Statement of the Case.

"5th. That plaintiffs had previously paid one or more drafts upon similar bills of lading, signed by the said Easton as agent aforesaid, for cotton shipped them by said Joseph Lahnstein, for sale by plaintiffs as commission merchants for account of said Joseph Lahnstein, and that the cotton so previously advanced upon was received by plaintiffs in the due course of transportation, pursuant to the terms of the bills of lading upon which they made advances respectively, and the bill of lading of November 6th, 1883, was the first received by plaintiffs from said Lahnstein and not fulfilled by defendant.

"6th. That, in point of fact, said bill of lading of November 6th, 1883, was executed by said E. D. Easton fraudulently and by collusion with said Lahnstein and without receiving any cotton for transportation, such as is represented in said bill of lading, and without the expectation on the part of the said Easton of receiving any such cotton; that said Easton and said Lahnstein had fraudulently combined in one other case, whereby said Easton signed and delivered to the said Lahnstein a similar bill of lading for three hundred bales of cotton which had not been received, and which the said Easton had no expectation of receiving, the latter-named bill of lading having been given early in November, 1883, but that plaintiffs in this suit had no knowledge whatever of the facts stated in this (sixth) clause until after they had in good faith paid and advanced upon the bill of lading sued on and the draft thereto attached, to them presented as aforesaid, the sum of $8000.00, as herein before stated.

7th. That the cotton mentioned in said bill of lading, (of November 6th, 1883,) had the same been actually received by defendant and forwarded to plaintiffs, would have been worth largely more than the amount so advanced by said plaintiffs as aforesaid that is to say, would have been worth about $10,000.00, and that, except that the cotton was not received nor expected to be received by said agent when said bill of lading was by him executed as aforesaid, the transaction was, from first to last, customary and in the usual course of trade, and in accordance with the usage and customs of merchants and shippers and receivers of cotton.

Statement of the Case.

"8th. That on said November 6th, 1883, and long prior thereto and ever since, the headquarters and main offices of defendant were and have been connected by railroad and telegraph communication with all stations on defendant's railroad and with Sherman station aforesaid, among others.

"9th. That the defendant is a corporation created and existing and domiciled as alleged in the petition.

"10th. That on November 10th, 1883, said Joseph mentioned above was insolvent, and that he has been insolvent ever since and is so now."

Then follows bill of lading, indorsed by Lahnstein and with draft on Friedlander & Co. for $8000 attached, acknowledging the receipt from Joseph Lahnstein of "two hundred bales of cotton in apparent good order, marked and numbered as below, to be transported from Sherman to New Orleans, La., and delivered to the consignees or a connecting common carrier," and proceeding in the usual form, Lahnstein being named as consignee, and directions given, "Notify J. Friedlander & Co., New Orleans, La." The Circuit Court found for the defendant, and judgment was rendered accordingly, and writ of error thereupon brought to this court.

Upon the argument certain parts of the statutes of the State of Texas were cited, with especial reference to the provision as to common carriers, "that the trip or voyage shall be considered as having commenced from the time of the signing of bill of lading." Title 13, Carriers, c. 1, Art. 277; Art. 280; Art. 283, [Act February 4, 1860]; Title 84, Railroads, c. 10, Art. 4258 b, § 8, [Approved, April 10, 1883, General Laws, Texas, 1883, p. 69]. Sayles' Texas Civil Statutes, 1888, Vol. I, pp. 131, 134, 135; Vol. II, p. 450.

Mr. A. G. Safford, for plaintiffs in error, cited: Martin v. Webb, 110 U. S. 7; Carr v. London and Northwestern Railway Co., L. R. 10 C. P. 307; Bank of Batavia v. New York, Lake Erie &c. Railroad, 106 N. Y. 195; Cooper M'f'g Co. v. Ferguson, 113 U. S. 727; Bulger v. Roche, 11 Pick. 36; S. C. 22 Am. Dec. 359; United States v. State Bank, 96 U. S. 30; Pollard v. Vinton, 105 U. S. 7; Grant v. Norway, 10 C. B. 665;

Citations for Defendant in Error.

Armour v. Michigan Central Railroad, 65 N. Y. 111; Relyea v. New Haven Rolling Mill Co., 42 Connecticut, 579; Brooke v. New York, Lake Erie &c. Railroad, 108 Penn. St. 529; Wichita Savings Bank v. Atchison, Topeka &c. Railroad, 20 Kansas, 519; Sioux City & Pacific Railroad v. Fremont Bank, 10 Nebraska, 556; St. Louis &c. Railroad v. Larned, 103 Illinois, 293; Wilkens v. Baltimore & Ohio Railroad, 44 Maryland, 11; Williams v. Wilmington & Weldon Railroad, 93 North Carolina, 42; Merchants' Bank v. State Bank, 10 Wall. 604; Drew v. Kimball, 43 N. H. 282; S. C. 80 Am. Dec. 163; Bank v. Lanier, 11 Wall. 369, 377; Bridgeport Bank v. New York & New Haven Railroad, 30 Connecticut, 231; New York & New Haven Railroad v. Schuyler, 34 N. Y. 30; Hol brook v. New Jersey Zinc Co., 57 N. Y. 616; Sturges v. Bank of Circleville, 11 Ohio St. 153; S. C. 78 Am. Dec. 296; Cocheco National Bank v. Haskell, 51 N. H. 116; Rapp v. Latham, 2 B. & Ald. 795; Hume v. Bolland, 2 Ryan & Moody, 371; Beach v. State Bank, 2 Indiana, 488; Doremus v. McCormick, 7 Gill, 49; Sweet v. Bradley, 24 Barb. 549; Hawkins v. Appleby, 2 Sandf. (N. Y.) 421; Griswold v. Haven, 25 N. Y. 595; S. C. 82 Am. Dec. 380; French v. Rowe, 15 Iowa, 563. Mr. Winslow F. Pierce for defendant in error.

Mr. J. F. Dillon filed a brief for defendant in error, citing: Lickbarrow v. Mason, 2 T. R. 63; Grant v. Norway, 10 C. B. 665; S. C. 15 Jurist, 396; S. C. 2 Eng. L. & Eq. 337; Hubbersty v. Ward, 8 Exch. 330; Brown v. Powell Duffryn Co., L R. 10 C. P. 562; The Freeman v. Buckingham, 18 How. 182; The Loon, 7 Blatchford, 244; Robinson v. Memphis & Charleston Railway, 9 Fed. Rep. 129; S. C. 16 Fed. Rep. 57; Pollard v. Vinton, 105 U. S. 7; Sears v. Wingate, 3 Allen, 103; Baltimore & Ohio Railroad v. Wilkens, 44 Maryland, 11; Hunt v. Mississippi Central Railroad, 29 La. Ann. 446; Louisiana Bank v. Laveille, 52 Missouri, 380; Williams v. Wilmington & Weldon Railroad, 93 North Carolina, 42; Chandler v. Sprague, 5 Met. 306; S. C. 38 Am. Dec. 404, and note, page 407; Cox v. Bruce, 18 Q. B. D. 147; St. Louis, Iron Mountain & Southern Railway Co. v. Knight, 122 U. S. 79; Walker v.

Opinion of the Court.

Brewer, 11 Mass. 99; Miller v. Hannibal & St. Joseph Railroad, 90 N. Y. 430.

MR. CHIEF JUSTICE FULLER delivered the opinion of the court.

The agreed statement of facts sets forth "that, in point of fact, said bill of lading of November 6, 1883, was executed by said E. D. Easton, fraudulently and by collusion with said Lahnstein and without receiving any cotton for transportation, such as is represented in said bill of lading, and without the expectation on the part of the said Easton of receiving any such cotton;" and it is further said that Easton and Lahnstein had fraudulently combined in another case, whereby Easton signed and delivered to Lahnstein a similar bill of lading for cotton "which had not been received, and which the said Easton had no expectation of receiving;" and also "that, except that the cotton was not received nor expected to be received by said agent when said bill of lading was by him executed as aforesaid, the transaction was, from first to last, customary." In view of this language, the words "for transportation, such as is represented in said bill of lading" cannot be held to operate as a limitation. The inference to be drawn from the statement is that no cotton whatever was delivered for transportation to the agent at Sherman station. The question arises, then, whether the agent of a railroad company at one of its stations can bind the company by the execution of a bill of lading for goods not actually placed in his possession, and its delivery to a person fraudulently pretending in collusion with such agent that he had shipped such goods, in favor of a party without notice, with whom, in furtherance of the fraud, the pretended shipper negotiates a draft, with the false bill of lading attached. Bills of exchange and promissory notes are representatives of money, circulating in the commercial world as such, and it is essential, to enable them to perform their peculiar functions, that he who purchases them should not be bound to look beyond the instrument, and that his right to enforce them should not be defeated by any

Opinion of the Court.

thing short of bad faith on his part. But bills of lading answer a different purpose and perform different functions. They are regarded as so much cotton, grain, iron or other articles of merchandise, in that they are symbols of ownership of the goods they cover. And as no sale of goods lost or stolen, though to a bonâ fide purchaser for value, can divest the ownership of the person who lost them or from whom they were stolen, so the sale of the symbol or mere representative of the goods can have no such effect, although it sometimes happens that the true owner, by negligence, has so put it into the power of another to occupy his position ostensibly, as to estop him from asserting his right as against a purchaser, who has been misled to his hurt by reason of such negligence. Shaw v. Railroad Co., 101 U. S. 557, 563; Pollard v. Vinton, 105 U. S. 7, 8; Gurney v. Behrend, 3 El. & Bl. 622, 633, 634. It is true that while not negotiable as commercial paper is, bills of lading are commonly used as security for loans and advances; but it is only as evidence of ownership, special or general, of the property mentioned in them, and of the right to receive such property at the place of delivery.

Such being the character of a bill of lading, can a recovery be had against a common carrier for goods never actually in its possession for transportation, because one of its agents, having authority to sign bills of lading, by collusion with another person issues the document in the absence of any goods at all?

It has been frequently held by this court that the master of a vessel has no authority to sign a bill of lading for goods not actually put on board the vessel, and, if he does so, his act does not bind the owner of the ship even in favor of an innocent purchaser. The Freeman v. Buckingham, 18 How. 182, 191; The Lady Franklin, 8 Wall. 325; Pollard v. Vinton, 105 U. S. 7. And this agrees with the rule laid down by the English courts. Lickbarrow v. Mason, 2 T. R. 77; Grant v. Norway, 10 C. B. 665; Cox v. Bruce, 18 Q. B. D. 147. "The receipt of the goods," said Mr. Justice Miller, in Pollard v. Vinton, supra, "lies at the foundation of the contract to carry and deliver. If no goods are actually received, there can be no