Minneapolis, St. Paul & Sault Ste. Marie Ry. Co. v. Home Ins. Co
| Decision Date | 13 November 1893 |
| Docket Number | 8259,8260 |
| Citation | 56 N.W. 815,55 Minn. 236 |
| Parties | Minneapolis, St. Paul & Sault Ste. Marie Ry. Co. v. Home Ins. Co |
| Court | Minnesota Supreme Court |
Argued October 23, 1893.
Application for reargument denied December 20, 1893.
Appeal by defendant, the Home Insurance Company of New York from an order of the District Court of Hennepin County, Seagrave Smith, J., made March 21, 1893, denying its motion for a new trial.
Appeal also by plaintiff, the Minneapolis, St. Paul and Sault Ste Marie Railway Company, from that part of the same order reducing the verdict from $ 52,673.55 to $ 30,136.97.
On September 5, 1891, the Insurance Company in consideration of $ 600 premium insured the Railway Company for three months against all direct loss or damage by fire which it might sustain, not exceeding $ 50,000 "on flour, corn, grain seeds, provisions and other merchandize, excluding petroleum and its products, it being understood and agreed that the insurance under this head is to cover the liability of the Railway Company as carriers and warehousemen as well as its own property and its charges for freight or moneys paid on or charged on for which the Company is liable or may have earned while contained in its elevator situated at Gladstone Mich." The Railway Company was doing business as a carrier of grain from Minneapolis by cars to Gladstone and sending it from there by vessels to Buffalo, N.Y. It unloaded the grain from its cars into this elevator where it remained until it could be loaded upon vessels. Several dealers at Minneapolis employed the Railway Company to carry their grain to Buffalo by this route. On November 29, 1891, the elevator and 74,054 bushels of wheat therein were casually destroyed by fire. The wheat belonged to such dealers and was worth $ 60,273.94. The Railway Company had earned freight by carrying it thus far and for storage in this elevator, $ 3,768.03, but had no other interest in the wheat. The owners had not insured this wheat. They relied upon an oral understanding with the Railway Company that it would insure it for their benefit, but the bills of lading given the shippers provided that the Railway Company should not be liable for any loss or damage to the property arising from or caused by fire, not caused by its own negligence. By the policy other insurance was permitted, to the amount of $ 50,000 in other insurance companies. Such insurance was made on grain while in this elevator and belonging to the Railroad Company or held by it in trust. This action was brought by the Railway Company to recover of the Home Insurance Company the sum insured. The defendant denied liability, except for one half the freight and storage earned. The issues were tried on December 13 1892.
At the close of the evidence the Judge instructed the jury to return a verdict for the plaintiff for the $ 50,000 and interest. The defendant excepted and moved for a new trial. After argument the trial Court was of opinion that defendant was liable for only one half the value of the wheat, because of the other insurance and ordered the verdict to be cut down to $ 30,136.97 and directed that plaintiff have judgment for that amount with interest and costs. The plaintiff appeals from that part of the order reducing its recovery and the defendant appeals from the refusal of its motion for a new trial.
On defendant's appeal the order appealed from is reversed. On plaintiff's appeal that part of the order appealed from is affirmed.
S. E. Hall, H. S. Durand, McVey & Cheshire, for the Insurance Co.
The policy issued by this defendant insures only the liability of the railroad company. It does not insure the goods. This distinction must be kept in mind, that the other companies insured the goods and the Home Company by its policy insured the Railroad Company's liability only. Home Ins. Co. v. Baltimore Warehouse Co., 93 U.S. 527.
What is covered by the policy must be ascertained by the words written in the policy. Frost's D. L. & W. W. Works v. Millers & M. M. Ins. Co., 37 Minn. 300; Burton v. Connecticut Mutual Life Ins. Co., 119 Ind. 207; Mills v. Farmer's Ins. Co., 37 Ia. 400; Fuller v. Phoenix Ins. Co., 61 Ia. 350; Gillett v. Liverpool L. & G. Ins. Co., 73 Wis. 203; Blake O. H. Co. v. Home Ins. Co., 73 Wis. 667; King v. Merriman, 38 Minn. 47.
The Court below seems to have ignored the fact that the railroad company performed its oral agreement with the shippers and did obtain insurance upon the grain at its own expense for the sum of $ 50,000 in the other companies.
Although the bill of lading issued and accepted exempted the carriers from liability for fire, yet the bill of lading was in no sense inconsistent with the allegations in the complaint and the proof, that the railroad company also agreed to procure insurance for the benefit of the owners. The owners had a right to accept the bill of lading and then go out and procure insurance from an insurance company, or they could contract with the railroad company to insure. This is what they did do as the evidence shows.
The terms of the policy of the Home Insurance Company cover in express words the liability of the railroad company as carriers and warehousemen. The liability of the railroad company as established by the evidence was not as a carrier or warehouseman. Its liability to the shippers arises out of an oral contract between it and the owners of the grain to insure the grain for their benefit.
The grain in question was shipped over the plaintiff's railroad upon bills of lading, which exempted the railroad company from liability on account of fire. Parol evidence was not admissible to vary or contradict the terms of the bill of lading, and the defendant insurance company stands in the shoes of the railroad company and may make any defense in this case which the railroad company could itself have made had it been sued by the shippers. The railroad company not being liable to the shippers, this defendant is not liable to the plaintiff, because by the terms of the policy it only insured the liability of the plaintiff.
The effect of exchanging a small shipping receipt for a large bill is stated in Wild v. Merchants D. T. Co., 47 Ia. 247, as follows;
"Where a common carrier upon the delivery of merchandize for transportation issued to the consignor a shipping receipt, which stated that the bill of lading would be issued upon application at a place designated therein and that the merchandize would be transported subject to the conditions expressed in the bill of lading, held that the bill of lading and not the shipping receipt embodied the contract of the parties and that the consignee would be bound by the conditions expressed in such bill of lading.
A warehouseman is only liable for his own negligence. There can be no pretense here that plaintiff is liable simply as a warehouseman, because there is no pretense that the fire was caused by the negligence of plaintiff. Aldrich v. Boston & W. R. Co., 100 Mass. 31; Rice v. Nixon, 97 Ind. 97; Claflin v. Meyer, 75 N.Y. 260; Willet v. Rich, 142 Mass. 356.
A. H. Bright and Kitchel, Cohen & Shaw, for the Railway Co.
The contract as established by the parol evidence was a contract under the common law liability of carriers to carry the grain to Gladstone, and thence deliver it through its elevator upon the vessel of the next water carrier at Gladstone. It was not an agreement to insure, but an agreement at common law to deliver to the next connecting carrier. The oral evidence was properly received. The rule that parol evidence is inadmissible to vary the terms of a written instrument is applied only in suits between the parties to the instrument, or their privies, and not to suits where the issue is between one of the parties to the instrument and a third person. Van Eman v. Stanchfield, 10 Minn. 255; Sanborn v. Sturtevant, 17 Minn. 200; National C. & L. Builder v. Cyclone S. S. P. Co., 49 Minn. 125; Buxton v. Beal, 49 Minn. 230; Clerihew v. West Side Bank, 50 Minn. 538; Lee v. Adsit, 37 N.Y. 78; McMasters v. President Ins. Co. of N. Am., 55 N.Y. 222; Lowell Manuf'g Co. v. Safeguard Fire Ins. Co., 88 N.Y. 591.
The plaintiff was not a warehouseman with reference to the grain. The answer admits that plaintiff was the owner of the elevator at Gladstone and that it was used by the plaintiff in its business as a common carrier.
If the Railway Company be held liable for the grain in the elevator as a common carrier, then in the absence of proof as to the origin of the fire, defendant was liable for the grain destroyed in the elevator and is within the terms of the policy as interpreted by the defendant.
There...
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