
    Eytinge & Company, Inc., Plaintiff, v. The Atlantic Transport Company, Defendant.
    First Department,
    February 13, 1914.
    Bailment — consignment of goods for transportation to and distribution in foreign country — right of bailee to assert title of foreign consignees — indemnity against result of action—failure to show damage.
    A bailee may not, for Ms own benefit, deny the title of his bailor or avail himself of the title of a third person, even though that person may be the true owner. But if he has delivered the goods to the true owner, or to the person legally entitled to possession, he may defend an action by his bailor by proving the jus tertium. And the bailee is under the burden of proving the title of the person to whom he has delivered.
    The plaintiff, engaged in forwarding to England goods which were received by it from various consignors and ordered to be delivered to consignees specified by them, delivered the goods to the defendant, a steamship company, with a bill of lading stating that they were to be delivered to a forwarding company in England to be by it delivered to the ultimate consignees named in the bill of lading. Although no sum was due to the plaintiff from the foreign company, it drew a draft on said company and forwarded the same by mail; but the foreign company had already distributed the goods shipped by the plaintiff to the various consignees in accordance with the way bills.
    In an action by the plaintiff against the defendant steamship company, to hold the latter liable as bailee upon the ground that it should have held the goods subject to the plaintiff’s order and claiming damages for the amount of the draft, held, that the defendant was entitled to prove that the goods were delivered to the persons to whom the original consignors directed that they should be delivered, and that the consignee’s right to receive them could not be questioned by the plaintiff.
    It is immaterial that the defendant steamship company is indemnified against the outcome of the action by the foreign company which distributed the goods.
    Moreover, the plaintiff failed to show damage where it had no claim against the goods, and no right to make their delivery dependent upon the payment of the draft, which had no relation to the shipment.
    Motion by the defendant, The Atlantic Transport Company, for a new trial upon a case containing exceptions, ordered to be heard at the Appellate Division in the first instance, upon the verdict of a jury in favor of the plaintiff rendered by direction of the court after a trial at the New York Trial Term in October, 1913
    
      
      Carleton Sprague Cooke, for the plaintiff.
    
      Albert P. Massey, for the defendant.
   Scott, J.:

The plaintiff sues for damages for the breach by defendant of its contract of baihnent evidenced by two bills of lading issued by said defendant. The exceptions are to the exclusion of evidence offered by defendant, and in stating the facts upon which the question of defendant’s liability turns, it will be assumed that the evidence offered and excluded would have established the facts to prove which it was so offered.

Plaintiff is a corporation doing business in the city of New York engaged in the business of forwarding goods to England for delivery there to consignees designated by the consignors of the goods. So far as regards the transaction out of which this action arose plaintiff thus shipped no goods of its own but only goods intrusted to it by others for shipment and delivery. The Universal Shipping and Forwarding Company, Limited (hereafter for brevity called the Universal Company), was a corporation apparently doing a similar business in, London. For some time prior to December 19, 1911, plaintiff and the Universal Company had had a working agreement as-to shipments' to and fro. On said December 19, 1911, the Universal Company notified plaintiff of its intention to cancel the contract and appoint another American agent, agreeing, however, that goods in transit should fall under the existing contract; and offering to act for plaintiff, if desired, until further arrangements could be made. Up to this time plaintiff had shipped frequently by defendant’s stes mers, invariably taking bills of lading in favor of the Universal Company. These it sent to the Universal Company, and also sent what were termed way bills showing the marks on the several packages shipped, the value of each, the name of the person from whom each had been received for shipment, and the name of the ultimate consignee to whom each package was to be clelivered. It was the duty of the Universal Company to receive the goods from the steamer, and to deliver the several packages to the consignees named in the way bills. On December 22, 1911, plaintiff delivered to defendant 194 packages for shipment to London, taking two bills of lading to its own order, this being the first time that it had taken bills of lading in this form. On December 26, 1911, plaintiff drew its draft upon the Universal Company in favor of the Produce Exchange Bank for £41314s. 8d., attached to the draft the two bills of lading above mentioned, and delivered both draft and bills of lading to said Produce Exchange Bank. So far as it appears from the evidence the sum for which this draft was drawn was a purely arbitrary one. It does not appear that the Universal Company owed plaintiff any sum whatever and it was conceded upon the trial that the draft did not represent anything that was due to plaintiff from any one on account of the goods shipped. For some'reason, possibly on account of delay in negotiating' the draft, the steamer containing the goods arrived at the port of London before the bills of lading. The Universal Company, whjch so far as appears had no knowledge of the form in which the bills of lading had been issued, arranged with the defendant for the delivery of the shipments to it, against a banker’s indemnity and without the production of the bills of lading. The Universal Company having thus received the goods, proceeded to distribute and deliver them to the several consignees in accordance with the way bills which had apparently been forwarded independently of the draft. When the draft was presented to the Universal Company payment was refused and the draft and the bills of lading attached to it were returned to plaintiff. The plaintiff now seeks to recover from defendant by reason of its breach of its contract of bailment, such breach consisting of the delivery of the consigned goods to the Universal Company instead of holding them subject to plaintiff’s order, damages in the sum for which the draft above mentioned was drawn. As between plaintiff and defendant the former occupied the position of bailor and the latter that of bailee, and plaintiff rests its right to recover upon the broad rule that a bailee may not dispute the title of his bailor or justify his breach of the contract of bailment by showing that he had delivered the subject of the bailment to another, even to one whom he honestly and in good faith believed to be the true owner. This general rule, however, is subject to many qualifications. It would be a more accurate statement of the rule to say that the bailee may not, for Ms own benefit, deny the title of his bailor, or avail himself of the title of a third person, even though that person may be the true owner. But it is well settled, in this State at least, that he who has delivered goods to the true owner, or the person legally entitled to the possession thereof, may defend against an action by his bailor by proving the jus tertium. . In such a case, however, the burden of proof rests upon the bailee to prove the title of the person to whom he has made delivery. (Mullins v. Chickering, 110 N. Y. 513; Western Transportation Co. v. Barber, 56 id. 544; Valentine v. L. I. R. R. Co., 102 App. Div. 420.)

In the case at bar the plaintiff was itself a bailee, as between it and those who had confided the property to it for transmission abroad. It had no other title to or interest in the goods except as bailee, for it is conceded that it had no lien upon any part of the goods for advances or charges. To each shipper it had issued what it denominated a “through bill of lading” by which it undertook that the goods should be “delivered to the good Steamship Minnewaska or other steamer bound for London * * * to be delivered * * * at the Port of London unto Universal Shipping and Forwarding Co., Ltd.-, and to be by them forwarded thence * * * to Consignees’ Warehouse, thence to be delivered unto ” the ultimate consignee named in the bill of lading. The defendant offered to prove, but was not permitted to do so, that each of the 194 packages covered by the two bills of lading sued upon was in fact received by the Universal Company, and by it delivered to the ultimate consignee named in the through bill of lading ' issued,for such package, being the same person named in the way bill heretofore referred to as the person to whom such package was to be delivered. The exceptions to the exclusion of this testimony raise the question of law presented by this appeal. When the plaintiff attached the bills of lading to its draft upon the Universal Company for a sum of money for which it had no claim against the goods represented by the bills, and thereby subjected the goods to a lien for the amount of the draft, it came perilously near committing the crime of larceny. (Penal Law, § 1290; Matter of McFarland, 59 Hun, 304.) At all events it wrongfully violated its contract with those who had intrusted the property to its care. What happened was, if the evidence offered would prove what was claimed for it, that the goods were delivered, despite plaintiff’s efforts to divert them, to the very persons and through the veiy channels that plaintiff had agreed that they should be delivered. The plaintiff certainly suffered no damage in a legal sense in consequence of such delivery. It was not necessary that defendant should prove in every case that the persons to whom the goods were ultimately delivered were the actual owners thereof. It is sufficient that they were delivered to the person to whom the original consignees directed that they should be delivered, and to whom plaintiff undertook that they should be delivered. It does not lie in plaintiff’s mouth to question the right of the ultimate consignees to receive them.

Much stress is laid in the respondent’s brief upon the fact that the defendant is protected by an indemnity furnished by the Universal Company. That fact is wholly immaterial. The burden rests upon defendant to show that the goods ultimately reached those who were entitled to receive them. The fact that it is indemnified against the outcome of this action does not lessen or increase that burden in any way or affect the question of its liability.

The record of a judgment in the High Court of Justice seems to have been properly excluded, as no proof of the essential jurisdictional facts was offered.

Finally the plaintiff showed no damage. It is conceded that it had no claim against the goods, and it had, therefore, no right to make their delivery dependent upon the payment of a draft for some claim having no relation to the shipment.

The exceptions must, therefore, be sustained, the verdict set aside and a new trial granted, with costs to the defendant to abide the event.

Ingraham, P. J., Laughlin, Clarke and Hotchkiss, JJ., concurred.

Exceptions sustained, verdict set aside and motion for new trial granted, with costs to defendant to abide event. Order to be settled on notice.  