California Ins Co v. Union Compress Co

• Decision Date: 03 March 1890
• Citation: 10 S.Ct. 365,33 L.Ed. 730,133 U.S. 387
• Parties: CALIFORNIA INS. CO. v. UNION COMPRESS CO
• Court: U.S. Supreme Court

133 U.S. 387

10 S.Ct. 365

33 L.Ed. 730

CALIFORNIA INS. CO. v. UNION COMPRESS CO.

March 3, 1890.

This is an action at law, brought in the circuit court of the United States for the eastern district of Arkansas, by the Union Compress Company, an Arkansas corporation, against the California Insurance Company, of San Francisco, a California corporation, to recover on a policy of insurance against fire, issued by the latter company to the former company on he 2d of November, 1887. By the policy the California Company insures the Compress Company, for the term of 30 days from November 2, 1887, at noon, to December 2, 1887, at noon, against all direct loss or damage by fire, except as hereinafter provided, to an amount not exceeding ten thousand dollars, to the following-described property, while located and contained as described herein, and not elsewhere, to-wit 'Form of cotton policy. $10,000 on cotton in bales, their own, or held by them in trust or on commission, while contained in the frame shed, 112 to 122, inclusive, & in b'ck shed & yard, 115 to 123, inclusive, North Main street, & on platforms adjoining & in street immediately between the sheds, Sanborn's map of Little Rock, Ark's & it is agreed and understood to be a condition of this insurance that this policy shall not apply to or cover any cotton which may at the time of loss be covered in whole or part by a marine policy; & it is further agreed to be a condition of this policy that only actual payment by bank-check or otherwise for cotton purchased shall constitute a delivery of cotton from the seller to the buyer; and it is further agreed that this company shall be liable for only such proportion of the whole loss as the sum hereby insured bears to the cash value of the whole property hereby insured at the time of fire; and it is further agreed that tickets, checks, or receipts delivered to bearer shall not be considered as evidence of ownership. Other insurance permitted without notice until required. * * * In case of loss or damage to the property insured, it shall be optional with the company, in lieu of paying such loss or damage, to replace the articles lost or damaged with others of the same kind and quality. * * * This entire policy, unless otherwise provided by agreement indorsed hereon, or added hereto, shall be void * * * if any change * * * take place in the * * * possession of the subject of insurance. * * * In case of any other insurance upon the property hereby insured, whether to the same party, or upon the same interests therein, or otherwise, whether valid or not, and whether prior or subsequent to the date of this policy, the insured shall be entitled to recover from this company no greater proportion of the loss sustained than the sum hereby insured bears to the whole amount insured thereon, whether such other insurance be by specific or by general or floating policies, or by policies covering only in excess of specified loss; and is it hereby declared and agreed that in case of the assured holding any other policy in this or any other company on the property insured, or any part thereof, subject to the conditions of average, this policy shall be subject to average in like manner. * * * If this company shall claim that the fire was caused by the act or neglect of any person or corporation, private or municipal, this company shall, on payment of the loss, be subrogated to the extent of such payment to all right of recovery by the insured for the loss resulting therefrom, and such right shall be assigned to this company by the insured on receiving such payment. * * * In case of loss on property held in trust or on commission, or if the interest of the assured be other than the entire and sole ownership, the names of the respective owners, shall be set forth, [in the proofs of loss], together with their respective interests therein."

The complaint alleges that on the 14th of November, 1887, the plaintiff was engaged in the business of compressing cotton, which it received or held on its own account, or on commission, or in trust for others, at its warehouses and compress buildings, and adjoining sheds and platforms, situated at the foot of Main street, in the city of Little Rock, Ark.; that it had on hand at that date about 2,800 bales of cotton, delivered to it to be compressed, and belonging to divers parties, the value of which equalled the sum total of the insurance thereon; and that such cotton, whether owned by the plaintiff, or held by it on commission, or in trust for others, was insured against loss or damage by fire in 28 insurance companies, which are named, in the several amounts stated opposite their respective names, amounting in the aggregate to $142,500, which included the defendant for the sum of $10,000. It then sets forth the issuing of the policy by the defendant to the plaintiff, a copy of which is annexed to the complaint, an that on the 14th of November, 1887, all the cotton in bales, contained on said premises, and so insured, was destroyed by fire, 'together with a large quantity of other cotton in possession of plaintiff at said place, which was not insured by plaintiff.'

The complaint then proceeds as follows: '[That at the time that said cotton came to the possession of the plaintiff it was engaged in the business of compressing cotton at its compress in the town of Argenta, opposite Little Rock, and on the north side of the Arkansas river, and that said cotton was deposited with the plaintiff for compression by various owners thereof, who delivered the same at the sheds and yards and adjacent grounds in the said city of Little Rock, as described in said policy, with directions that the same should be transported to said compress by the plaintiff, or some carrier employed for that purpose by it, and that on the receipt of any bales of said cotton by said plaintiff it gave a receipt for the same to the owner thereof, and that, according to a custom known to said depositors, to the plaintiff, and to the St. Louis, Iron Mountain & Southern Railway Co. and the Missouri Pacific Railway Co., of which it was a part, and the Little Rock & Memphis Railroad Company, which were common carriers, having and operating railroads of which both Argenta and Little Rock were stations, said owners transferred said receipts to either one or the other of said carriers, and received from said carriers bills of lading for the transportation by said carriers of said cotton to various places to which said cotton was then and there shipped by said owners, with an agreement with said railway companies that said cotton should not be shipped until it had been compressed by the plaintiff. There was a standing and continuing agreement between said plaintiff and said railway companies that the plaintiff should proceed to compress said cotton, and all cotton thus received, and should insure the same, after notice of the execution of said bills of lading by said railway companies, against loss by fire during the time that said cotton should be in the hands of the plaintiff, for the purpose aforesaid, for a price averaging from sixty to sixty-five cents per bale, to be paid by said railway companies, respectively, when said cotton should be compressed and delivered to said railway companies on their cars at Argenta for transportation under said bills of lading, at which time said carriers should surrender to plaintiff the said receipts, issued, as aforesaid, at the time that said cotton was deposited with the plaintiff for compression by the owners, as above stated; that all of said cotton was in the custody of plaintiff at the time of said loss, under and by virtue of said custom and agreement, and that it was lost by the negligence of the servants, agents, and employes of said railway companies, and that since said loss said St. Louis, Iron Mountain & Southern Railway Company has been sued in this court by two of said consignees for the value of part of said cotton above named, to-wit, the York Manufacturing Company and Hazard & Chapin, and said railway company defended said actions on the ground that said loss was not occasioned by the negligence of said railway company, or its servants and employes, and on a trial of said firstnamed cause it was adjudged by this court that said York Manufacturing Company and said Hazard & Chapin recover from said railway company the value of said cotton sued for, as aforesaid, and that since said adjudication said railway company has paid said judgment, and the value of a large part of the cotton, for which it had issued bills of lading as aforesaid, and that several suits are now pending in this court against said Little Rock & Memphis Railroad Company, brought by the consignee of portions of said cotton, for the recovery of damages for the loss of said cotton by reason of the negligence of said railroad company, which said suits are now pending and undetermined. On said 14th day ofN ovember, 1887, the plaintiff had in its possession, at its sheds and premises above mentioned, for purposes of compression, a large amount of cotton, to-wit, over 3,000 bales. That of this number 2,700 bales of cotton were held by this plaintiff for the St. Louis, Iron Mountain & Southern Railway Company and the Little Rock & Memphis Railroad Company. By said contract and agreement between plaintiff and said railroads this plaintiff took out the policies of insurance above set out for the purpose of indemnifying this plaintiff against loss and liability, and the said railroad companies against loss and liability, by reason of the destruction of said cotton while it was being held by plaintiff for purposes of compression. The St. Louis, Iron Mountain & Southern Railway has been adjudged, as aforesaid to pay a large sum of money, to-wit, $_____, and, in addition, has paid a still larger amount because of its liability for such loss, amounting in all, up to this date, to $72,209.58* and has made demand therefor...