Story Case

The United Film Corporation sent a shipment of scenery via the New York Central Railroad, from New York City, destined for the Federal Picture Show Company at Milwaukee, Wisconsin. It was the duty of the New York Central Railroad Company to deliver the shipment to the Goodrich Transfer Company at Chicago. The shipment was made on August 1, 1915; it arrived in Chicago on August 4,1915, and was about to be taken to the docks of the transport company when the United Film Corporation learned that the Federal Picture Show Company was financially embarrassed, and telegraphed the New York Central company to stop the goods in transit. The railroad company permitted the shipment to rest in its freight house. During the night of August 4, the freight station, with its contents, was destroyed by fire. When the United Film Corporation attempted to collect for the loss of its scenery, the company refused to pay, on the ground that it was not a common carrier as to the shipment, but an ordinary bailee, and the loss was not caused by its own negligence. Is this a good defense ?

Ruling Court Case. Rawson Vs. Holland, Volume 59 New York Reports, Page 611

Rawson delivered a consignment of merchandise to Holland, who was a common carrier, at New York, "to be forwarded to Detroit only." The goods, however, were marked "Day and Lathrop, Dryden, Michigan, via Ridgeway." The Grand Trunk Railway was the customary and usual carrier of goods from Detroit to Ridgeway. Upon the arrival of the goods at Detroit, they were deposited in Holland's warehouse. Holland did not offer them to any carrier beyond that point, but permitted them to remain in his warehouse. About twenty days later, the merchandise was destroyed by fire, without negligence on the part of Holland. Raw-son brings this action to recover for the loss, claiming that at the time of the destruction of the goods, Holland's liability as a common carrier continued.

Holland contended that his liability as carrier ended when the goods arrived safely in Detroit, and that, thereafter, his liability was that of an ordinary bailee.

Mr. Justice Andrews said: "The defendant was not bound to carry the goods beyond Detroit. He performed his contract in respect to the actual carriage, upon carrying them to that place. But, the obligation of a carrier is not fully discharged by transporting the goods from the place of shipment to the place of consignment, or in case of an intermediate carrier, from the place of shipment to the end of his route. The undertaking to transport the goods to a particular place, includes the duty of delivering them there in safety.

"In case of an intermediate carrier, who accepts goods to be carried to a point, directed beyond the termination of his route, the law from such direction, in the absence of other special circumstances, implies an undertaking on his part to deliver them, at the end of his route, to the next succeeding carrier in the line of transportation, and if such carrier refuses or neglects to receive them, the first carrier may store the goods, and then the nature of the bailment changes, and he is relieved from the stringent responsibility originally assumed."Holland failed to deliver to the connecting carrier, and, therefore, he is liable as a common carrier. Judgment was given for Rawson.

Ruling Law. Story Case Answer

When a person ships goods from one point to another, and it is necessary that the goods shall go over two routes, even in the absence of an express agreement to that effect, it becomes the duty of the first carrier to forward them when he has carried them to the end of his route. If the shipper gives express directions, as to the route by which they will be forwarded, it is the duty of the first carrier to observe such directions. The carrier is liable, as insurer, until the goods have been delivered to the next carrier. This liability, as an insurer, may, however, under certain circumstances, change to that of an ordinary bailee. Thus, if the carrier next in the line of transportation, refuses or neglects to take the goods, the first carrier may store the property in its own warehouse, and it becomes responsible merely as a bailee, for its own negligence. Also, if the shipper for any reason stops the transit of the goods, as in the Story Case, where a stoppage in transit order was given, the carrier's liability for the goods becomes that of an ordinary bailee, and it is liable, only in case the loss has been caused by its own negligence. Since there was no negligence on the part of the carrier, in the Story Case, the United Film Corporation cannot recover.