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§ 1734c. It follows from the foregoing statement of principles applicable to the questions under consideration: First: That the indorsee of a bill of lading attached to a draft which he acquires upon the faith and credit of the bill of lading, takes it subject to the agreement between the consignor and consignee of the goods; and that if the consignor has the right to withhold the bill of lading until the draft is paid, the bona fide holder of the draft has the same right." Second: That in the absence of a special agreement, a time draft with a bill of lading for the goods, for or on account of which it is drawn, indicates that the bill of lading is to be surrendered to the drawee of the draft upon its acceptance; and that the holder of the draft cannot withhold its delivery when the acceptance is given, unless the shipper of the goods had a right to do so.5 Third: That where a bill of exchange is drawn upon a shipment, on time, with the bill of lading attached, the holder cannot (at least in the absence of proof of a local usage to the contrary, or of the imminent insolvency of the drawee) require the drawee to accept the bill of exchange, except on the delivery of the bill of lading; and when in consequence of the refusal of the holder to deliver the bill of lading,

if he fails to perform this duty, and in consequence thereof acceptance be refused, the drawer and indorsers of the draft are discharged." In his learned and comprehensive opinion, Justice Strong cited, in support of his views, Lanfear v. Blossom, 1 La. Ann. 148, and Wisconsin M. & F. Fire Ins. Co. v. Bank of British N. A., 21 Up. Can. Q. B. 284, which are in point; and also Shepherd v. Harrison, L. R., 4 Q. B. 493, 5 H. L. 133; Coventry v. Gladstone, L. R., 4 Eq. 493; Schuchardt v. Hall, 36 Md. 590; Marine Bank v. Wright. 48 N. Y. 1; Cayuga Bank v. Daniels, 47 N. Y. 631; Gurney v. Behrend, 2 El. & Bl. 622, and other cases. And he distinguished and explained Seymour v. Newton, 105 Mass. 272; Gilbert v. Guignon, L. R., 8 Ch. 16; Newcomb v. Boston, etc., R. Co., 115 Mass. 230; Stollenwerck v. Thacher, 115 Mass. 224, and Bank v. Bayley, 115 Mass. 228. See Moore v. Louisiana Nat. Bank, 44 La. Ann. 99, 10 So. 407, 32 Am. St. Rep. 332; The Commercial Bank v. Chieago, etc., Ry. Co., 160 Ill. 401, 43 N. E. 756. But it has been held that where the bill is drawn at three days sight with a bill of lading attached, indorsed in blank, it is the duty of the bank to require the draft paid before delivering the bill of lading. McArthur Co. v. National Bank, 122 Mich. 223, 81 N. W. 92. 58. Heiskell v. Farmers, etc., Bank, 89 Pa. St. 155; Dows v. National Exchange Bank, 91 U. S. (1 Otto) 618; Emery v. Irving Nat. Bank, 25 Ohio St. 360; Marine Bank v. Wright, 48 N. Y. 1; First Nat. Bank of Starksville v. Meyer & Co., 43 La. Ann. 1, 8 So. 433.

59. National Bank v. Merchants' Bank, 91 U. S. (1 Otto) 93; Marine Bank v. Wright, 48 N. Y. 1.

60

acceptance is refused, and the bill of exchange is protested, the protest will be without cause, and the drawer will be discharged. Fourth: That the drawee of the bill of exchange attached to the bill of lading is not entitled to the bill of lading or the property therein described except upon acceptance, or payment of the bill of exchange according to the nature of the case, and the agreement with the shipper of the goods who drew the draft.61 Fifth: That a party discounting a bill of exchange on the faith of the indorsement of a bill of lading for goods as security for the draft as he would acquire if the goods themselves were delivered to him instead of the bill of lading.62

§ 1734d. Genuineness of bill of lading accompanying bill of exchange. It is not the duty of a party discounting a bill of exchange to inquire into the genuineness of a bill of lading accompanying it in order to hold another bound by a letter of credit which authorizes the bill of exchange to be drawn upon the letter writer provided it be accompanied by the bill of lading; and if the letter writer pay the bill of exchange, and afterward discovers that the bill of lading is forged, he cannot recover back the money on the ground of mistake of fact.63 And the acceptor of a bill of

60. Lanfear v. Blossom, 1 La. Ann. 148; National Bank v. Merchants' Bank, 91 U. S. (1 Otto) 100.

61. Bank v. Bayley, 115 Mass. 228; National Bank v. Merchants' Bank, 100 Mass. 104; Marine Bank v. Wright, 48 N. Y. 1. A merchant in Rochester, N. Y., gave an order to a produce dealer in North Carolina to make shipment of a car of choice potatoes. The purchaser, in a telegram, said: “Will give three delivered choice, draft B. L. if accept answer." The produce dealer telegraphed back that three twenty-five was the lowest price, to which the Rochester merchant replied by wire, saying: "Will accept car at your price if stock fine; ship immediately." The potatoes were shipped with bill of lading indorsed to be delivered to the purchaser, attached to which was a draft, which the purchaser declined to pay unless he was allowed first to inspect the potatoes at the freight office in Rochester. This the railroad company refused to allow unless the purchaser produced the bill of lading. Held, that the promise to pay the draft "B. L." meant that the purchaser would pay the amount of the draft upon presentation of the bill of lading properly indorsed and that the purchaser had no right to an inspection of the potatoes before accepting the draft. Whitney v. McLean, 4 App. Div. 449, 38 N. Y. Supp. 793.

62. First Nat. Bank v. Kelly, 57 N. Y. 34; ante, § 1731a; Hathaway v. Haynes, 124 Mass. 311; Heiskell v. Farmers' Bank, 89 Pa. St. 155. But see on this subject Mears v. Waples, 4 Houst. 62.

63. Ulster Bank v. Synatt, 5 Irish Eq. 595; Woods v. Thiedeman, 1 Hurl. & C. 478; Lehman v. Young, 63 Ala. 519.

exchange, discounted by a bank, with a bill of lading attached which the acceptor and the bank regarded as genuine at the time of acceptance, but which was, in fact, a forgery, has been held bound to pay the bill at maturity.

SECTION III.

THE ELEMENTS OF A BILL OF LADING.

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1735. As to the form and contents of bills of lading.- Bills of lading are usually signed in sets of three, one of which is retained by the freighter or consignor, one sent to the consignee, and one kept by the master for his own use.65 But sometimes they are granted in sets of four, or there may be only a single bill.67 The bill retained by the carrier ("the ship's bill," as it is called when goods are shipped on a vessel), is designed only for its own. information and convenience, not for evidence as between the parties of what their agreement was. And if it differs from the others, they must be considered as the true and only evidence of the contract." 68

order, or

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§ 1736. In whose favor drawn.— It is usual for the name of the consignee of the goods to whom, or to his assign, they are to be delivered, to be mentioned. But the bill is sometimes made out for delivery to the consignor or his assigns; and sometimes "to assigns," which form imports an engagement to deliver to the person whom the consignor shall nominate, and his assigns. Or it may be made out to bearer.70 If negotiable words be contained in the bill of lading, they only indicate the intention of the shipper as to the person for whose use the consignment is made; and the bill is transferred by delivery whether negotiable words be inserted or not." The consignee's title is complete if the bill contain his name, and is sent to him; and the goods are his, subject only to the consignor's right

64. Goetz v. Bank of Kansas City, 119 U. S. 556.

65. Mackenzie on Bills of Lading, 3.

66. Lickbarrow v. Mason, 2 T. R. 63.

67. Dows v. Perrin, 16 N. Y. 325.

68. The Thames, 14 Wall. 98. See Kellerman & Son v. Kansas City, etc., R. Co., 68 Mo. App. 255; Costello v. Laths, 44 Fed. 105.

69. Smith's Mercantile Law, 377.

70. Allen v. Williams, 12 Pick. 297.

71. Emery v. Irving Nat. Bank, 25 Ohio St. 360.

to stop them in transitu for breach of the conditions of sale. If the consignor be himself consignee also, and sends the bill of lading to a third party, indorsed to him in full or in blank, the effect is the same as if such party were named in the bill as consignee.TM If the consignee advance money on the faith of the bill of lading he becomes the owner of the bill to the extent of reimbursing himself, and as to the residue in trust for the former owner.73

§ 1737. Several bills of lading. Where there are several bills of lading, each is a contract in itself as to the holder, but there is but one contract as to the masters and owners. Therefore, if the several numbers of the set of bills of lading be indorsed to different persons, and there be competition for the goods, the rule is, that if the equities be equal, the property passes by the bill first indorsed. For the principle is settled, that if the same goods are sold to two different persons by conveyances equally valid, he who first lawfully acquires possession has priority." And if a party makes advances on faith of a shipment, one who afterward with notice of the fact, though before the first bill of lading is delivered, receives a second bill of lading for the goods, is not entitled to its benefit.76

§ 1738. Contents of bills of lading. The bill of lading should contain the quantity and marks of the merchandise; the names of the shipper, of the consignee, and of the master of the ship; the places of departure and discharge; and the price of the freight. Sometimes it states also the condition of the goods. And from early times it has been the custom to express as a limitation of the contract to carry and deliver the goods, "the dangers of the sea excepted." In later times, the exception has been usually extended to the acts of God, public enemies, fire, and all other dangers and accidents of the seas, rivers, and navigation." Other clauses are

72. Walley v. Montgomery, 3 East, 585.

73. Haille v. Smith, 1 Bos. & P. 563; Armour v. Michigan Cent. R. Co., 65 N. Y. 120.

74. Caldwell v. Ball, 1 T. R. 205; Meyerstein v. Barber, L. R., 2 C. P. 6€1, 36 L. J. C. P. 361, 3 Kent Comm. 284; First Nat. Bank v. Ege, 109 N. Y. 120. 75. Lamb v. Durant, 12 Mass. 54, 1 Smith Lead. Cas. 891.

76. Stevens v. Boston, etc., R. Co., 8 Gray, 262.

See Stanard Milling Co. v. White Contra, Myers v. Diamond Joe Line,

77. 3 Kent Comm. 282, Lect. XEVII. Line, etc., Co., 122 Mo. 258, 26 S. W. 704. 58 Mo. App. 199; The Carlton Steamship Co. v. Castle, etc., Co., L. R., App. Cas. 486 (1898).

sometimes inserted in the bill of lading, according to the. nature of the contract between the parties to it, to provide, for instance, for the payment of demurrage (by which is meant the allowance or payment for detention of the ship) by the consignee, the effect of which is to bind the consignee to pay it if he receive the goods

for the acceptance of goods by the consignee, in pursuance of a bill of lading whereby the shipper makes payment of freight or demurrage a condition precedent to delivery, is evidence of an undertaking by the consignee to pay such demand.78 Where the bill contains the words, "demurrage $10 a day after four days," its meaning is, that the vessel is entitled to demurrage after four days from her arrival at the specified place, and her master notifies. the consignee of arrival. This cannot be varied by proof of usage that such a clause means four days after the vessel obtains a berth, though such evidence may be proper where the master has liberty to choose a landing place.79 Where the bill contains no provision for the payment of demurrage, the consignee, or his assignee, is not liable therefor, even if he receives the cargo, much less where he assigns the bill before delivery of the cargo.

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1739. How far shipper and carrier bound by terms of the bill of lading. A clause in a bill of lading providing that the goods, immediately upon delivery by the carrier, shall be at the risk of the shipper, constitutes a valid special contract. But it must be reasonably construed, and no obligation otherwise resting on the carrier is thereby removed, except such as is expressed or reasonably implied. He must notify the consignee of the arrival of the goods, proffer a delivery at a reasonable and proper time, and afford the consignee's agents an opportunity to identify and receive them. These things done, his liability ceases, unless his

78. Scaife v. Tobin, 3 B. & Ad. 523; Pioneer Fuel Co. v. McBrier, 28 C. C. A. 466, 84 Fed. 495. See Good & Co. v. Isaacs, 2 Q. B. 555 (1892).

79. Philadelphia, etc., R. Co. v. Northam, 2 Ben. 1. See Burrill v. Crossman, 16 C. C. A. 381, 69 Fed. 747.

80. Gage v. Morse, 12 Allen, 410. See case of Van Etten v. Newton, 134 N. Y. 143, 31 N. E. 334, 30 Am. St. Rep. 630, note. Held, that in the absence of a stipulation in a bill of lading for the payment of demurrage by the consignee. in case of detention of the vessel by the consignor for loading for an unreasonable length of time, damages in the nature of demurrage may be recovered from the latter. If the bill of lading provides for payment of demurrage, consignee is not liable therefor. Where he is the owner of the cargo and the vessel is through his fault detained an unreasonable length of time at the port of discharge, he is liable for damages in the nature of demurrage. See Dayton v. Parke, 142 N. Y. 391, 37 N. E. 642.