
    Peter A. Kuerzi, Respondent, v. Carl Maier and Frieda Maier, Doing Business under the Firm Name and Style of Marx Maier, Appellants.
    (Supreme Court, Appellate Term, First Department,
    June, 1916.)
    Carriers — assignment of bill of lading — sales — through rates.
    Plaintiff’s assignor purchased from defendant 1,000 bales of cotton compressed at the shipside New Orleans, terms sight draft attached to the bill of lading.. At .the time of the purchase the cotton was stored in Texas uncompressed and at defendant’s suggestion it was shipped on a through bill of lading direct to a customer of plaintiff’s assignor who was advised by defendants that they had obtained a through rate and would deduct fifty-one cents for one hundred pounds to New Orleans and in fact deducted at the rate of forty-nine cents one hundred pounds. Held, that plaintiff’s assignor was entitled to deduct from the invoice only so much as represented the actual rate charge including compression though it appeared that all the railroads except that by which the cotton was shipped charged sixty-one cents one hundred pounds for a like transportation.
    Appeal by defendants from judgment of the City Court of the city of New York, entered on verdict directed in favor of plaintiff.
    Frederic H. Cowden, for appellants.
    Francis J. Kuerzi, for respondent.
   Guy, J.

Plaintiff’s assignor, N. P. Sloan Company, on or about July 3, 1915, purchased from the defendants 1,000 bales of clean Texas millrun linters at four and three-eighth cents a pound, compressed shipside New Orleans, La.; terms, sight draft attached to bill of lading.

From subsequent correspondence it appears that at the time of the purchase the linters were stored at Fort Worth, Tex., uncompressed; that defendants suggested it would be , just as well to ship the goods from Fort Worth on a through bill of lading direct to the customer of the plaintiff’s assignor at Phillipsdale, E. I., the defendants when rendering invoice deducting for the freight from Fort Worth to New Orleans; that plaintiff’s assignor instructed defendants to ship the goods to Phillips-dale by the cheapest route possible, stating in their letter to defendants dated July ninth: “You can then bill the linters up sending them forward freight collect, deducting freight to New Orleans, ship side compressed, from your invoice;” and in their reply of July tenth defendants said: “ Please note I have arranged the cheapest possible freight rate with the Southern Pacific line, namely 85^ per 100 lbs., same representing through rate from Port Worth to Phillipsdale, R. I. via New Orleans and New York. * * * The lot will be moved over the Southern Pacific line from Port Worth to New Orleans, and from there by the Southern Pacific boat to New York and then via Providence line to Phillipsdale, R. I. I shall bill the goods in accordance with your request, deducting freight from Port Worth to New Orleans, namely 51 f, per 100 lbs. I have given instructions to consign the goods to 1 order ’ Phillipsdale, notifying you at Philadelphia.”

Before the delivery of the goods the invoice, bill of lading and sight draft were received by plaintiff’s assignor, the Sloan Company; and there was deducted from the invoice freight at the rate of forty-nine cents per 100 pounds from Port Worth, Tex.-, to ship side New Orleans, amounting to $2,631.88. The Sloan Company honored the draft but disputed the correctness of the credit, claiming that instead of deducting $2,631.88 there should have been deducted $3,243.33, the last figure being ' arrived at by calculating the freight from Port Worth to New Orleans at sixty-one cents per 100 pounds instead of forty-nine cents as allowed by the defendants; and the action was to recover the difference of $611.45 with interest.

It appears from the evidence that all the railroads but one charge sixty-one cents per 100 pounds on linters from Port Worth to New Orleans; that this rate included'compression by the railroads; that the road which made the lower rate, said to be forty-nine and one-half cents, was the Texas Pacific; and defendants claim that the goods were sent over that line to New Orleans. Defendants’ counsel tried to show what the respective freight rates were throughout the trip from Fort Worth to Phillipsdale and the portion of the eighty-five cent through rate that was paid to the respective carriers on the route; but the court sustained the objections of plaintiff’s counsel to the questions, holding as matter of law from the correspondence that the defendants should have deducted sixty-one cents per 200 pounds from the invoice, and directed a verdict for the amount claimed in favor of plaintiff. Under the agreement of the parties the defendants were required to pay, in addition to the cost of compression, the actual expense of transporting the goods from Fort Worth to shipside New Orleans. Accordingly plaintiff’s assignor was entitled to deduct from the invoice so much of the bill as represented the actual freight charge including compression; and the fact that the tariff rates (with the exception of the one applicable to the Texas Pacific road) would have called for a larger deduction did not' authorize a credit of such tariff rate to the purchaser. If this construction be correct it was error to exclude proof of the actual cost of carriage, including compression, from Fort Worth to New Orleans.

If plaintiff does not contest the correctness of that claim, and the parties will so stipulate, judgment may be entered for the plaintiff for the difference between that rate and the forty-nine and one-half cents which defendants mistakenly deducted, with’appropriate costs in the court below, and, as so modified, the judgment may be affirmed, without costs of this appeal. Otherwise it must be reversed and a new trial granted, with costs to appellant to abide the event.

Philbiu, J„, concurs.

Bijur, J. (concurring).

Under the original contract between the parties plaintiff’s assignor, the Sloan Company, was to pay a fixed price for the cotton delivered, compressed, at the shipside New Orleans. As the cotton was stored uncompressed at Fort Worth, Tex., it followed necessarily that defendants were to pay the cost of compression and shipment, to New Orleans. ' From the nature of the agreement also, it is evident that it was of no interest to the Sloan Company how large or how small might be. the freight rate to New Orleans which defendants were bound to pay. Plaintiff’s interest under the contract lay solely in having the cotton delivered compressed at the ship-side New Orleans. This then was the situation when the agreement was modified by the letter of defendants to the Sloan Company from which I extract the following: “As I understand you wish the goods shipped to New York and the through rate, according to information received here from Southern Pacific B. R., will be 71$. Therefore, it will be cheaper for you if the goods are shipped on a through bill of lading to New York, than from Fort Worth to New Orleans and then from New Orleans to New York. It would be just as well to ship the goods from Fort Worth on a through bill of lading direct to your customer, and when rendering your invoice I will deduct for the freight from Fort Worth, Texas, to New Orleans, La.”

In response thereto the Sloan Company wrote and wired defendants to ship the cotton to Phillipsdale, R. I. (rather than New York), by cheapest route. The through rate by this route was eighty-five cents, and defendants contend that they were bound to pay only the pro rata portion of that rate, which was apportioned to the carriers for compression and transportation from Fort Worth to New Orleans. When testimony as to the amount so apportioned was tendered by the defendants, the learned judge below excluded it on the ground that it cannot have any possible bearing on the question of what you (defendants) are required to deduct under the agreement by which you agree to credit the plaintiff’s assignor with the rate from Fort Worth to New Orleans, ship side.”

As the contract stood originally, the Sloan Company was entitled to demand that the cotton be delivered compressed at the shipside New Orleans. The instruction to defendants to ship the cotton through to Phillipsdale, B. I., manifestly disposed of the requirement that it be delivered at New Orleans as completely as if the plaintiff had directed defendants not to move it at all from Fort Worth, or to ship it to St. Louis or some other point, to which transportation to New Orleans was not involved at all. In other words, the term of the contract requiring delivery at New Orleans and payment by the defendants for compression and carriage to that point as a terminus was abandoned by mutual consent. It would, of course, have béen simpler and better had the parties made an agreement expressly determining their several rights and obligations under the modified agreement, but, in the absence of express provision, we are bound to give the contract a reasonable interpretation and imply those terms which, in the light of all the circumstances, it can be reasonably inferred that the parties intended to impose. The arrangement for the through shipment to Bhode Island was manifestly in the interest of economy and for the benefit of both parties. The Sloan Company had no desire to have the cotton stopped and stored in New Orleans with the necessity on its part of thereafter paying the local rate- from that point to Phillipsdale, B. I., and the defendants, of course, had no interest in the shipment at all except to reduce so far as possible the expenses of compression and transportation to the point at which they had agreed to deliver it.

I think, therefore, that the modification expressed hy the parties carried with it the implication that each should pay its appropriate pro rata of the through rate as apportioned between the carriers. Defendants claim that this pro rata for compression and carriage from Fort Worth to New Orleans was fifty-one cents, and the testimony offered by them on that point should have been admitted.

Judgment modified, and, as so modified, affirmed, without costs of this appeal.  