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Fluoro Electric Corp. v. Smith Transport Limited

Decided: December 2, 1959.


Goldmann, Conford and Haneman. The opinion of the court was delivered by Conford, J.A.D. Haneman, J.A.D. (dissenting).


The first count of the complaint in this action (the appeal is not concerned with the second count) recites that defendant, a common carrier, received from plaintiff on July 15, 1957 five reels of telephone cable for shipment to Barrington Air Force Base, Barrington, Nova Scotia; that the defendant received the goods in good condition; but that "when said merchandise arrived at its destination, the merchandise had been damaged in transit." Damages were sought in the sum of $1,585.35 plus interest.

An understanding of our disposition of this matter requires setting forth the more significant paragraphs of the pretrial order substantially in full, verbatim. They read:

"1. Breach of contract action.

2. On July 15, 1957 pltf an electrical contractor hired the deft a common carrier engaged in interstate commerce licensed by ICC to deliver five reels of lead covered telephone cables to Barrington Air Force base at Barrington Nova Scotia in the same condition the reels were received by pltf alleges shipment was received by deft in good order but on reaching its destination the articles were damaged to extent of $1585.35.

3. Deft admits making the contract of shipment admits the receipt of the five reels in good condition; denies that the damage, if any occurred subsequent to its delivery of the five reels to Barrington Air Force base. More specifically denies they were in fact damages (sic) while in transit.

6. Complaint and answer are deemed to state a cause of action of breach of contract. * * *

7. Sole issue involved is whether or not the goods in question whether they were received in the same condition as they were when shipped or in accordance with the wording of the contract, i.e. bill of lading."

The case was tried in the Law Division by a judge sitting without a jury. At the trial plaintiff proved the agreement for shipment of the reels in question from Newark, New Jersey to the Air Force base mentioned. This was very heavy merchandise, weighing 11,365 pounds in total. The bill of lading issued by defendant was introduced in evidence. The designated consignee was "Fluoro Electric

Corp." (plaintiff). Opposite the printed legend, "Mail or street address of consignee -- For purposes of notification only," appears the designation, "Barrington Air Force Base." The "Destination" is stated as "Barrington, Nova Scotia." There was one intermediate carrier, and the terminal carrier was Thompson Express. The testimony in the case indicates, without substantial dispute, that when the Thompson truck reached the Air Force base gates, the drivers found no representative of the consignee present. They were directed by the Air Force personnel to drive to a gravel-paved parking lot. The drivers having received instructions from their employer not to unload, the Air Force people unloaded by simply rolling the cables off the truck onto the ground, a drop of several feet. It is unquestionable, as undertaken to be proved by the plaintiff and found as a fact by the trial judge, that the damage to the cables and the reels for which this action was brought was sustained as a result of the dropping of the loaded reels to the ground.

Plaintiff's own direct proofs, so far as is discernible from the appendix to its brief, consisted substantially of proof of the agreement, the delivery to the carrier, and the damage to the merchandise. The precise theory for imputing liability to defendant was not expressed by plaintiff during submission of its direct case. On this appeal its primary position is that there was a duty on the part of the carrier to deliver the goods into the dominion of the consignee or its agent, and no one else, failing which, as here, there is absolute liability for damage to the goods occurring before such delivery. Secondarily, it is contended that defendant was responsible for the negligence of the terminating carrier -- constituted by the employees of the latter letting the loaded reels be dropped to the ground in a manner they knew was improper and likely to result in damage.

The proofs submitted by the defendant were mainly designed to establish that this shipment, under Interstate

Commerce Commission regulations and controlling tariffs, did not call for the unloading of the merchandise by the carrier in the absence of a special charge therefor.

In the course of its cross-examination of one of the defense witnesses plaintiff made it plain that one of the grounds for its claim was misdelivery of the goods to the Air Force personnel. This was also argued by its counsel in summation. Although no stenographic notes were made of the argument on summation, counsel so represented to this court, and the nature of the trial judge's oral opinion disposing of the matter adversely to plaintiff leaves no question as to this. The court said, in part:

"* * * The driver said that he had instructions from his employer that he was not to unload these goods and he was therefore faced with a very practical problem.

It is true, as Mr. Slavitt said, he could have left his truck there, but I think that would have been a rather hazardous thing to do under the circumstances. He could have returned also, Mr. Slavitt has suggested, but I think that might well have been an impractical thing to do because he would have had to go back the 250 miles which presumably took him at least a day or two driving a heavy load like that, and so he inquired at the Air Station and was advised that the Air Force personnel would unload the truck and store the merchandise until someone arrived from Fluoro Electric.

Now, the question is whether or not Smith Transport can be held responsible for that. I frankly do not see how they can. I do not think that it is up to the Smith Transport to show that they were not required to unload this truck. I think it was incumbent upon the plaintiff in this case to show that was a part of the contractual relationship established with Smith Transportation. The transportation agreement provided for unloading the merchandise at the place of destination.

Not only has the plaintiff not proved that, but the proof appears to be quite the contrary, that the rates charged and the tariff regulations that apply to this particular situation excluded unloading of merchandise at the point of destination * * *."

The legal principles controlling the responsibility and liability of a common carrier in respect to delivery of goods are well established. Under controlling federal legislation, delivery of an interstate shipment under a straight

bill of lading may be made only to the person lawfully entitled to possession of the goods or the named consignee, Bills of Lading Act, 49 U.S.C.A. § 81 et seq. , 89(a, b), and the carrier is absolutely liable for damages resulting from improper delivery. Bills of Lading Act, 49 U.S.C.A. § 90; North Pennsylvania Railroad Company v. Commercial Nat. Bank of Chicago , 123 U.S. 727, 738, 8 S. Ct. 266, 31 L. Ed. 287 (1887); Estherville Produce Co. v. Chicago, R.I. & P.R. Co. , 57 F.2d 50 (8 Cir. 1932); Rountree v. Lydick-Barmann Co. , 150 S.W. 2 d 173 (Tex. Ct. Civ. App. 1941). These cases hold that where the consignee or his agent cannot be found at the destination after reasonable inquiry, it is the duty of the carrier to have the goods stored on account of and at the expense of the owner. He may not relieve himself of liability by leaving them with any other person. Furthermore, even though the improper delivery was made by the terminal carrier, the initial carrier may be held liable therefor. 49 U.S.C.A. § 20, par. 11, applicable to motor vehicles under 49 U.S.C.A. § 319. Georgia, F. & A. Ry. Co. v. Blish Milling Co. , 241 U.S. 190, 36 S. Ct. 541, 60 L. Ed. 948 (1916); Galveston, H. & S.A.R. Co. v. Wallace , 223 U.S. 481, 32 S. Ct. 205, 56 L. Ed. 516 (1912).

Defendant contends that the consignee named in the bill of lading is either plaintiff or the Air Force base in the alternative, or plaintiff in care of the Air Force base. We do not agree. The bill of lading unequivocally indicates Fluoro Electric Corp. to be the consignee. As noted above, Barrington Air Force Base is designated only as the address of consignee. Therefore, for the carrier to have left the goods with one other than the consignee, unless an authorized agent of the latter, was clearly improper despite the convenience to the carrier in so doing. See Rountree, supra. Distinguish the case where there is a custom to consider delivery complete when the goods are merely brought to the destination and left there unloaded. See, e.g., Rice & Lockwood Lumber Co. v. Boston & M.R.R. , 308 Mass. 101,

31 N.E. 2 d 219 (Sup. Jud. Ct. 1941); cf. Standard Combed Thread Co. v. Pennsylvania R. Co. , 88 N.J.L. 257 (E. & A. 1915). No such custom was shown here as between carrier and shipper.

From the foregoing it seems clear that the reasoning and decision of the trial court to the effect that the carrier was not responsible merely because the rate charged did not include an obligation to unload is not ...

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