Deming v. Merchants' Cotton-Press & Storage Co.

• Decision Date: 05 June 1891
• Citation: 17 S.W. 89,90 Tenn. 306
• Parties: Deming et al. v. Merchants' Cotton-Press & Storage Co. et al.
• Court: Tennessee Supreme Court

17 S.W. 89

90 Tenn. 306

Deming et al. v. Merchants' Cotton-Press & Storage Co. et al.

Supreme Court of Tennessee.

June 5, 1891

Appeal from chancery court, Shelby county; B. M. Estes, Chancellor.

Action by R. H. Deming and others against the Merchants' Cotton-Press & Storage Company and others to recover the value of cotton. For statement of facts, see Lancaster Mills v. Merchants' Cotton-Press & Storage Co., 14 S.W. 317. There was judgment for plaintiffs. Defendants appeal. Modified and affirmed.

Snodgrass J.

At the last term of this court two cases, Lancaster Mills v Merchants' Cotton-Press & Storage Co., and Coates v Merchants' Cotton-Press & Storage Co., were decided. The first of these is reported in full in opinion by Judge Lurton, 89 Tenn. 1, 14 S.W. 317. In that opinion, which fully states many of the facts now being considered, and not necessary to be restated here, it was mentioned that the case was "one of a series of suits [and the Coates Case was another] involving the liabilities of the compress company and various railroad companies for the loss of [about] 14,000 bales of cotton, valued at $700,000, burned on the night of November 17, 1887, while in press No. 4 of the defendant compress company at Memphis, Tenn." In the case now being considered are presented the questions undisposed of in those 2 cases, and 19 others herewith consolidated, together with all other questions arising on bills then pending in the chancery court, and amended, and cross-bills subsequently filed against the compress company, and various railroad and transportation companies and insurance companies, to determine the several rights and liabilities of all such parties to complainants sustaining the loss, and inter sese.

Obviously it is impossible, within the limits to which an opinion must of necessity be confined, to take up seriatim and state the pleadings and facts of each particular case embraced in a record of 4,500 pages, nor is it necessary, for the determination of certain questions disposes of the suits in classes, many of them depending upon the same questions, and to be determined upon adjudication of certain general principles, applicable alike to these, and, in certain instances, to all the classes. Nor is it necessary to state in full the decree of the chancellor. The modifications of that decree, (which was an entirety in all the cases now consolidated,) indicated as a result of the principles now settled by this opinion, determine the proper decree to be drawn as a settlement of the questions raised in each particular case. It is sufficient to say that the skill and ability of the eminent counsel representing the different parties in the pleadings there, and assignments of error here, have so presented, and the forceful and far-reaching comprehension of the chancellor has so determined, the various questions involved, as to enable us to review them all as a series of general questions; and we proceed to present and discuss them in the most natural order in which they arise, incidentally noticing, of course, and applying, those already settled in the Lancaster Mills Case.

The principal question of primary liability of the compress company for loss on account of negligence was settled in the Lancaster Mills Case on evidence not materially supplemented in this record, on the verdict of a jury finding that the company was not liable. The same result was reached in the several other cases now before us by decree not upon verdicts; and with this result we are entirely satisfied, and to this extent the decree is affirmed. Another question practically determined in that case was that the effect of the contracts of the compress company with the several railroads and transportation companies, and impliedly with all persons dealing with the compress company as depositors of cotton, was to make that company liable to railroads and transportation lines who had such contracts, and to owners of cotton deposited with it for compression, not as an insurer, but upon its agreements, express and implied, to procure insurance in good and solvent companies, sufficient to cover any loss while such cotton was under the control of the compress company, and until loaded on cars for transportation. The inception of the liability thus assumed was in the contracts it made with carriers. One of these contracts is set forth in full in the Lancaster Mills Case, and the others stated to be, as in fact they are, in substance identical.

Another contract involved in this case we quote in full, for the purpose of more specific statement on points to be herein considered: "This agreement is made and entered into on this 24th May, 1887, between the Cairo and Vincennes Railroad Co., *** termed the party of the first part, and the Merchants' Cotton-Press & Storage Co., termed the party of the second part, witnesseth: First. The party of the first part hereby agrees to give to the party of the second part all cotton to compress that they carry out of Memphis compressed. The party of the second part bind themselves to properly and promptly compress all of said cotton, and shall insure the same for the benefit of the first party; and the price to be paid therefor by said first party shall be at the rate of 12 1/2 cts. per 100 pounds, bill of lading weights, for all cotton compressed, etc., on and prior to 31st Aug., 1882, and 10 cts. per 100 pounds, bill of lading weights, for all cotton so compressed, etc., thereafter during the term of this agreement. This compensation covers compressing and insurance, as well as the use of the second party's grounds, sheds, platforms, steamboat landing, and all services rendered by said second party in and about such cotton delivered it hereunder until the same is delivered either in cars or to steamboats to the first party by the second party. Second. Such insurance shall be taken for the benefit of the first party, in good and solvent companies, so as to cover any loss while such cotton is under the second party's control, and until delivered to the first party. Third. The second party shall be liable for any loss arising from negligence or lack of care in any wise to such cotton while under its control, agreeing to be bound therefor as a bailee for hire, and for any such loss shall pay the first party all damages and costs, or the first party may retain any dues to the second party to cover such loss; this, however, not to be limited to the amount of such dues. Fourth. The first party hereby constitutes the second party its agent to receive such cotton for it, and sign receipts on which bills of lading may be issued, when cotton is delivered in their compresses on the ground located at its river landing. Fifth. So far as it can legally do so, the first party agrees to establish no other compress agency, nor employ any other compress to do its compressing of cotton, at Memphis, Tennessee, during the term of this contract. Sixth. All bills for compressing cotton shall be paid weekly. Seventh. This contract is to continue in force until the 31st of Aug., 1896, said rate of 12 1/2 cts. per 100 pounds being for one year from the 1st day of September, 1886, and said rate of 10 cts. per 100 pounds for the remaining nine years; and this contract is to relate back to said 1st day of Sep., 1886, and is to cover as to its terms all compressing of cotton by the second party for the first party since that date."

The first of these contracts was made with the L. & N. R. R., and when the facilities for warehousing and compression of the Merchants' Cotton-Press & Storage Company were very limited. But the company built other presses, enlarged its facilities, and extended its contracts until all the railroad and transportation companies doing business in Memphis, and having an initial carrier there, were included in the contractual arrangement under which it did business. It was originally contemplated that all cotton received into its various compresses should be "permitted" by the various carriers in the manner described in detail in the Lancaster Mills Case, but this contemplated method was not adhered to, and cotton was received from owners without permits; when so delivered the compress company receipting therefor, and agreeing, either in face of receipts or understood, to do so as fully when such receipts were not executed, to cover all cotton delivered with insurance. Such we hold to have been the actual fact of their several special contracts, and the effect of their reception of cotton for compression, according to the understanding between themselves and owners. The usage as to all was in substantial accord with special agreements as to some of the patrons of the company, as before explained; that is, to insure for carriers by contracts expressly made, and owners expressly made in the carrier contracts and dray-receipt contracts or usage. It therefore follows that the compress company, not being liable to any for negligence in suffering the cotton to be burned, is liable to all interested as carriers by express contracts made with them, or owners under such express contracts, and those evidenced as made with owners by dray receipts and usage, for the failure to procure insurance sufficient to cover any loss that occurred. The compress company had in fact procured insurance only to the amount of $301,750, while the entire loss was about $700,000.

Before going to other questions involved, it is proper to consider here the relation which this company occupied to the railroad and transportation companies with which it had contracts, and in what sense delivery of cotton to its compresses is to be taken as delivery to these carriers. For them it is argued on the one hand, that, where cotton was delivered to the compress...