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Missouri Pacific Ry. Co. v. McFadden, 154 U.S. 155 (1894)

Missouri Pacific Railway Company v. McFadden

No. 318

Argued and submitted March 22, 1894

Decided May 26, 1894

154 U.S. 155


If a railroad company, for its own convenience and the convenience of its customers, is in the habit of issuing bills of lading for cotton delivered to a compress company, to be compressed before actual delivery to the railroad company, with no intention on the part of the shipper or of the carrier that the liability of the carrier shall attach before delivery on its cars, and the cotton is destroyed by fire while in the hands of the compress company, the railroad company is not liable for the value of the cotton so destroyed to an assignee of the bill of lading without notice of the agreement and course of dealing between the shipper and the carrier.

The defendants in error (plaintiffs below) sued in the Circuit Court of Hunt County, Texas, to recover the value of 200 bales of cotton, alleged to have been shipped from Greenville, Texas, to Liverpool, England, the shipments having been evidenced by two bills of lading, each for one hundred bales of cotton.

On application of the defendant below, the case was removed to the Circuit Court of the United States for the Northern District of Texas. After filing the record in that court, the pleadings were amended. The amended answer set up the following, among other, special defenses on behalf of the company:

"First. That while it is true that it had issued certain bills

Page 154 U. S. 156

of lading for said cotton, said cotton had not yet, indeed and in truth, been delivered to it. It was the habit and the custom of defendant, and well known to plaintiffs to be such, after cottons were placed on the platforms at the compress in Greenville, before the same was compressed, it would issue bills of lading therefor to consignors desiring to ship. Said cottons would be delivered to the compress for the purpose of compressing, and that at the time they were so delivered to it, the superintendent of the compress, or the agent of the compress, would check out such cottons intended, and the shipper would make out a bill of lading, which would be O.K.'d by the superintendent of the compress or its agent, and afterwards it would be brought to the agent of the defendant, and by him signed up, and defendant would actually receive said cotton only after it was compressed and delivered upon its cars. This course was pursued as a matter of convenience by the compress company and the shipper, but it was not intended by either the shipper or the defendant that the liability of the defendant should attach until the cotton was actually delivered upon its cars. This custom was well known to the plaintiffs, George H. McFadden & Bro., and to A. Fulton & Co., and the bills of lading were made out, according to this custom, by A. Fulton & Co., as herein shown, and accepted by A. Fulton & Co. according to such custom. At the time said bills of lading were made, the cotton was in the hands of the compress, according to the custom aforesaid, and had never been delivered to defendant, the defendant's liability as a common carrier had never attached, nor had any liability attached, but said cotton, while it was in the hands of the compress company, was wholly destroyed by fire, and never came to the hands of defendant. Defendant says said cotton was placed on said platform at said compress for the purpose of being compressed by A. Fulton & Co.; that they well knew, intended, and expected said cotton should be compressed before it was shipped. Said cotton, while at the compress, was under the control of A. Fulton & Co. or their agent, the compress company."

The answer thereupon proceeded to set out other matters, to which it is unnecessary to refer.

Page 154 U. S. 157

The plaintiff replied to the amended answer and excepted to the first count as follows:

"And they specially except to the first count in defendant's special answer insofar as the same attempts to set up a custom of the manner of receiving cotton and issuing bills of lading, because the same does not show that the custom was such as is recognized and binding in law, but attempts to set up a custom which is contrary to law, and because the same does not show that it was such a custom as would relieve the defendant from liability on a contract in writing."

The reply then proceeded to except to other parts of the defendant's answer.

The court sustained the plaintiffs' exception to the first count of the amended answer, to which ruling exception was reserved. Thereupon the facts were stated to be, 1st, that the bills of lading had been issued to Fulton & Co.; 2d, that they were assigned to the plaintiffs; 3d, that the value of the cotton was $8,647.83 at the time it was destroyed, and that the defendant had never paid therefor.

Upon this evidence, the case was submitted to the court without a jury, and the court found for the plaintiffs and gave judgment for the value of the cotton. The case is brought here by writ of error.

Page 154 U. S. 159

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