provides that it shall be the duty of the owner, master or agent of any vessel transporting merchandise to issue a bill of lading stating, among other things, the quantity of goods received, and that the same shall be prima facie evidence of the receipt of the merchandise described in it. Held, that the construction of this section did not alter the rule previously existing in the federal courts, and that a false bill of lading was not binding on the owner or the ship. The Isola di Procida, 124 Fed. Rep. 942. See also, Campania Naviera Vascongada v. Churchill & Sim (1906), 75 L. J. K. B. 94. But the carrier may cure the invalidity of the bill of lading by subsequently receiving the goods described in it. The Idaho, 93 U. S. 575, 23 L. Ed. 978; Robinson v. Railway Co., 16 Fed. 57; The Farwell, 8 Biss. 64, Fed. Cas. No. 8, 426. being misled by the act of the master or agent, he must be the sufferer, upon the principle that when two parties are equally innocent, he who has reposed confidence and thus brought loss upon himself must bear it.38 But, as will be seen in the following section, this rule has not been uniformly followed, and is opposed by courts of eminence and by reasons of great cogency. Sec. 162. Same subject-The contrary view.-Other courts,' however, have refused to sanction the rule as followed by the supreme court of the United States, and hold that where the carrier's agent signs a bill of lading which recites that goods have been received, when no goods have in fact been delivered to him, the statement as to the receipt of the goods amounts to a representation by the carrier of a fact which was, or, in the ordinary course of business, ought to have been within his knowledge, and that as to an innocent and bona fide holder of the bill of lading, the carrier will be estopped from claiming that he did not receive the goods. A leading case taking this view is that of Armour v. The Railroad,39 decided by the court of appeals of New York. In that case, the party having produced to the agent of the railroad forged warehouse receipts 38. Friedlander v. Railway Co., 130 U. S. 416; Pollard v. Vinton, 105 U. S. 7; Iron Mountain R'y v. Knight, 122 U. S. 79; Williams v. Railroad, 93 N. C. 42; Freeman v. Buckingham, 18 How. 182; The Lady Franklin, 8 Wall. 325; National Bank of Commerce v. Railway Co., 44 Minn. 224, 46 N. W. Rep. 342, 560, 20 Am. St. Rep. 566, 9 L. R. A. 263; Swedish American Natl. Bank v. Railway Co., Minn. -> 105 N. W. Rep. 69; The Asphodel, 53 Fed. 835; American, etc., Co. v. Maddock, 93 Fed. 980, 36 C. C. A. 42; The Isola Di Procida, 124 Fed. 942; Bank v. Lavelle, 52 Mo. 380. But see, Smith v. Railway Co., 74 Mo. App. 48; Roy & Roy v. Railway Co., -- Wash. - 85 Pac. Rep. 53; Hen- Bills of lading are not by the for certain goods, and having thereby obtained from the agent receipts or bills of lading for them, making the pretended freight deliverable to the plaintiff as consignee, and having thereupon drawn upon the plaintiff attaching the railroad receipts to his draft which the plaintiff paid, it was held that the railroad was bound to make good to the plaintiff, the defrauded party, his loss. The case was said, however, to differ from the cases referred to, in the fact that by the railroad receipts or bills of lading, the goods were made deliverable directly to the plaintiff, and that no assignment to him by the party practicing the fraud had been necessary or had been resorted to. The receipts were therefore equivalent to direct representations to the plaintiff that the goods had been delivered to the road on his account, which it was estopped from denying. The case might have admitted of an argument, said the court, had the plaintiff been compelled to derive his title through the indorsement of another who, it was conceded, had none. In later cases, however, this distinction is deemed to be of no importance, and the carrier is held liable to the assignee. 40 Sec. 163. (125.) Recitals as to condition of goods, how far conclusive. It has likewise been determined that the usual 40. Batavia Bank V. Railroad Co., 106 N. Y. 195. Following the New York rule are Brooke v. Railroad Co., 108 Pa. St. 529; Sioux City Railroad Co. v. Bank, 10 Neb. 556; Savings Bank v. The Railroad, 20 Kan. 519; Railway Co. v. Adams, 4 Kan. App. 305, 45 Pac. Rep. 920; Railroad Co. v. Larned, 103 Ill. 293; Dean v. Driggs, 137 N. Y. 274, 33 N. E. Rep. 326, 33 Am. St. Rep. 721. In Mississippi it is provided by statute that the acknowledgment of the receipt of the goods by the carrier will be conclusive if the bill of lading reaches the hands of a bona fide holder. See The Guid ing Star, 62 Fed. Rep. 407, 10 C. C. A. 454, 22 U. S. App. 344. But if a person surreptitiously procures bills of lading from the carrier for goods not shipped, and forwards the bills of lading with drafts attached to the consignee who pays the amount of the drafts, the carrier will not be liable to such consignee where the person who has thus procured the bills of lading later ships goods of like amount and kind to those called for by the previous bills of lading, and the consignee accepts such goods in substitution. Railroad Co. v. Milmine, 57 Ill. App. 291. recital in such instruments that the goods are in good order has reference only to the external appearance, either of the goods themselves or of the packages into which they are put. Hence, it is always competent for the carrier to show, notwithstanding such an admission, that the loss or damage was caused by the spoiling of the goods from natural decay before they could be delivered, or that they had wasted from defects in the vessels in which they were contained, or that it arose from the unskil ful or improper manner in which they were packed, or that they had deteriorated or were damaged at the time they were delivered to him.41 He is not presumed to know the quality of the goods, nor can he refuse to carry them, whatever it may be, if they are fit to carry and are of the kind he usually carries, nor can he, ordinarily, know the condition of the contents of the packages or vessels brought to him for transportation. It cannot be supposed, therefore, that he intends by such a recital to admit more than that the goods are in an apparently fit condition for shipment. And such is the construction which these words have received. If the damage has proceeded from any such hidden cause, whether naturally inherent in the 41. Nelson v. Woodruff, 1 Black, 156; Clark v. Barnwell, 12 How. 272; Hastings v. Pepper, 11 Pick. 41; Bradstreet . Heran, 2 Blatch. 116; Keith v. Amende, 1 Bush, 455; Richards v. Doe, 100 Mass. 524; The Olbers, 3 Ben. 148; The Oriflamme, 1 Sawyer, 176; Arend v. The Liverpool, etc., Co., 64 Barb. 118; Hazard v. Railroad Co., 67 Miss. 32, 7 So. Rep. 280; Missouri, etc., R'y Co. v. Fennell, 79 Tex. 448, 15 S. W. Rep. 693; Railway Co. v. Holder, 10 Tex. Civ. App. 223, 30 S. W. Rep. 383; Bath v. Railway Co. (Tex. Civ. App.), 78 S. W. Rep. 993, citing Hutchinson on Carr.; Roth v. Packet Co., 12 N. Y. Supp. 460; Jean Garrison & Co. v. Flagg, 90 N. Y. Supp. 289, 45 Misc. 421; Whitman v. Vander bilt, 75 Fed. 422, 21 C. C. A. 422, 38 U. S. App. 693; Argo S. S. Co. v. Seago, 101 Fed. 999, 42 C. C. A. 128; Mears v. Railroad Co., 75 Conn. 171, 52 Atl. Rep. 610, 96 Am. St. Rep. 192, 56 L. R. A. 884; Railway Co. v. Neel, 56 Ark. 279, 19 S. W. Rep. 963, citing Hutchinson on Carr.; Foley v. Railroad Co., 96 N. Y. Supp. 182. The same rule applies to the recitals made in way-bills and the various reports made along the road. Missouri, etc., R'y Co. v. Ivy, 79 Tex. 444, 15 S. W. Rep. 692. A fortiori is there no warranty of quality where the bill of lading states that the contents of the package are unknown. Iron Mt. R'y Co. v. Knight, 122 U. S. 79. |