151 U.S. 368 (1894), 807, Merchants' Cotton Press Company and Storage

Docket Nº:No. 807
Citation:151 U.S. 368, 14 S.Ct. 367, 38 L.Ed. 195
Party Name:Merchants' Cotton Press Company and Storage
Case Date:January 22, 1894
Court:United States Supreme Court
 
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151 U.S. 368 (1894)

14 S.Ct. 367, 38 L.Ed. 195

Merchants' Cotton Press Company and Storage

No. 807

United States Supreme Court

January 22, 1894

Company v. Insurance Company of North America

Submitted January 8, 1894

ERROR TO THE SUPREME COURT

OF THE STATE OF TENNESSEE

Syllabus

A railroad company agreed with a cotton compress company that the latter should receive and compress all the cotton which the railroad might have to transport in compressed condition, and that it should insure the same for the benefit of the railroad company, or of the owners of the cotton, for a certain compensation which the railroad company agreed to pay weekly. It was further agreed that the compress company, on receiving the cotton, was to give receipts therefor, and that the railroad company, on receiving such a receipt, was to issue a bill of lading in exchange for it. Cotton of the value of $700,000, thus deposited with the compress company for compress and transportation, was destroyed by fire. That company had taken out policies of insurance upon it, but to a less amount, in all of which the compress company was named as the assured, but in the body of each policy it was stated that it was issued for the benefit of the railroad company or of the owners. The various owners of the cotton further insured their respective interests in other insurance companies,

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called in the litigation the marine insurance companies. After the fire, the amounts of the several losses were paid to the assured by the several marine companies. In an action in the courts of Tennessee to settle the rights of the parties, the Supreme Court of that state held (89 Tenn. 1; 90 Tenn. 306) that the companies so paying were entitled to be subrogated to the rights of the owners or consignees against the railroad company under its bills of lading, and that the railroad company was entitled to have the insurance which had been taken out by the compress company collected for its benefit. The railroad company not being party to those suits, the marine insurance companies filed their bill in equity in a state court in Tennessee against the compress company, the several persons who had insured the destroyed cotton for it, and the railroad company, to reach and subject the fire insurance taken out by the compress company for the benefit of the railroad company, and for other relief set forth in the bill. The plaintiffs in the suit were a corporation under the laws of Pennsylvania, a corporation under the laws of New York, and a corporation under the laws of Rhode Island, on behalf of themselves and of all other companies standing in like position. On the other side were two corporations under the laws of Pennsylvania, two corporations under the laws of Great Britain, a corporation under the laws of New York, certain residents of Rhode Island, certain citizens of New York, certain citizens of Tennessee, two aliens, and forty-four insurance companies of West Virginia, Pennsylvania, New York, Illinois, Louisiana, Wisconsin, Alabama, Connecticut, Ohio, Texas, Indiana, and Great Britain. The defendants petitioned for the removal of the cause to the circuit court of the United States on the ground that the controversy was wholly between citizens of different states or between citizens of one or more of the several states and foreign citizens and subjects, and that the same could be fully determined as between them. The petition was denied and the cause proceeded to judgment in the state court. In the course of the trial, it was attempted to be proved that special rates, rebates or drawbacks had been given in violation of the interstate commerce laws and regulations. A decree being entered for the plaintiffs giving relief substantially as prayed for in the bill, the supreme court of the state, on appeal, affirmed the judgment below and held that the law making agreements for rebates, etc., void, did not invalidate the contracts of affreightment. A writ of error being sued out to this Court, it is now

Held:

(1) That whether the cause be looked at as a whole or whether it be considered under any adjustment or arrangement of the parties on opposite sides of the matter in dispute, there was no right of removal, on the part of the several plaintiffs in error, or either of them.

(2) That there is nothing in the interstate commerce law which vitiates bills of lading, or which, by reason of an allowance of rebates, if actually made, would invalidate a contract of affreightment or exempt a railroad company from liability on its bills of lading.

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The case is stated at length in the opinion of the Court. For the purpose of understanding the brief of counsel, the condensed statement in the headnote is sufficient. There was also a motion to dismiss or affirm.

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JACKSON, J., lead opinion

MR. JUSTICE JACKSON delivered the opinion of the Court.

The writ of error in each of these seven causes, which were submitted together, presents the same federal questions, which are, first, whether the Supreme Court of Tennessee erred in sustaining the action of the Chancery Court of Shelby County of that state denying the petition of several of the plaintiffs in error to remove the cause to the Circuit Court of the United States for the Western District of Tennessee, and secondly in holding that certain alleged special rates, rebates, or drawbacks, allowed by Anthony J. Thomas and Charles E. Tracy, receivers of the Cairo, Vincennes & Chicago Railroad Company, through L. L. Fellows, their agent at Memphis, to Jones Bros. & Co., of that place, on cotton shipped over that line to various points in the east, were not in violation of the Interstate Commerce Acts regulating commerce between states of the Union, and did not render the bills of lading issued by the railroad for cotton transported or to be transported so illegal as to invalidate the same, and prevent any recovery thereon against the carrier.

The questions thus presented grew out of the following state of facts: on November 17, 1887, about 14,000 bales of cotton in the West Navy-Yard compress of the Merchants' Cotton-Press & Storage Company (hereafter called the "compress company") were destroyed by fire. The value of the cotton was about the sum of $700,000. Of the total number of bales thus destroyed, about 9,608 bales were covered by bills of lading issued by various transportation companies to the owners or consignees of the cotton. The bills of lading issued by the Cairo, Vincennes & Chicago Railroad Company (hereafter

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called the "railroad company") covered 5,087 bales of the cotton destroyed, valued at $245,733.46.

In May, 1887, a contract had been entered into between the railroad company and its receivers, Anthony J. Thomas and Charles E. Tracy, on the one side, and the compress company on the other, by the terms of which the railroad company and its receivers agreed to give to the compress company all cotton to compress that the railroad company might have to transport out of Memphis in a compressed condition. The compress company, on its part, agreed to properly compress all such cotton, and also to insure the same for the benefit of the railroad company or owners, for a certain compensation to be paid weekly, which was intended to cover both the service for compressing the cotton and the insurance to be taken out thereon, in good and solvent companies, by the compress company. This insurance was to cover any loss while the cotton was under the control of the compress company and until delivered to the railroad company. The contract further provided that the railroad company and its receivers constituted the compress [14 S.Ct. 368] company its agent to receive all cotton intended for transportation over the railroad company's line, and to sign receipts therefor, on the production of which bills of lading would be issued by the railroad company. This contract was to continue in force until August 31, 1896.

Under and in pursuance of this contract, cotton was delivered to the compress company by the owners or their agents for transportation over the line of the railroad company from Memphis to points east, to the extent of 5,087 bales, for which dray tickets or receipts were given by the compress company, and on the production of which the agent of the railroad company issued bills of lading to the several and respective owners or consignees of such cotton.

The railroad company had an all-rail line from Memphis, and also a partly water and partly rail line, the water line extending from Memphis to Cairo, Illinois, at which point the railroad company's rail line commenced, and extended by means of its connection eastward.

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The compress company had a similar arrangement for insuring cotton with other transportation lines, and in pursuance of its undertaking with the carriers it took out insurance on the cotton deposited with it for compression before being transported, aggregating the sum of $301,750, in forth-four different fire insurance companies, corporations of various states of the Union and of foreign kingdoms. The amount of this insurance fell far short of the value of the cotton deposited with it for compression and which was destroyed by the fire. In all of these policies of insurance taken out under and in pursuance of its contract with the carriers, the compress company was named as the assured, but in the body of each of the policies it was set forth and stated that the insurance on the cotton was for the benefit of the railroads, transportation lines, or owners. The insurance was to attach on receipt of the cotton by the compress company, and to terminate when the same was removed for transportation.

The various owners or consignees of the 5,087 bales of cotton covered by the...

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