267 U.S. 255
UNION PAC. R. CO.
Argued Jan. 19, 1925.
Decided March 2, 1925.
[267 U.S. 255, 256] Mr. Ray Campbell, of Wichita, Kan., for petitioner.
Mr. Nelson H. Loomis, of Omaha, Neb., for respondent.
Mr. Justice McREYNOLDS delivered the opinion of the Court.
This action was begun in the district court, Shawnee county, Kansas, to recover damages resulting from false recitals of dates contained in substituted order bills of lading for four cars of wheat. These bills were issued by respondent's agent at Denver and stated, contrary to the facts, that they were given in lieu of others issued at points of origin on specified dates prior to November 9, 1920
Petitioner agreed to buy a quantity of wheat from the Ed. Past Grain Company, of Denver, at a stipulated price, shipments to be made before November 9th, and then contracted to resell at a favorable price contingent upon like shipments. He alleged that, relying on the false recitals in the substituted bills, he paid drafts drawn on himself by the Past Company for the purchase price, but was unable to use the wheat, when received, to fulfill his contract for resale because original shipments were too late, and that he was compelled to dispose of it on a declining market at considerable loss. Also:
Answering, respondent denied every allegation of the petition not specifically admitted. It acknowledged purchase of the wheat by petitioner from the Past Company, but alleged that, having failed to cancel the contract because of delay, as permitted, he was bound to accept the wheat on arrival; also, that it had no notice of the contract for resale, and was not liable for any special damages consequent upon failure to comply therewith. It further stated that the substituted bills were prepared by the Past Company and the signature of its Denver agent obtained by fraud; that the agent had no authority to sign bills containing false or erroneous statements; that petitioner could have disposed of the wheat without loss if he had acted promptly and prudently upon receipt of the same; and (paragraph 5):
A general demurrer to the answer and special demurrers to certain paragraphs were interposed and overruled by the court. Judgment went against petitioner. He stood on the demurrer and perfected an appeal to the Supreme Court, which affirmed the challenged judgment. In the latter court his principal contention seems to have been that the federal Bill of Lading Act, approved August 29, 1916 (39 Stat. 538 [Comp. St. 8604aaa- 8604w]), c. 415, makes order bills of lading strictly negotiable, and therefore respondent became liable to him for the damages consequent upon misstatements of dates in the substituted bills. This contention was duly considered and rejected. The court then said:
It seems clear that the Supreme Court of Kansas rested its judgment, affirming the action of the trial court, upon a nonfederal ground broad enough to sustain it. The answer not only relied upon nonnegotiable features of the bills-the federal question-but advanced other defenses good as against the general demurrer. It denied the existence of any trade usage to accept as accurate recitals as to dates in bills of lading, also that the Denver agent had power to issue the substituted bills. It asserted that petitioner was obligated to accept the grain irrespective of the dates of original shipments, and that if due diligence had been exercised no loss would have occurred. These denials and assertions raised questions under the state laws. They were substantial and broad enough to sustain the ruling of the trial court.
The judgment below is affirmed.