Lancaster Mills v. Merchants' Cotton-Press & S. Co.

• Decision Date: 07 June 1890
• Citation: 14 S.W. 317
• Parties: LANCASTER MILLS v. MERCHANTS' COTTON-PRESS & STORAGE CO. <I>et al.</I>
• Court: Tennessee Supreme Court

14 S.W. 317

LANCASTER MILLS v. MERCHANTS' COTTON-PRESS & STORAGE CO. et al.

Supreme Court of Tennessee.

June 7, 1890.

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

This is one of a series of suits involving the liability of the compress company, and various railroad companies, for the loss of 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. This particular suit is brought by the complainant, a Massachusetts cotton-spinning corporation, to recover the value of 413 bales of cotton, the defendants being the Merchants' Cotton-Press & Storage Company, a Tennessee Corporation, and the Newport News & Mississippi Valley Company, and the Indiana, Bloomington & Western Railway, both being non-resident railroad companies. There was a decree pro confesso against the latter company, and a final decree fixing its liability as subordinate to that of both the other defendants, and from this decree it has not appealed. There was likewise a decree for the full value of the cotton owned by complainant against the other two defendants, the liability of the compress company being decreed as primary, and that of the Newport News & Mississippi Valley Company as secondary. From this decree each has appealed, and they will be hereafter referred to as the appellants. The bill is filed under the enlarged statutory jurisdiction of the chancery court. The case, as stated in the bill, is this: That complainant purchased at Memphis, Tenn., through Wm. Bowles & Sons, cotton brokers, on November 16, 1887, 413 bales of cotton of the value of $22,037.88, which on that day were delivered to the compress company, a firm engaged in warehousing, compressing, and insuring cotton for its customers, for compressing and delivering to the Newport News & Mississippi Valley Company, to be delivered to the Indiana, Bloomington & Western Railway Company, "and under an agreement made, both with the railway and Wm. Bowles & Sons, that the same should be insured by the said cotton-press and storage company until it was in fact delivered, compressed, on board the cars of the said railway." It is then charged that on the same day the Indiana, Bloomington & Western Railway issued its bill of lading, by which it recited that it had received said 413 bales of cotton to be delivered at Clinton, Mass. This bill of lading is made an exhibit to the bill. The second clause therein stipulates that "neither this nor any other carrier shall be responsible for any loss or damage to said property by fire or floods while at depots, stations, yards, landings, warehouse, or in transit." The third clause provides that each carrier whose line is used to make the transportation shall be liable only for loss or damage on its own line. By the sixth clause it is stipulated that "any carrier over whose route cotton is to be transported hereunder shall have the privilege, at its own cost, of compressing the same for greater convenience in handling and forwarding, and shall not be held responsible for unavoidable delays in procuring such compression." The bill then proceeds to charge that on the 17th of November, 1887, the day after its receipt by the compress company, it was, before compression, totally destroyed by fire while in compress No. 4; that complainant "is informed and believes, and upon information charges, that when said 413 bales of cotton were destroyed they were insured to their full value, under a contract with the compress company made with the Newport News & Mississippi Valley Company, whereby said cotton press and storage company, in consideration that the said railroad company would pay it the sum of about 50 cents for each bale of cotton, to cover compressing, insurance, and loading on board its cars, agreed that it would insure all the cotton carried over the line of said railroad to its full value, for the benefit of the owners thereof and the railway, from receipt in the compress till actual delivery on board the cars of the carrier." It is further charged that when said cotton was destroyed "it was covered by the contract of the compress company, as insurers, to the full value thereof, as fully and completely as though said company had issued to the complainant a policy of insurance covering the risk while the same was in the custody of that company;" that it is advised that the contract made with Bowles & Sons to protect said cotton against loss from its receipt until delivery to the carrier, "and with the railway company, inures to its benefit; and that it can enforce the same in this court, especially as the Indiana, Bloomington & Western Railroad, a non-resident incorporation, and insolvent, and the Newport News & Mississippi Valley Company, declines and refuses, though requested, to institute suit for the benefit of complainant, although its contract was made with the cotton-press company to protect complainant's from loss, and did protect it." "Complainant further shows to the court that when said 413 bales of cotton were destroyed the Merchant's Cotton-Press & Storage Company had either reinsured its own risks or taken out insurance for the benefit of owners to an amount exceeding $300,000, in about forty solvent companies, the names of which it has never disclosed, and which have not been authenticated or approved." The bill then charges that the cotton so destroyed was covered with the insurance so alleged to have been taken out by the compress company; that same was for the benefit of owners; "and that any excess over and above the insurance which has been taken out by the defendant cotton-press company it is bound to pay, unless there is double insurance, and in that event it is bound to pay its proportionate amount thereof. It is but a trustee of the insurance of the cotton for the owner." The bill then shows that complainant had a running policy of insurance issued to it by the Insurance Company of North America. "That company claims that the risk under its policy did not attach until an actual delivery on the cars of the carrier for transportation, and that the purpose and intent of the Merchants' Cotton-Press & Storage Company, the carrier and shipper, was to insure the risk from the receipt of the cotton in compress No. 4, until it was laden aboard the cars of the carrier, when the risk attached under the running policy aforesaid. In this view the said insurance company has declined to pay as a loss under its policy, but has advanced the amount thereof to the complainant until its liability is determined by suit." "Complainant is advised that, inasmuch as by a contract between the carrier and cotton-press company the latter insured said 413 bales of cotton to its full value, it is entitled to recover, on that account, in precisely the same way it would be entitled to recover had the carrier taken out in an insurance company insurance covering said 413 bales of cotton, while in the custody of the cotton-press company, and, being entitled to recover said amount, the insurance company which issued to it the running policy aforesaid insists that it is subrogated to whatever rights complainant has in the premises, and therefore declines to pay as for a loss under its policy."

"Complainant is advised that the right of recovery of the carrier under the contract aforesaid is clear; that it is entitled in equity to the benefit of the contract, the proceeds standing in lieu of the 413 bales of cotton; and that, inasmuch as it can enforce the collection thereof, and that said contract is in writing, and in the hands of the defendant the Merchants' Cotton-Press & Storage Company, or a copy thereof, it asks that the same be filed with its answer;" "and, if mistaken in this view, it is advised that it is entitled to recover the full value of the insurance under the contract made with Wm. Bowles & Sons, the agents of complainant, by which, in consideration that the cotton be intrusted to the cotton-press company, it would insure the same from receipt to actual delivery for full value for the owners; and, if mistaken in this view of the case, complainant insists it is entitled, as owner, to share in the insurance effected by the defendant cotton-press company, to the amount of $300,000, for the benefit of owners of cotton, and which covered its 413 bales of cotton when they were destroyed by fire, and it is entitled to have the defendant cotton-press company declared a trustee thereof, and directed to pay the amount thereof out of the collections which it has made and will hereafter make from said insurance companies, its ratable proportion thereof." This bill concludes with a prayer for a money decree against the compress company, and that it file a list of its policies of fire insurance, and disclose what steps it has taken to collect same; that "the carrier defendants answer and disclose the contract between them whereby the said 413 bales of cotton were to be delivered after compression to the Newport News & Mississippi Valley Railroad; and that the Indiana, Bloomington & Western Railway Company file with its answer the receipt which the compress company gave to it in exchange for the receipts which its agent, J. C. Rogers, delivered to that company, (the same which were delivered to him by the said Wm. Bowles & Sons;) and that the Newport News & Mississippi Valley Company file its written contract with the Merchants' Cotton-Press & Storage Company, or a copy thereof, by which it agrees to transport compressed cotton only, and to pay a fixed sum on each bale of cotton, to cover the insurance, to the full value thereof, compression and loading aboard the cars to the said Merchants' Cotton-Press & Storage Company, and that upon the facts of this case complainants may have all such general relief and special relief as may be proper."

The compress company in its answer admits receipt of cotton, and that it was burned...