of the plaintiff in error with the Fleet Corporation in the operation of the ship. The record shows that the plaintiff in error did in fact both actually and ostensibly act as agent, and not as principal. Since it acted within the scope of its apparent authority in entering into a contract of carriage, the contract is that of the principal, the Fleet Corporation. All the rights and obligations which arise under it are those of the Fleet Corporation, and the agent cannot enforce the contract, neither is he bound by it. Sloan Shipyards v. U. S. Fleet Corp., 42 S. Ct. 386, 258 U. S. 549, 66 L. Ed. 762; King v. Lamborn, 186 F. 21, 108 C. C. A. 123; Mather v. Barnes (C. C.) 146 F. 1000.

Nor can liability be imposed upon the agent upon the theory of negligence in his failing to send forth the cotton with reasonable dispatch. Liability has been imposed below for the loss of market, because of failure to transport the goods. Liability may be imposed, where goods are damaged by a carrier, both in contract and in tort; but in the one case it violates the contractual obligation to use due care, and in the second case the obligation not to damage property by negligence. However, it is not a tort for a carrier to fail to forward goods promptly, nor is it for the agent of the carrier. The duty to transport promptly is derived from the contract of carriage. The default, if any, in forwarding the goods, is the failure to perform a contractual obligation; that is, to act as the forwarding agent for the owner under the carrier's obligation to deliver the goods to the next carrier. Hutchinson on Carriers, § 139.

[6] The Fleet Corporation may be liable to the shipper on its contract; the agent may be liable to the carrier for nonperformance of its duty as agent, but, having no privy of contract with the shipper, it is not liable to the shipper for breach of contract. Tuttle v. Gilbert Co., 13 N. E. 465, 145 Mass. 169. If the agent were guilty of nonfeasance in being delinquent in forwarding the cotton, that does not make him liable for misfeasance. The plaintiff in error may be liable to the defendant in error for its own misfeasance and positive wrongs, but it is not liable for its nonfeasance or omissions of duty in the course of its employment. In the latter cases, its liability is solely to its principal.

The reason for this rule is well stated, with citations, in Bryce v. Southern Railway Co. (C. C.) 125 F. 958: "No authority whatever from a superior to an inferior can furnish the latter a just defense for his own

positive wrongs or trespasses, for no man can authorize another to do a positive wrong. But in respect to nonfeasances, or mere neglects in the performance of duty, the responsibility therefor must arise from some express or implied obligation between particular parties standing in privity of law or contract with each other, and no man is bound to answer for any such violations of duty or obligation except to those to whom he has become directly bound or amenable for his conduct." See, also, Kelly v. Chicago & Alt. Ry. Co. (C. C.) 122 F. 286.

The rule stated in 2 Shearman & Redfield on Negligence, § 343, is that "no agent of a private individual or corporation is ever liable to third persons for the failure to perform obligations of his principal and which the principal has employed him to perform but which he has not contracted with them to perform in their favor. In other words, he is not liable to them for his mere nonfeasance. He is consequently not responsible to them for any negligence in the performance of duties devolving on him purely from his agency, since he cannot as agent be subject to any obligations toward third persons other than those of his principal, and these duties are not imposed on him by law, nor has he agreed with anyone excepting his principal that he will perform them. In failing to do so he wrongs no one except his principal, who alone, therefore, can hold him responsible for his negligence."

If a duty rested upon the Mallory Line in its character apart from its agency, and was one that the law imposed upon it, independent of its agency employment, then it might be liable for tort. There must be some act of negligence or misfeasance to support an actionable tort as against the agent. It is more than a mere breach of the contractual

obligation. In the charge, the jury were instructed that the failure to transport the goods promptly would account for the delay in delivering them to the next carrier, and would constitute negligence for which the plaintiff in error might be held responsible. This charge was erroneous. evidence in the record which justified the court in submitting the issue of liability for misfeasance as against the plaintiff in error.

There was no

It appearing that there is no liability or legal responsibility for the delay of the shipment which might be imposed upon the plaintiff in error, the motion for a directed verdict should have prevailed. Judgment reversed.

HAND, Circuit Judge (dissenting). I agree that the complaint is badly drawn, but it seems to me good after verdict, if read with section 213 of the New York Civil Practice Act. The fourth article alleges that the cotton was delivered to the Wichita Railroad, which issued a bill of lading to the plaintiff's agent, and that it was forwarded by the defendant, the Clyde Company, the Fleet Corporation, and the New Haven Railroad to the plaintiff at Natick, R. I. Article 6 alleges that the cotton was delivered by the Wichita Railroad to the "Mallory Steamship Company and/or Clyde Steamship Company as agents" for the Fleet Corporation, and article 8 that one or all of these three, together with the New Haven Railroad, was responsible for the delay. Considering the alternative form of pleading now permissible under section 213, this charged that the Wichita Railroad delivered the cotton to the defendant, a common carrier, as agent for the Fleet Corporation, and that the delay was due to it and the New Haven Railroad. The allegation of agency was not redundant, if the Fleet Corporation was to be held, and, redundant or not, it could do no harm, if in law the agency of the defendant did not absolve it from its duties as a connecting carrier. The defendant has succeeded upon the idea that this circumstance exonerated it, and it is from that conclusion that I dissent.

The facts are that the defendant, whose general business was that of a common carrier, was operating a ship owned by the United States under a contract with the Fleet Corporation. The contract described it as an agent, gave it only commissions, and required it to account for all profits, but also required it to equip, supply, and disburse the vessel, and to keep her seaworthy. Further the defendant was to "manage, operate, and conduct the business" of the vessel, to "perform all the customary duties of a managing and operating owner, and all customary agency duties concerned with loading and discharging." It was to issue "to shippers customary charter parties, freight contracts, and bills of lading," and to collect all freights. We know nothing about the transaction, except that, while operating the vessel under this contract, the defendant received the cotton from the initial carriers, carried it to Boston, and discharged it on a pier, where it lay for an unreasonable period till delivered to the New Haven Railroad. This is the delay complained of.

On those facts it seems to me that the only possible conclusion is that the defendant as

sumed a duty or an obligation to deliver the cotton to the succeeding carrier, the New Haven Railroad, which it did not discharge, and that it is entirely irrelevant whether or not, in so doing, it was in fact acting as an agent for the Fleet Corporation. The liabil ity of a carrier under such circumstances arises either upon a duty imposed by law, or upon a contract implied from acceptance. I do not see that it makes any difference which it is, though it is less artificial to regard it as & duty imposed, as it certainly has now become under the Carmack Amendment (Comp. St. §§ 8604a, 8604aa). Kansas City Southern Ry. v. Carl, 33 S. Ct. 391, 227 U. S. 639, 648, 57 L. Ed. 683. I shall consider the liabilities under either view.

If the liability sounds in contract, we are to suppose that the defendant made a promise to the Wichita Railroad, acting for the plaintiff, to transport the goods with customary dispatch. That is the only theory on which any contract could arise, and it has been several times countenanced, at least obiter. Briggs v. Railroad, 6 Allen (Mass.) 246, 83 Am. Dec. 626; Marq. Houghton & Ont. R. R. v. Kirkwood, 7 N. W. 209, 45 Mich. 51, 40 Am. Rep. 453; Dunham v. Boston & M. R. R. Co., 70 Me. 164, 35 Am. Rep. 314; Sherman v. Hudson River R. R. Co., 64 N. Y. 255, 261. This case depends upon whether the defendant's promise bound only the Fleet Corporation, or both it and the defendant as well. That is a question of intent, to be gathered from the expressions used, in this case to be imputed from the acts and mutual relations of the parties. If the principal is not disclosed at all, the agent is of course bound. Cobb v. Knapp, 71 N. Y. 348, 27 Am. Rep. 51; Bartlett v. Raymond, 30 N. E. 91, 139 Mass. 275. Indeed, he is bound if his principal's identity is not known, even though he be known to be acting as an agent. Horan v. Hughes (D. C.) 129 F. 248, affirmed 129 F. 1005, 64 C. C. A. 581 (C. C. A. 2); De Remer v. Brown, 59 N. E. 129, 165 N. Y. 410.

Hence the question here is whether the defendant was known to be acting on behalf of the Fleet Corporation when it accepted the cotton. The record is entirely barren on that subject, and the statement in the opinion of the court that it "did in fact actually and ostensibly act as agent, and not as principal," must rest entirely upon presumption. I agree that the plaintiff, having the burden, was bound to shown that the implied promise was made by the defendant on its own behalf, but that is the only reasonable inference from the

The action was in contract, and alleged hat in the summer of 1920 the plaintiff delivered to the defendant for collection a draft, payable in dollars, drawn by the plaintiff upon a Cuban firm, and accepted by it, maturing on September 8, 1920, and extended to "on or about" October 9th; that in consideration of its charges the defendant promised to use diligence in presenting the draft and demanding payment from the drawees, and in protesting the same in case of nonpayment; that under the law of Cuba such drafts must be paid in coin, and, if coin is not in existence, then in accordance with local usage; that on October 9th the defendant presented the draft for payment, but neglected to demand payment in coin, to wit, dollars, but instead received the drawee's check and surrendered the draft; that the check was not paid, nor the draft returned, nor was the draft ever protested; that the drawees had become insolvent and the plaintiff was unable to collect. The answer traversed all the allegations of the complaint, except the issuance of the draft and its acceptance, and contained two pleas not necessary to set forth for the disposition of the case.

Upon the trial it appeared that the plaintiff had drawn a draft against a Cuban firm for merchandise sold, which after many refusals the drawees had finally accepted. The plaintiff, through its agent or employee, delivered the draft to the defendant for collection, with instructions to remit to a New York bank. At its due date in August the drawees had reaccepted the draft, and got an extension for 30 days, and upon the second due date, in September, they had again reaccepted it and got a second extension, so that it finally fell due on October 8, 1920. On that day the defendant presented it for payment again, and the drawee refused, but told the defendant's agent to come back the next day, October 9th, which was a Saturday, On that day the defendant again presented the draft and surrendered it for a check in its own favor upon the drawee's account in a Cuban bank. This check the defendant took at once to the bank, but arrived after it had been closed at noon.

On the next day Cuba declared a moratorium, which lasted until February 15, 1921, after which the defendant made several efforts to collect the check from the bank, which was refused for lack of funds. On February 17th the defendant protested the check, of which it notified the plaintiff's New

learned of the protest on April 6th and asked its bank to tell the defendant to deliver the check to its Cuban lawyers, a request repeated direct to the defendant on April 8th. This the defendant did some time before April 26th, and on May 10th the plaintiff wrote to its bank to ask the defendant to sue on the check itself; no indorsement having been made. This the defendant refused to do, though it offered to indorse the check without recourse. On June 13th, over two months after the time it had learned of the defendant's original receipt of the check and surrender of the draft, the plaintiff charged the defendant with default in taking it. The check was never paid, and the makers became bankrupt.

George Gray Zabriskie, of New York City (Leonard P. Moore, of New York City, of counsel), for plaintiff in error.

Lester B. Nelson, of New York City, for defendant in error.

Before HOUGH, HAND, Circuit Judges.

MANTON, and

HAND, Circuit Judge (after stating the facts as above). The defendant's supposed faults are two-the failure to demand money of the drawees, and the surrender of the draft.

[1] As to the first, there is not a particle of proof that the drawees had any money at hand; on the contrary, it is extremely improbable that they did. People do not generally keep over $3,000 in their till, but expect to take up their paper by check. It did not appear that the drawees could have got the money anywhere but by check on their bank, and it does appear that it was too late to do that. The plaintiff had to prove that insistence on currency would have resulted in currency. The record contains nothing of the kind, and every reasonable surmise is to the contrary. It was plainly error to direct a verdict for more than nominal damages on the first fault.

[2] The second fault was in surrendering the draft. Had this been without getting any corresponding obligation, it may be that the defendant would stand charged prima facie with the face of the draft as in trover (Potter v. Mechanics' Bank, 28 N. Y. 641, 86 Am. Dec. 273; Griggs v. Day, 136 N. Y. 152, 32 N. E. 612, 18 L. R. A. 120, 32 Am. St. Rep. 704; McPeters v. Phillips, 46 Ala. 496; Hoyt v. Stuart, 90 Conn. 41, 96 A. 166; Citizens' Bank v. Shaw, 132 Ga. 771, 65 S. E. 81),

though even then it is hard to see how, in the face of the drawees' bankruptcy, it was proper to direct a verdict for the full amount. But the defendant got a check in exchange for the draft, and a check was as good to hold the drawees as their surrendered acceptance. So, if it was a breach to surrender the draft, we can see nothing but nominal damages following upon the second fault, as well as upon

the first.

The complaint does not allege that the defendant was remiss in collecting the check, and strictly the evidence in the record is not relevant. However, the defendant was not remiss. Rodriguez, the defendant's collector, took the check to the drawees' bank as soon as he could and found it closed. Thereafter nothing could be done till February 15th, and two days later the defendant presented the check and protested it. It presented it several times later, always without success. There is no suggestion that the drawees' affairs got worse between February 17th and the time when the plaintiff learned of the check's dishonor, April 6th. Therefore, even if the complaint had alleged it, the proof would have failed to prove any damage through the neglect of the defendant. Indeed, even if it was a fault, strictissimi juris, to take the check at all, on October 9, 1920, it was the best available course in the plaintiff's interest, one which, so far as this record shows, put the plaintiff in a better posture than that in which it originally had been. The action is at best ungenerous, and the damages on any theory nominal.

[4] That was too late. If a principal would challenge his agent's doings, he may not postpone too long; above all, he must not undertake any projects based upon their propriety. While it is often said that as against an agent the proof must be clearer, the rule still obtains that forbids the principal to blow hot and cold. The books have precedents clearly akin to the case at bar. Bray v. Gunn, 53 Ga. 144; Argus v. Ware, 155 Iowa, 583, 136 N. W. 774; Halloway v. Arkansas, etc., Co., 77 Kan. 76, 93 P. 577; Pickett v. Pearsons, 17 Vt. 470; Courcier v. Ritter, 6 Fed. Cas. 644, No. 3,282. In the case at bar ratification was complete.

[5] We decline to direct judgment for the defendant. Slocum v. N. Y. Ins. Co., 228 U. S. 364, 33 S. Ct. 523, 57 L. Ed. 879, Ann. Cas. 1914D, 1029, stands, as we understand it, to the contrary. The Supreme Court must modify the rule; not we. Qur decision in Royal Italian Government v. National Brass & Copper Tube Co. (C. C. A.) 294 F. 23, appears to be to the contrary, but the point was not discussed, and probably not argued. An error in the first trial of a cause as little removes its eventual disposition from a jury, when the court directs the verdict, as when a jury has found it. It is never impossible, at least not in this case, that new evidence may develop on the second trial, which will change the result.

Judgment reversed, and new trial or

dered.

made out its defense of ratification by documentary proof and ought to have secured a directed verdict in its favor. Confessedly it was acting as the plaintiff's agent when it took the check. Assuming that its act was unauthorized, none the less it acted on the plaintiff's behalf; it intended to act as an agent. When the plaintiff learned what it had done, it might by hypothesis have repudiated the transaction in toto and charged the defendant with its dereliction, as it later did. But this it did not do. On the contrary, from April 6, 1921, to June 13, it treated the exchange as proper. Not only did it fail to complain, but it asked for delivery of the check, got it, proposed to sue upon it, later suggested that the defendant should do the same, and offered to guarantee its expenses. It was only after more than two months had passed, and upon the suggestion of its lawyer, that it first raised any question as to the propriety of the defendant's conduct.

THE CUTCHOGUE.

(Circuit Court of Appeals, Second Circuit. March 1, 1926.)

No. 225.

1. Towage 14-Libelant, failing to answer tug owner's letter exempting itself from liability for damages, after having previously refused to accede to such conditions, is deemed to have consented.

Libelant, failing to answer tug owner's letfloating equipment while in tow, after having ter that it would not be liable for damages to previously refused to accede to those conditions, must be deemed to have consented to agreement.

2. Towage 3-Libelant, having knowledge of practice of shifting floats when opportunity presented, is deemed to have consented to its float being shifted, without having given for-⚫ mal order on failure to have its own tug present.

Where libelant knew that practice of handling floats at terminal required that they be moved as soon as opportunity presented, it must be deemed to have understood that shifting float was necessary, and, although not having