[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 375
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 376 The plaintiff's right to the teas in question was, we think, sufficiently established. It had entered into an arrangement with the firm of Ritchie, Griggs, Gillespie Co., of the city of Montreal, for a eredit of ten thousand pounds sterling, in favor of their agents at Yokahama, Charles Thorel Co., which credit was to be made available by the latter, by their drafts upon the London agents of the plaintiff, the London Joint Stock Bank. The amounts advanced were also procured upon the pledge or hypothecation by Thorel Co. of the teas purchased by them for the Montreal firm of Ritchie, Gregg, Gillespie Co., which teas, it was agreed, were to be shipped to Montreal or New York, to the order of the shipper. The advancements were also to be secured by the transfer and delivery to the plaintiff of the bill of lading, the invoice, and the consular certificate. It thus had possession of all the papers which usually confer title to property of this description, and upon the strength of the arrangement made and the muniments of title mentioned had paid the drafts drawn upon the teas to pay for the purchase of the same. These facts, we think, were abundantly established. It is claimed that the plaintiff has not proved that any draft was drawn by Thorel Co. under this arrangement, and no draft was produced on the trial, but the testimony of the manager of plaintiff's bank shows the letter of the firm of Ritchie, Gregg, Gillespie Co., requesting the credit for the sum aforesaid, to be availed of by drafts on plaintiff's agents in London, and he testifies that their drafts on the London Joint Stock Bank, the agents of the plaintiffs, were to be used by them in payment of the *Page 379 teas purchased, and that the bank transferred and transmitted the bill of lading and other papers, so that the plaintiff could collect the amount of the invoice and retire the drafts for the payment of which plaintiff held the bill of lading, and that the plaintiff afterwards paid the amount of said draft to the bank, retaining the said bill of lading as security for said amount. The same witness subsequently in his testimony refers to his previous answer in reference to his statement as to the manner in which the advance was made, and testifies that the conditions upon which the advance was made not being carried out, and the advance not having been repaid, the plaintiff received no compensation. This evidence abundantly shows that a draft was drawn, advances made, and that the teas were hypothecated as already stated to secure the amount to the plaintiff. As the evidence stood the plaintiff made out a clear and unquestioned right to the teas by indisputable facts showing the transaction, which was also supported by a possession of the bill of lading, and the other papers essential to establish its claim to the teas. And unless it was necessary that the bill of lading should be actually indorsed by Thorel Co., its title was beyond any dispute. We think the plaintiff's title was perfect and complete without such indorsement. The rule is well settled that property or goods shipped by a bill of lading drawn to order, may be transferred by delivery to a third person without any indorsement. (Bank of Rochester v. Jones, 4 N.Y., 497, 507;City Bank v. Rome, W. O.R.R. Co., 44 N.Y., 136.) Bills of lading are choses in action, and no rule is better established than that instruments of this character may be transferred for a valuable consideration by delivery only. Although the plaintiff was not a party to the bill of lading, it cannot affect his right to the contract contained in the same, if he acquired it lawfully. We are referred to some cases in support of the position that the assignment of the bill of lading does not transfer rights upon the contract, and that an action founded on the express contract contained in the bill of lading must *Page 380 be brought by the person with whom the ship-master contracted, or the owner of the goods. (Dows v. Cobb, 12 Barb., 310, and cases cited.) These cases are common law actions, brought before the Code of Procedure was in operation. Since that enactment, the real party in interest is authorized to sue on any contract or chose in action which has been transferred to him in his own name. It may also be remarked that this rule can scarcely be said to apply when the circumstances show that the contract was made with an express agreement that the goods mentioned in the bill of lading shall be hypothecated as security for advancements to be made.
The objection urged that there was no proof that there was an intent to pass the title by a delivery of the bill of lading, is not well founded. All the circumstances show such intent. It was passed over to the London Joint Stock Bank to secure the drafts Thorel Co. were making on the bank, and by them to the plaintiff, who had advanced ten thousand pounds upon the faith of the bill and the documents which accompanied it, and of other bills of lading which might be drawn. It cannot be doubted that the very purpose in view was to pass the title, as no other way was provided for the payment of plaintiff's advances. In CayugaCo. Bank v. Daniels (47 N.Y., 631), cited by the appellant's counsel, it was said that in considering the question of title, it must be assumed that the referee found that the bill of lading was delivered to the plaintiff with the intent to pass the title to it for the purpose of securing payment of their draft upon the defendants, discounted at the bank. At most, the intent here was a question of fact, and it is to be assumed that such intent was found by the jury. Some criticism is made upon the authorities cited to uphold the position that a bill of lading drawn to order may be transferred by delivery without an indorsement; but we think they are conclusive upon the question, and that the plaintiff's right to the teas under the bill of lading was fully established. Nor was there any proof that Thomas, Rigney Co. held a *Page 381 bill of lading and received the teas as the first party who presented the same.
Although it appears that five bills of lading had been signed, neither of them came into the hands of Rigney Co. The defendant was in possession of a bill of lading, but this did not confer any right upon Rigney Co. to take possession of the property. That firm never had lawful possession of a regular bill of lading, and acquired no right under the one in the possession of the defendant. The guaranty by Rigney Co. to deliver one as soon as they should receive it did not supply the defect or confer any title upon them. No claim appears to have been made upon the trial that Rigney Co. ever had a bill of lading in their possession, and no title was shown in them. It was the duty of the defendant before the delivery of the teas to require evidence that Rigney Co. had a bill of lading. The right of Rigney Co. was questioned and the suspicion of the defendant was aroused, for it was only upon a guaranty to deliver the regular bill indorsed for the teas that the property was delivered. The defendant with knowledge of the fact, that Rigney Co. had no bill of lading, took the risk of thus parting with the teas to a party who showed no right, and must abide the consequences of its unauthorized act. Under such circumstances the defendant is not protected upon the ground that its agents acted in good faith.
There was no error in the refusal of the judge to allow the defendant's counsel to go to the jury upon the question whether the Bank of Canada did not receive the proceeds of the teas. The proof did not show, or even tend to establish that such was the fact. Rigney Co. were paid for the teas and they did not pay over the amount received to the plaintiff, or on its account. It is true that they paid, three days after this money was collected, two drafts, amounting to $21,700, drawn by Ritchie, Gregg, Gillespie Co. on them, which came through the plaintiff's bank as collecting agents of that firm. Very likely these were paid in part from the proceeds of the teas; but there is no evidence that the *Page 382 plaintiff had knowledge of this fact, or that this money was received in any way for its own benefit, or was applied on the plaintiff's drafts, or on its own account.
As the case stood, the plaintiff was merely collecting these drafts for the benefit of the firm who drew them, and had no control over the moneys received, except to credit them to such drawers. The burthen of proof was on the defendant, and without testimony that they actually were applied, or intended to be applied, on the account of the plaintiff, there was no question for the jury upon the evidence in this respect. This fact could have been readily made to appear, if true, and in the absence of any such evidence it must be assumed that none could be given.
There is no ground for claiming that the freight should have been deducted. No such defence is set up in the answer. If it was, however, in the case, it was not available, as the plaintiff only recovered the value of the goods as fixed by the carriers at Yokohama, independent of the freight. Besides the freight has already been paid by Rigney Co., who assumed to take possession of the teas, or they are liable therefor, and the defendant's claim has thus been satisfied.
There was no error in any of the rulings upon questions of evidence, or in any respect, and the judgment should be affirmed.
All concur except ALLEN, J., not voting.
Judgment affirmed.