Opinion
No. 31.
November 9, 1931.
Appeal from the District Court of the United States for the Southern District of New York.
Action by George Thoms and another, as administrators c.t.a. of Henry De Haeseleer, deceased, against D.C. Andrews Co., Inc. From a judgment for defendant on a directed verdict, plaintiffs appeal.
Affirmed.
The plaintiffs are administrators, with the will annexed, of the estate of Henry De Haeseleer, late of France. This action was brought to recover the damages claimed to have been sustained by De Haeseleer because of the alleged conversion by the defendant of goods while in transit from the United States to De Haeseleer in France.
The defendant, during the period involved in this case, was in the freight forwarding business in New York. On December 31, 1918, the Troy Wagon Works Company of Troy, Ohio, wrote the defendant that it had received an order from its Paris representative for twenty-five trailers which it expected to have ready for shipment soon, and asked whether the defendant could forward the goods promptly to its representative in France, Mr. De Haeseleer. The defendant replied by letter dated January 2, 1919, that it would undertake to do so, and mentioned a recent shipment of such trailers it had forwarded for the Troy Company to Mr. De Haeseleer and for which De Haeseleer had obtained a special priority permit from the French officials, expressing the hope that he had succeeded in interesting the French authorities in connection with these trailers. The trailers were shipped by rail to New York consigned to the defendant for export to De Haeseleer, but difficulty was encountered in getting space for them on any ship, and considerable correspondence passed between the Troy Company and the defendant relative to the shipment before space was obtained. Finally the defendant secured space for them on the steamer Peter H. Crowell, and so notified the Troy Company on March 10, 1919. This ship was about to arrive at New York, and the defendant had arranged for a permit to ship to be issued as soon as possible after the steamer's arrival. Under date of March 18, 1919, the Troy Wagon Works Company wrote the defendant "with reference to shipment of trailers to H. De Haeseleer, Paris, France, stating that they will go forward on SS `Peter Crowel,' please have the ship's papers made to the order of The Troy Wagon Works Company." The defendant also received a telegram from the Troy Company to the same effect, and on March 24, 1919, wrote that company as follows:
"We received your telegram Saturday reading: `Ship papers on twenty-five trailers for H. De-Haeseleer Paris your file CT six hundred T must be made to the order of Troy Wagon Works Company' and will see that you are supplied with S/S papers in your name to Order as you desire.
"We hope to be able to lodge these papers with your New York Office in keeping with instructions we received from them within the course of a day or two."
As promised in this letter, the defendant did arrange matters so that the trailers were shipped to the order of the Troy Wagon Works. It notified the ship's agent, pursuant to instructions from the Troy Company, not to notify De Haeseleer upon arrival, but to notify another whom it then knew the Troy Company intended to have receive the tractors instead of De Haeseleer. As a result, De Haeseleer was unable to obtain any of these trailers. Later, on being advised by the Troy Company that De Haeseleer was not interested when a cable from him making inquiry about the trailers was referred to that company, the defendant did not give De Haeseleer any information about the trailers. Although the defendant had no notice as to De Haeseleer except that he was the representative in France of the Troy Company and the ultimate consignee of the trailers when they were shipped to the defendant to be forwarded, he had in fact when he purchased the trailers a sufficient sum to his credit with the Troy Company to pay for them and was the actual owner of the goods when the shipment started from Ohio in accordance with an arrangement he had with the Troy Company to ship the trailers to him. By following the instructions of the Troy Company, the defendant unknowingly enabled that concern to get into a position to discount a draft attached to the bill of lading and drawn on one Collinet who was the person to be notified in accordance with the final order of the Troy Company. In this way the defendant, without knowing or having any reason to believe that De Haeseleer had paid for the goods in advance, made it possible for the Troy Company to perpetrate the fraud which resulted in depriving De Haeseleer of his goods.
Afterwards, De Haeseleer obtained a judgment against the Troy Company for conversion of the trailers. Before the judgment was entered, that company was adjudicated a bankrupt. Subsequently this action was brought.
George Thoms, of New York City (Francis Colety, of New York City, of counsel), for appellants.
Arthur Mayer, of New York City (Frank J. McEwen and Edward A. Alexander, both of New York City, of counsel), for appellee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
Stripped of all nonessentials, this case discloses a purchaser of goods, who had paid for them and left them with the seller to be shipped to him by the seller, seeking to recover from one whom the seller employed to act as its agent in forwarding the goods by water and to whom the seller had shipped them by rail to seaboard for such purpose, and who then, without notice of the true ownership, complied with the directions of its principal, the seller, to return the goods, in legal effect, to its principal from whom they had been received.
Under the facts shown, the Troy Company was the undisclosed agent of De Haeseleer to ship the trailers to him in France. Furthermore, the defendant was the agent of the Troy Company which was acting within the actual scope of its authority as the agent of De Haeseleer when it shipped the trailers by rail consigned to the defendant at New York for the purpose of being shipped by water by the defendant to De Haeseleer in France. They were received by the defendant who then tried to forward the shipment to De Haeseleer until notified by De Haeseleer's agent, the Troy Company, to ship them to its order. Until such directions were given the defendant, concededly no wrong had been done to anybody by anybody. But the Troy Company, De Haeseleer's agent and this defendant's principal, did convert the goods to its own use and became able to do so by directing its agent, in effect, to return the goods to it instead of shipping them to De Haeseleer. Yet, far from having any notice that De Haeseleer actually owned the trailers, the defendant knew him only as the Troy Company's representative in France to whom the trailers were, at first, to be sent. The transaction appeared to be that of a manufacturer of trailers in this country shipping its product to its foreign representative to be disposed of by him. In this situation, the defendant had no choice but to follow the instructions of the supposed owner, its principal. In re Columbus Buggy Co. (C.C.A.) 143 F. 859, 861; Sedgwick v. Macy et al., 24 App. Div. 1, 49 N.Y.S. 154. Having done so, it simply remains to be determined whether as a matter of law it could do so without liability to the person to whom its principal at first instructed it to ship and who was actually entitled to receive the shipment.
The Troy Company, as consignor, either as the actual owner as it appeared to be or the agent of the purchaser as it was, had the absolute right as between itself and its agent, the defendant, to direct any change in their destination. Howell v. Morlan, 78 Ill. 162. Indeed, the possession of the defendant as the agent of the Troy Company was to all intents and for all purposes still the possession of its principal, the Troy Company. The situation at New York when the defendant was notified to ship to the order of the Troy Company was just as it would have been had the Troy Company originally consigned the trailers to itself in New York for export to De Haeseleer instead of consigning them to its agent for such export. This defendant was not an independent carrier, but merely the forwarding agent of the Troy Company, and that sets this case apart from the many that have been so liberally cited to us which deal with the rights of consignors and consignees, and purchasers and sellers when goods are in the possession of an independent carrier for transport. We are not now concerned with the rights of De Haeseleer as against the Troy Company.
If the defendant be looked upon as a bailee, the cause of the plaintiffs is not advanced, for the decision is controlled by the law relating to the liability to the owner, if any, of a bailee who without notice of such ownership or demand from the owner returns goods to the person who has delivered them to him. Without such notice and demand, a bailee is not guilty of any conversion of chattels who but returns them to the bailor. Gurley v. Armstead, 148 Mass. 267, 19 N.E. 389, 2 L.R.A. 80, 12 Am. St. Rep. 555; Manny v. Wilson, 137 App. Div. 140, 122 N.Y.S. 16, affirmed 203 N.Y. 535, 96 N.E. 1121; Parker v. Lombard et al., 100 Mass. 405; Leonard v. Tidd, 3 Metc. (Mass.) 6; Hill v. Hayes, 38 Conn. 532. When this defendant had fully complied with the instructions it received from the Troy Company, it had done nothing but return the goods to the same custody in which De Haeseleer himself had left them, and restored to the Troy Company merely the same power over them which that company previously had been placed by the owner in a position to exert; all without notice that any rights of De Haeseleer's were being, or would be, infringed.
As there was no dispute regarding the facts which determine the legal rights of these parties, a verdict for the defendant was properly directed. Small Co. v. Lamborn Co., 267 U.S. 248, 45 S. Ct. 300, 69 L. Ed. 597; North Pennsylvania R.R. Co. v. Commercial Nat. Bank, 123 U.S. 727, 8 S. Ct. 266, 31 L. Ed. 287.
Judgment affirmed.