G. A. C. Commercial Corp. v. Wilson
United States District Court for the Southern District of New York
271 F. Supp. 242 (S.D.N.Y. 1967)
St. Lawrence Pulp & Paper Corp. staged fake shipments by sealing empty railroad cars, and its carrier, Norwood & St. Lawrence Railroad Co. (defendant), unaware of the fraud, signed non-negotiable straight bills of lading acknowledging receipt of the (nonexistent) goods. St. Lawrence used copies of these fraudulent bills as proof of collateral value to borrow money from G.A.C. Commercial Corp. (plaintiff) against its accounts receivable; after St. Lawrence went bankrupt, GAC sued Norwood for negligence in issuing the bills without inspecting the shipments, and Norwood moved for summary judgment.
Whether a carrier may be held liable, under the Federal Bills of Lading Act or common law, for issuing a straight bill of lading covering goods that never actually existed.