Boston Ins. Co. v. Chicago, Rock Island & Pacific Railway Co.

• Decision Date: 30 October 1902
• Citation: 92 N.W. 88,118 Iowa 423
• Parties: BOSTON INSURANCE COMPANY, Appellant, v. THE CHICAGO, ROCK ISLAND & PACIFIC RAILWAY COMPANY, Appellee
• Court: Iowa Supreme Court

92 N.W. 88

118 Iowa 423

BOSTON INSURANCE COMPANY, Appellant, v. THE CHICAGO, ROCK ISLAND & PACIFIC RAILWAY COMPANY, Appellee

Supreme Court of Iowa, Des Moines

October 30, 1902

Appeal from Polk District Court.--HON. C. P. HOLMES, Judge.

ACTION to recover the value of a registered mail package which the defendant, as one of the agencies of the government, for carriage of its mails, undertook to carry from Kansas City Mo., to Kinsley, Kan., and which it is claimed was destroyed by fire in a wreck at Volland, Kan., caused by the negligence of defendant's employes. The Bankers' Mutual Casualty Company paid the loss to the owner of the package; and plaintiff, who had reinsured the loss, repaid the amount thereof to the casualty company, and as assignee of said company, and by reason of a claim of subrogation, seeks to recover the amount paid, from the defendant. The defendant demurred to the petition, and its demurrer was sustained, and judgment was rendered against plaintiff for costs. Plaintiff appeals.

Affirmed.

Dale & Allen for appellant.

Carroll Wright and John I. Dille for appellee.

OPINION

DEEMER, J.

Defendant a corporation organized under the laws of this state for the purpose of operating a railway, was in March of the year 1899 maintaining a line of road in the state of Kansas, and was carrying the United States mail in its passenger trains operated over said road, pursuant to the following notice:

"Post-Office Department. Office of the Second Assistant Postmaster. General Railway Adjustment Division. Washington, D. C., Sept. 30 1898. Sir: The compensation for the transportation of mails," etc., "on route No. 155,075, between St. Joseph, Mo., and Liberal, Kansas, has been fixed from July 1st, 1898, to June 30th, 1902, under acts of March 3, 1873, July 12, 1876, and June 17th, 1878, upon returns showing the amount and character of the service for thirty successive working days, commencing April 5, 1898, at the rate of", etc.; "* * * and pay is also allowed for the use of R. P. O. cars from July 1, 1898, at the rate of," etc. "* * * This adjustment is subject to future orders and to fines and deductions, and is based on a service of not less than six round trips per week. Very respectfully, W. S. Shallenberger, 2d Asst. P. M. General.

"Mr. W. G. Purdy, V. Pres. Chicago, Rock Island and Pacific Railway Co., Chicago, Ills."

On the 16th day of March, 1899, the National Bank of Kansas City, Mo., caused a package containing $ 2000 in currency to be registered by and delivered to the postoffice authorities in Kansas City, Mo., for transmission in the United States mails to the Kinsley Bank, of Kinsley, Kan. This package was delivered in due course to the United States mail car operated by defendant company, and taken in charge by the mail clerks in said car for carriage to its destination. On the 17th day of March, the train, of which this mail car was a part, was wrecked at Volland, in the state of Kansas, through the negligence of defendant's employes in the construction and operation of a switch in its yards at said town, and in running the train of which the mail car was a part at too high a rate of speed. The Kinsley Bank was insured against loss of this character by the Bankers' Mutual Casualty Company, and the plaintiff reinsured the risk assumed by the casualty company. Plaintiff paid the loss to the casualty company, and the casualty company reimbursed the Kinsley Bank for the amount of its loss. The policy of insurance issued by the casualty company contained this stipulation: "In all cases of loss, when it shall be claimed by the Bankers' Mutual Casualty Company that the carrier or other party in whose custody the property may be at the time of such loss is or may be liable, then the assured shall, at the request of this company or its agents, assign and subrogate all their rights and claims to this company, to an amount not exceeding the sum paid by said company." And in the policy issued by the plaintiff, we find this provision: "It is the intent of this insurance to fully indemnify the reassured for any and all losses and damages caused by the perils insured against, but in case of loss it shall be lawful and necessary for the reassured to sue, labor, and travel for, in, and about the defense, safeguard, and recovery of the property hereby assured, without prejudice to this insurance; and upon the payment of any loss under this policy, the assured or their assigns, in consideration thereof, agree to convey to the said Boston Marine Insurance Co. the unincumbered title in the property lost, as absolute owner thereof, and to render all assistance in the recovery, reissue, or replacement of said property, where possible." After plaintiff had paid the loss, it received the following instruments of assignment:

"To all persons coming into possession of a certain package of currency, or any part thereof, shipped by the National Bank of Commerce, of the town of Kansas City, Mo., unto Kinsley Bank, in town of Kinsley, state of Kansas, by registered mail, on March 16, 1899: You will deliver same to the Bankers' Mutual Casualty Co., or their order, on presentation hereof. Kinsley Bank, by F. B. Hine, Cashier.

"Deliver the above package to the Boston Investment Co. Bankers' Mutual Casualty Co., by A. U. Quint, Treasurer."

"State of Kansas, County of Edwards--ss.: Know all men by these presents, that we, Kinsley Bank, hereby assign, transfer, and set over unto the Bankers' Mutual Casualty Co., or their order, all our right, title, and interest in any and all of the money contained in the package shipped by registered mail on the 16th day of March, 1899, by the National Bank of Commerce, of the town of Kansas City, Mo., unto Kinsley Bank, town of Kinsley, state of Kansas, and hereby authorize the Bankers' Mutual Casualty Co., or their assigns, to maintain action in their own name to recover any or all of said money, with the same rights and powers as we ourselves could do it. Kinsley Bank, by F. B. Hine, Cashier."

I. The action is to recover the amount of the loss from the railway company, on the theory that it was under a duty to the Kinsley Bank to safely carry all proper mailable material properly addressed to it, and that plaintiff is either the assignee of the Kinsley Bank, or, having paid the loss, is entitled to be subrogated to the rights of that bank against the railway company. This duty is said to arise both by statute and by contract between the United States government and the defendant company. We must assume, for the purposes of the case, that defendant's employes were negligent both in the operation of the train and in the operation of the switch; but something more is necessary to create liability. Actionable negligence consists not only in some careless or reckless act of commission or omission, but there must also be found a breach of duty, created or imposed by law, owing to the party injured, from him who was guilty of the negligent act. This duty may be general and owing to everybody, or it may be particular and owing to a single individual only, by reason of his peculiar position; and in every instance the complaining party must point out how the duty arose which is charged to have been neglected. Cooley, Torts (2d Ed.) pp. 791-793. The defendant, as a common carrier of freight and passengers, was under a general duty to every one whom it undertook to serve in either capacity. It might also assume particular duties to single individuals by reason of contract relations, and the first question which arises in the case is, was it under any duty, either general or particular, to the Kinsley Bank? And if so, what was the nature of that duty?

Under authority conferred by the constitution to establish postoffices and post roads (Constitution, U.S. article 1, section 8, paragraph 7), the general government has undertaken the business of transmitting, distributing, and delivering all mail matter. It has a monopoly on this business, which it enforces by appropriate penalties. The postoffice department is a branch of the government, and all mail matter is carried by it. With reference to railways, we find the following material provisions in the Revised Statutes of the United States:

"Sec 3999. If the postmaster general is unable to contract for carrying the mail on any railway route at a compensation not exceeding the maximum rates herein provided or for what he may deem a reasonable and fair compensation, he may separate the letter mail from the other mail, and contract, with or without advertising, for carrying such letter mail, by horse express or otherwise, at the greatest speed that can be reasonably obtained, and for carrying the other mail in wagons or otherwise at a slower rate of speed.

"Sec. 4000. Every railway company carrying the mail, shall carry on any train which may run over its road, and without extra charge therefor, all mailable matter directed to be carried thereon, with the person in charge of the same.

"Sec. 4001. All railway companies to which the United States have furnished aid by grant of lands, right of way or otherwise, shall carry the mail at such prices as congress may by law provide; and until such price is fixed by law, the postmaster general may fix the rate of compensation.

"Sec 4002. The postmaster general is authorized and directed to readjust the compensation hereafter to be paid for the transmission of mail on railway routes, upon the conditions and at the rates hereinafter mentioned: First. That all the mails shall be conveyed with due frequency and speed; and that sufficient and suitable room, fixtures, and furniture, in a car or apartment properly lighted and warmed, shall be provided for route agents to accompany and distribute the...