Houston Direct Nav. Co. v. Insurance Co. North America

• Decision Date: 25 November 1895
• Citation: 32 S.W. 889
• Parties: HOUSTON DIRECT NAV. CO. v. INSURANCE CO. OF NORTH AMERICA.
• Court: Texas Supreme Court

Page 889

32 S.W. 889

HOUSTON DIRECT NAV. CO. v. INSURANCE CO. OF NORTH AMERICA.

Supreme Court of Texas.

November 25, 1895.

Error to court of civil appeals of First supreme judicial district.

Action by the Insurance Company of North America against the Houston Direct Navigation Company. From a judgment of the court of civil appeals (31 S. W. 560, 685) affirming a judgment for plaintiff, defendant brings error. Reversed.

Mott & Armstrong, for plaintiff in error. Hume & Kleberg, for defendant in error.

BROWN, J.

The Insurance Company of North America sued the Direct Navigation Company to recover damages done to and the value of cotton destroyed by fire while in the possession of the navigation company. The insurance company having paid the loss to the owners of the cotton, which had been shipped from Houston on a barge belonging to the navigation company, and insured for the owners by the Insurance Company of North America, the insurance company claimed to be subrogated to the rights of the owners. The navigation company pleaded a general denial, and by special answer to the effect that the fire "was not due to its negligence, nor to its design or neglect"; that the shipment was an interstate shipment, and that the contracts for the transportation of the cotton were maritime contracts concerning the transportation of freight upon the navigable waters of the United States connecting with the high seas; that the barge Katinka was duly enrolled and licensed under the laws of the United States for engaging in such commerce; that the loss was occasioned by fire not due to its negligence. There was a trial before the court without a jury, and judgment rendered for the plaintiff, which judgment was affirmed by the court of civil appeals. The facts are as follows: The Direct Navigation Company is a corporation created by special act of the legislature of the state of Texas, approved October 9, 1866, which act contains, among others, the following provision: "Sec. 10. That the company shall, within six months after the passage of this charter through the legislature, have on the waters of Buffalo Bayou and Galveston Bay and Harbor a sufficient number of steamers, barges and propellers to meet the demands of commerce upon said company, and they shall be subject in the transportation of freight to the laws applicable to common carriers." The navigation company was organized under this act, and ever since has operated under it, and under license from the United States, running and navigating steamers, barges, and propellers upon the waters of Buffalo Bayou and Galveston Bay, between the city of Houston and the city of Galveston, and to seagoing vessels, for the purpose of transporting freight. During the month of September, 1892, it owned and operated upon said waters the barge Katinka. On the 15th of September, 1892, the company received at Houston, Tex., 184 bales of cotton, and on the 16th of the same month it received at Houston 154 bales of cotton, giving bills of lading therefor. The bills of lading recited that the cotton was received by the Houston Direct Navigation Company, in apparent good order and well conditioned, of Zeigler & McIlhenny, "for delivery to order; notify John Sherwood & Co. and O. Hayworth, respectively, or their assigns, at Galveston; he or they paying freight and charges, as per margin." The freight and charges were paid at Houston. The bills of lading further provided as follows: "It is understood and expressly stipulated that the liability of the Houston Direct Navigation Company shall cease upon delivery to the next connecting line, and that the said Houston Direct Navigation Company and its connections which receive and transport the said property shall not be liable for loss by fire. * * * The cotton, under this bill of lading, * * * is to be transported to the depots or the landings of the steamboats of forwarding lines at the points receipted to for delivery. It is further agreed that, in case of any loss or damage, that company alone shall be answerable therefor in whose actual custody the same may be at the time of the happening of such loss. This contract is executed and accomplished, and the liability of the Houston Direct Navigation Company terminates, on the delivery of the cotton to the Mallory Line, at Galveston, when the liability of the said Mallory Line commences, and not before." The cotton shipped to order, "notify John Sherwood & Co.," was the property of John Sherwood & Co., who resided in Liverpool; and the cotton shipped to order, "notify O. Hayworth," was the property of C. Menelas, who was a foreign buyer. When the cotton was delivered to the Direct Navigation Company, it was started on its trip to New York and Liverpool, to be transported by the defendant, the navigation company, to Galveston, there delivered to the Mallory Line, which was to transport it to New York, to be there delivered to a connecting line, and thence transported to Liverpool. The bill of lading given by the navigation company was only to Galveston, and then the remainder of the cotton, not destroyed, was delivered to the Mallory Line, which gave another bill of lading. On the 19th day of September, 1892, after 172 bales of the cotton had been unloaded from the barge Katinka at one of the wharves at Galveston, a fire broke out in the balance of the cargo yet on board the barge, destroying a part thereof and damaging the balance. The insurance company, under the terms of its policy, took the damaged cotton, and paid the full amount of the insurance on the cotton so burned, amounting in the aggregate to the sum of $6,729.33. It sold the damaged cotton in open market to the highest bidder, sustaining a loss of $1,643.78, being the value of the cotton burned and the difference between the value of the damaged cotton before it was damaged and the amount realized from the sale. The trial court found that the origin of the fire was unknown, but it expressly declined to determine whether the fire originated from the negligence of the navigation company or not. Under a number of assignments, practically two questions are presented in this case, which may be stated as follows: (1) Was the Direct Navigation Company engaged in interstate commerce while transporting the cotton in question from Houston to Galveston? If so, then (2) did the provision in its charter, that it should "be subject in the transportation of freight to the laws applicable to common carriers," operate to make it liable under the laws of the state for the loss sustained, notwithstanding the limitation contained in the bill of lading, and the exemption provided by the statutes of the United States?

No distinct and certain definition of "interstate commerce" has yet been fixed by the decisions of the courts, and perhaps none can be given which will apply to all cases. But the law, as applicable to this case, deducible from the decisions of the courts, may be stated thus: When a commodity has been delivered to a common carrier to be transported on a continuous voyage or trip to a point beyond the limits of the state where delivered, the character of interstate or foreign commerce attaches thereto. Coe v. Errol, 116 U. S. 517, 6 Sup. Ct. 475; The Daniel Ball, 10 Wall. 557; Ex parte Koehler, 30 Fed. 867; In re Greene, 52 Fed. 113; ...