Chicago, R.I. & P. Ry. Co. v. Barrett

• Decision Date: 12 July 1911
• Docket Number: 2,085.
• Parties: CHICAGO, R.I. & P. RY. CO. v. BARRETT et al.
• Court: U.S. Court of Appeals — Sixth Circuit

190 F. 118

CHICAGO, R.I. & P. RY. CO. v. BARRETT et al.

No. 2,085.

United States Court of Appeals, Sixth Circuit.

July 12, 1911

E. E Wright and Alex C. King, for plaintiff in error.

Caruthers Ewing, for defendants in error.

Before SEVERENS and KNAPPEN, Circuit Judges, and SANFORD, District judge.

SANFORD District Judge.

This suit was brought by the trustees of Inman & Co., bankrupts the defendants in error, to recover of the Railway Company the plaintiff in error, for the use of the Maritime Insurance Company, Limited, the value of 263 bales of cotton alleged to have been received by the Railway Company from Inman & Co. for transportation and not delivered.

The issues were tried by the Circuit Court without the intervention of a jury, in pursuance of a written stipulation filed under section 649 of the Revised Statutes (U.S. Comp. St. 1901, p. 525). The court made a special finding of facts and upon such findings rendered judgment against the Railway Company for $17,100.90, and costs. A motion for a new trial having been overruled, the Railway Company has brought this writ of error to review the judgment.

The declaration, which was filed July 12, 1909, alleged, so far as here material, that the firm of Inman & Co., of which the plaintiffs below were the trustees in bankruptcy, owned, prior to the adjudication in bankruptcy, in May, 1908, 263 bales of cotton, which were delivered to the Railway Company, a common carrier, at various points in the state of Arkansas on various dates, for transportation and delivery to Inman & Co. at Little Rock, Ark.; that said cotton was never delivered to Inman & Co., and the Railway Company was liable for its failure to deliver said cotton within a reasonable time; that a reasonable time for transporting and delivering said cotton was not exceeding 10 days from its delivery to the Railway Company, and yet said Railway Company had not only failed to deliver the cotton within a reasonable time but had failed to deliver it at all, and the same had never yet been delivered, though demand had been made therefor; that the reasonable market value of the cotton at the time and place where it should have been delivered by the Railway Company was $20,000.00; that the cotton, for loss of which the suit was brought, had been shipped unbilled and negligently kept by defendant Railway Company in its cars and on the ground for a long time, and became greatly damaged by negligent handling, and while undertaking to rework the cotton, or a part of it, to reduce the damages, the Railway Company had lost said cotton, or a part thereof, and had failed to deliver the same; that the suit was brought to recover for the cotton received by the Railway Company for transportation and never delivered to the consignee; that prior to delivery to the Railway Company Inman & Co. had said cotton insured against loss in the Maritime Insurance Company, Limited, and that after the defendant Railway Company became liable therefor and failed to pay for said cotton said Insurance Company, as under its insurance contract it was obligated to do, paid Inman & Co. therefor, and in settlement of said loss it was understood and agreed that the recovery of the Railway Company of the value of said cotton should be by the plaintiffs paid to said Insurance Company and said Insurance Company became subrogated for its indemnity to any and all rights of Inman & Co., or the plaintiffs, as trustees; and that the suit was brought and prosecuted for the use and benefit of said Insurance Company.

The declaration did not, however, aver the destruction of the cotton, either by fire or otherwise.

The Railway Company filed pleas of the general issue, and also a special plea to the effect that it had duly delivered the cotton at its destination to the Gulf Compress Company for the account of Inman & Co. and subject to their order, and that while the cotton was stored in this compress after such delivery it was destroyed by fire without any negligence or fault upon the part of the Railway Company.

By stipulation of the parties it was agreed, among other things, that the plaintiffs were the trustees of Inman & Co. and had been authorized by the court of bankruptcy to bring the suit; that the defendant admitted liability for 23 bales of the cotton and denied liability for the remaining 237 bales; that said 237 bales were delivered to the Railway Company at various points in Arkansas for transportation to Inman & Co. at Little Rock, Ark., on the average date of December 16, 1906; that the average weight of each bale was 512 pounds and the average price 10 3/4 cents per pound; and that said 237 bales were burned in the Gulf compress on July 17, 1907, at Little Rock, Ark. The undisputed evidence further showed that this cotton was consigned to Inman & Co. at Little Rock, Ark., and in pursuance of written directions from Inman & Co. was to be delivered at that place to the Gulf Compress Company, which handled cotton for Inman & Co. and other shippers; that it was shipped by the Railway Company unbilled; that in consequence upon its arrival at the Compress Company it could not be identified, and the Compress Company refused to accept delivery; that it was then deposited for some time in a field near the compress, where it became materially damaged, and later was taken to the Compress Company for the purpose of being reconditioned, that is, of being rebaled when necessary and otherwise placed in proper condition. There is conflicting evidence, however, as to whether Inman & Co. made a demand on the Railway Company for the delivery of the cotton or refused to accept delivery of it in its damaged condition without reconditioning and settlement of the claims for damage; as to whether the sending of the cotton to the Compress Company for the purpose of being reconditioned was done by the Railway Company for its own protection or at the instance of Inman & Co. and as a condition of settlement demanded by them; and as to whether it was reconditioned by the Compress Company as the agent of the Railway Company or as the agent of Inman & Co. and under the supervision of their officers and agents.

It is undisputed, however, that while still at the compress, more than six months after the original shipments and when the reconditioning had been nearly, if not entirely, completed, the cotton was destroyed by fire in the compress, the cause of the fire not, however, being shown; and that thereafter the Insurance Company paid the amount of the loss caused by the fire to Inman & Co., taking their receipt therefor, in which it was recited that in consideration of this payment the Insurance Company was subrogated to all the rights of recovery and claim of Inman & Co. against the Railway Company, and that subsequent to such payment Inman & Co. had no interest in such recovery except for the benefit of the Insurance Company.

The findings of fact made by the trial judge were as follows:

'In this case the court finds that Inman & Co. delivered to the defendant two hundred and sixty (260) bales of cotton of an average weight of (512) five hundred pounds each, and of an average value of ten and three-quarter cents (10 3/4) per pound, on December 16, 1906, and that a reasonable time within which delivery should have been made thereof was ten days, and that the defendant has never complied with its obligation to deliver said cotton, nor (now) made such tender thereof to the consignee as relieves it from its liability as a common carrier. I find that the right of the Insurance Company to b subrogated to the rights of Inman & Co. was not waived, and that the Insurance Company, having paid Inman & Co., for the loss of the cotton in question, is entitled to subrogation. I find that plaintiffs are entitled to recover of the defendant the value of 260 bales of cotton of an average weight of 512 pounds per bale, and the average value of 10 3/4 cents per pound, with interest from January 1, 1907.'

A judgment was thereupon entered in which it was recited that 'the court having heard the evidence and duly considered the same, and having made a special finding of facts now finds in favor of the plaintiffs and against the defendant,' and it was ordered and adjudged that the plaintiffs recover of the defendant Railway Company, for the use and benefit of the Insurance Company, the sum of $14,310.40, with interest from January 1, 1907, amounting to $2,790.50, making a total of $17,100.90, together with all the costs of the cause. The defendant excepted to the rendition of this judgment.

Subsequently, upon the defendant's petition to rehear and motion for new trial, the court, in a memorandum opinion, stated that upon re-examining the testimony he thought its greater weight warranted 'the finding that there was no delivery of the cotton to the plaintiff;' and both the petition to rehear and motion for a new trial were disallowed.

We are of the opinion that the judgment below should be reversed and a new trial granted, for the following reasons:

1. While the declaration is inartificially framed, it must clearly be regarded as a suit to recover the value of the cotton on account of its conversion by the Railway Company before the fire, as distinguished from a suit to recover damages arising either from negligent delay in delivery or from the destruction of the cotton by fire. No evidence was introduced either as to the extent of the damages caused by the delay in delivery or as to the cause of the fire; and it is clear from the entire record that the case was tried by both sides as a suit for conversion, and that it was upon this theory alone that the court below rendered judgment for the entire value of the cotton.

And it is upon this theory that the case has been argued...