Graysonia, Nashville & Ashdown Railroad Co. v. Newberger Cotton Co.

• Citation: 282 S.W. 975,170 Ark. 1039
• Decision Date: 29 March 1926
• Docket Number: 261
• Parties: GRAYSONIA, NASHVILLE & ASHDOWN RAILROAD COMPANY v. NEWBERGER COTTON COMPANY
• Court: Arkansas Supreme Court

282 S.W. 975

170 Ark. 1039

GRAYSONIA, NASHVILLE & ASHDOWN RAILROAD COMPANY v. NEWBERGER COTTON COMPANY

No. 261

Supreme Court of Arkansas

March 29, 1926

Appeal from Howard Chancery Court; C. E. Johnson, Chancellor affirmed.

Decrees affirmed.

J. G Sain and DuLaney & Steel, for appellant.

Theodore L. Bailey (New York) and W. P. Feazel, for appellee.

OPINION

WOOD, J.

Three separate actions were instituted in the Howard Chancery Court: The plaintiffs in the actions, the Newberger Cotton Company and the Lesser-Goldman Cotton Company, are foreign corporations authorized to do business in this State as cotton brokers, and during the year 1923 engaged in that business in this State. The actions were instituted against the Graysonia, Nashville & Ashdown Railroad Company, a common carrier for hire in this State with its line of railroad extending from Nashville to Ashdown, and the Mineral Springs Farmers' Union Warehouse & Marketing Company, a bonded warehouse company engaged in the warehouse business at Mineral Springs, Arkansas, a station on the railway company's line. The complaints in substance alleged that the railway company, prior to September, 1923, had constructed a sidetrack along the side of the warehouse of the warehouse company at Mineral Springs, Arkansas, for the purpose of receiving cotton and loading the same on cars for shipment from the warehouse of the warehouse company; that this was the only place from which the railway company received and accepted cotton for shipment at Mineral Springs; that the railway company had established a custom of issuing bills of lading for cotton stored with the warehouse company upon surrender to the railroad company of the warehouse receipts or tickets representing the cotton to be shipped. It is alleged that cotton was purchased by the plaintiffs and stored with the warehouse company, which company issued receipts for the cotton so purchased and stored, which receipts specified that such cotton would be delivered to the bearer of the receipt upon the surrender of the receipt and the payment of lawful charges; that these warehouse receipts were negotiable instruments, and that the title and right to possession of the cotton represented by them passed with their delivery. The plaintiffs alleged that they delivered to the agent of the railroad company at Mineral Springs on certain dates certain warehouse receipts for certain numbers of bales of cotton, and gave the agent directions for their shipment, and received in return from the agent bills of lading for the shipment of the cotton to the plaintiffs at Ashdown, Arkansas; that the railroad company neglected to ship the cotton as it was required to do under its contract, but instead allowed the cotton to remain in the warehouse of the warehouse company for an unreasonable length of time, and until the cotton was destroyed by fire on September 24, 1923. The plaintiffs alleged that the railroad company was liable to it as insurer on its contract of shipment for the loss of the cotton; that the warehouse company was liable to the holder of the warehouse receipts under the terms of the contract contained therein also as an insurer; that the fire that caused the destruction of the cotton was by reason of the negligence of the warehouse company in failing to maintain a watchman; that the railroad company had in its hands the warehouse receipts, and that, as holder of such receipts, it had a cause of action against the warehouse company for the loss of the cotton; that the plaintiffs had insured the cotton, but there was a provision in their contract of insurance to the effect that the insurer should not be liable for any loss or damage for any goods or merchandise in the possession or control of any common carrier or bailee, or where any carrier or bailee had effected insurance on the goods, and that because of said clause the plaintiffs were unable to enforce their claim against the insurance companies for the loss of the cotton. The plaintiffs alleged that the railroad company and the warehouse company had also effected insurance on the cotton in controversy; that they had collected their insurance, but had refused to pay the plaintiffs for the cotton; that, after such refusal, the insurance companies with which the plaintiffs had insured the cotton advanced to the plaintiffs the value of the lost cotton as adjusted under those contracts upon an agreement of plaintiffs to repay the sums advanced only to the extent of any net recovery that the plaintiffs might have of the carrier or bailee on account of the loss or damage to the cotton, or any net recovery the plaintiffs might procure by reason of the insurance effected by the carrier or bailee on the cotton, and upon an agreement that the plaintiffs would with due diligence enter and prosecute suits against the railroad company, carrier, bailee, or other persons liable for said loss. The plaintiffs therefore alleged that these actions were instituted by them for the benefit of the insurance companies with which they had insured the cotton, and with whom they had made the agreements for the loan. They alleged that, if it should be determined that the railroad company is not liable for the loss of the cotton, then plaintiffs were entitled to be subrogated to any rights that the railroad company might have against the warehouse company for the loss of the cotton. The complaints concluded with a prayer in the alternative that the plaintiffs have judgment against the railroad company for the value of the cotton lost by fire, or, if it should be determined that the railroad company was not liable, that the plaintiffs be subrogated to the rights of the railroad company as the holder of the receipts as against the warehouse company for the value of the lost cotton. The complaints in all the actions were the same or similar, except as to the respective amounts claimed by each of the plaintiffs.

The defendants filed separate demurrers in which it is alleged that the complaints do not state a cause of action in equity, and that there was a misjoinder of parties. The court overruled the demurrers, and the defendants filed their separate answers, in which all the material allegations of the complaints were specifically denied. It was also set up that one of the insurance companies for whose benefit the action was brought was not authorized to do business in this State, and that the plaintiff, who was insured with that company, was not authorized to bring the action for the benefit of such company. The answers concluded with a prayer, first, that the causes be transferred to the law court, and, second, that the plaintiffs take nothing by reason of the actions.

The testimony on behalf of the appellees tended to prove that they were cotton brokers, and that their agents, several years prior to 1923 and during that year, purchased cotton for them at Mineral Springs, Arkansas, a station on the appellant's railroad. Their agents would purchase the cotton, and it was stored in the warehouse company's warehouse, which company issued its receipts for same; that these warehouse receipts would be taken by plaintiff's agents to the agent of the railroad company, and that company accepted these receipts and issued bills of lading for the cotton. When the plaintiffs' agents delivered the warehouse receipts to the agent of the railroad company, and received its bills of lading, the cotton was ready for shipment, and was delivered by the plaintiff to, and accepted by, the railroad company for shipment. The railroad company's sidetrack on which it loaded cars with cotton for shipment ran by the door of the warehouse, and the cotton was loaded from the warehouse of the warehouse company. The railroad company had no separate warehouse in which cotton was stored, and from which same was shipped, but for several years it had been its custom to accept cotton for shipment, and to load same on its cars from the warehouse of the warehouse company. During the year 1923 it shipped only one carload of cotton from Mineral Springs that was not loaded on its cars directly from the warehouse of the warehouse company. That cotton was loaded on the car of the railroad company by the owners of the cotton on the track of the railroad company, and shipped direct to a co-operative cotton association. When the cotton in controversy had thus been delivered and accepted by the railroad company for shipment, and the company was ready to load the same on its cars, its depot agent at Mineral Springs would give one of the company's servants, employed for the purpose of loading the cotton, an order containing the list and number of the bales of cotton to be shipped, and he would take the same to the manager of the warehouse company, who would turn over the cotton to the loader, and the same was loaded on the cars direct from the warehouse. The cotton was shipped out by the railroad company in the order in which it had issued its bills of lading, the cotton first received and accepted by it being shipped out first. As soon as the cotton was loaded on the cars for shipment, the loader would return the list of the cotton thus loaded to the station agent, who placed the same on his file, and turned over to the owner the warehouse receipts corresponding to the bales of cotton thus loaded for shipment.

There was testimony on behalf of the defendant, the railroad company, to the effect that the warehouse company charged the plaintiffs the sum of fifty cents per bale for weighing sampling, and handling their cotton for shipment. The total receipts of the warehouse company for storage, insurance and handling the cotton, and for all services rendered by it to the plaintiffs, was the sum of $ 1.10 per bale. Before the railroad company...