Legal Memorandum: Carrier's Action against a Warehouseman

Issue: Does a carrier have a cause of action under Florida law against a warehouseman for its unauthorized release of merchandise to the buyer?

The Supreme Court of Alabama recently decided a case directly on point, determining that a carrier has a cause of action against a warehouse for premature release of goods to an insolvent buyer.  S/M Indus., Inc. v. Hapag-Lloyd A.G., 586 So. 2d 876 (Ala. 1991).  The Alabama court decided the case on basic common law contract and bailment grounds, and there is no reason to believe that a Florida court would not follow the logic of the Alabama court.  In fact, an older Florida case, while not as clear as S/M Industries, relies on many of the same principles as S/M Industries.  See Commercial Trading Co. v. Zero Food Storage, Inc., 199 So. 2d 109, 112 (Fla. Dist. Ct. App.), cert. denied, 204 So. 2d 332 (Fla. 1967).

In S/M Industries, foreign shippers contracted with a carrier to ship goods to a buyer in the United States, payment against documents required.  586 So. 2d at 878-79.  Upon arrival, the carrier’s agent in Mobile, Alabama contacted the buyer regarding disposition of the goods.  The buyer advised that it was attempting to arrange for financing to pay for the cargo; in the meantime, the shippers instructed the carrier to arrange for storage in a Mobile warehouse pending payment.  The carrier’s agent located a warehouse in Mobile and arranged for it to receive and store the goods.  The terms of the agreement between the carrier and the warehouse were that the buyer would […]