Red River Cotton Oil Co. v. Texas & P. Ry. Co.

• Decision Date: 09 December 1949
• Docket Number: No. 39205,39205
• Citation: 44 So.2d 101,216 La. 519
• Court: Louisiana Supreme Court
• Parties: RED RIVER COTTON OIL CO. et al. v. TEXAS & P. RY. CO.

Page 101

44 So.2d 101

216 La. 519

RED RIVER COTTON OIL CO. et al. v. TEXAS & P. RY. CO.

No. 39205.

Supreme Court of Louisiana.

Dec. 9, 1949.

Rehearing Denied Jan. 9, 1950.

Peterman & Burden, Alexandria, for defendant and appellant.

Stafford & Pitts, Alexandria, for plaintiffs-appellees.

FRUGE, Justice.

Defendant, the Texas and Pacific Railway Company, is appealing from a judgment in favor of the Red River Cotton Oil Company and its four insurers in the aggregate amount of $31,573.08, representing the value of four freight-car loads of copra destroyed in a fire at the oil company's mill.

The undisputed facts of the case are that the copra was part of a consignment shipped from the Philippine Islands to New Orleans by steamship and from New Orleans to Alexandria, Louisiana, on the defendant railroad. When the cars arrived in Alexandria, on Sunday, February 9, 1947, they were moved by defendant's switch engine onto the spur track which serves the plaintiff's mill. It appears that the spur track although owned by the railroad, was maintained for the exclusive use of the plaintiff under a spur track agreement. The track enters the wire fence enclosing the mill grounds through a double gate about 687 feet from the switch point. The gates are kept locked when the mill is not operating and the plaintiff keeps the key. On the day in question, following the customary procedure, the engineer halted the train at the gates and blew the whistle as a signal for the oil mill employees to open them. The gates were opened and, at the direction of the oil mill employees, the cars were pushed into the oil mill enclosure, weighed one by one on the oil mill scales, and spotted on the track at the place designated by the oil mill employees. The switch engine was backed out and the gates were closed and presumably locked.

The oil mill was shut down on Sunday until 6 p.m. and the copra was not unloaded. At about 3:30 a.m. on Monday a fire broke out in the oil mill adjacent to the cars and four of the cars with their cargo were destroyed. There is some dispute as to the cause of the fire but we agree with the trial judge that it remains unknown. It is agreed that the free time for unloading had not elapsed.

The copra was shipped from New Orleans to Alexandria under bills of lading which, together with the applicable tariffs and classifications lawfully on file with the Interstate Commerce Commission, constitute the contract between the parties. V. Rivera S. En C. v. Texas & N. O. R. et al., 211 La. 969, 31 So.2d 180.

The common law development of the carrier's liability as an insurer has been presented recently in detail by this court in the opinion by Chief Justice Fournet (then senior associate justice) in the Rivera case, supra. Undoubtedly, if that liability still attaches, the defendant is answerable for the loss. We have here the problem of determining whether, under the bills of lading, that liability was still in full force and effect when the loss occurred, or whether, by the delivery of the cars into the custody of the plaintiff, the liability had ceased. The question is one of the intent of the parties as expressed in the bills of lading.

The pertinent parts of the bills of lading are quoted as follows:

'Contract Terms and Conditions

'Sec. 1, (a) The carrier or party in possession of any of the property herein described shall be liable as at common law for any loss thereof or damage thereto, except as hereinaftr provided.

'(b) * * * The carrier's liability shall be that of warehouseman, only, for loss, damage, or delay caused by fire occurring after the expiration of the free time allowed by tariffs lawfully on file (such free time to be computed as therein provided) after notice of the arrival of the property at destination or at the port of export (if intended for export) has been duly sent or given, and after placement of the property for delivery at destination, or tender of delivery of the property to the party entitled to receive it, has been made * * *.

'Sec. 4, (a) Property not removed by the party entitled to receive it within the free time allowed by tariffs, lawfully on file (such free time to be computed as therein provided), after notice of the arrival of the property at destination or at the port of export (if intended for export) has been duly sent or given, and after placement of the property for delivery at destination has been made, may be kept in vessel, car, depot, warehouse or place of delivery of the carrier, subject to the tariff charge for storage and to carrier's responsibility as warehouseman, only, * * *.'

We are of the opinion that this case is controlled by the case of Michigan Central Railroad Company v. Mark Owen and Company, 256 U.S. 427, 41 S.Ct. 554, 65 L.Ed. 1032, in which the Supreme Court of the United States held that the carrier liable for the loss of goods under similar circumstances when shipped under a similar bill of lading.

In that case the car in question had been placed on a public siding or term track. The consignee had broken the railroad company's seals, inspected the cargo, found it to be intact and begun unloading it. Before the cargo was completely unloaded, part of it was stolen. The bill of lading for the shipment provided in Section 1, 'The carrier or party in possession of any of the property herein described shall be liable for any loss thereof or damage thereto, except as hereinafter provided.'

In Section 5 it was provided:

'Property not removed by the party entitled to receive it, within forty-eight hours exclusive of legal holidays, after notice of its arrival has been duly sent or given, may be kept in car, depot, or place of delivery of the carrier subject to a reasonable charge for storage and to carrier's responsibility as warehouseman only * * *.'

Counsel for the railroad contended that the provision thus quoted was not to apply in cases where there had been a delivery of the car to the consignee and the consignee had assumed complete control of it, and that its liability had ceased. In disposing of this contention the court stated:

'The bill of lading is definite, as we have pointed out, in its provisions and of the time at which responsibility of the company shall be that of warehouseman, and by necessary implication, therefore, until that responsibility attaches, that of carrier exists.' [256 U.S. 427, 41 S.Ct. 556]

Defendant in the instant case has attempted to distinguish the Michigan case from the case at bar by pointing out that in the instant case the cars had been placed on a private spur track within the locked enclosure of the consignee's premises.

Although the Supreme Court did say in the opinion that the shipment had not been delivered, we do not believe that this statement formed the point upon which the decision turned. As we interpret the decision it rests upon the proposition that the bill of lading indicated an intention on the part of the parties thereto to fix the liability of the carrier as that of an insurer until the operation of Section 5 of the bill should convert it to that of warehouseman.

A similar intent is indicated by the terms of the instant bill of lading quoted above, especially when considered with the report of the hearing before the Interstate Commerce Commission at which the present bill of lading was originally adopted and prescribed for all carriers within the commission's jurisdiction. See In the matter of Bills of Lading, 52 I.C.C.R. 671 (1919). The report reveals that the commission's action was taken after a hearing in which the major carrying, as well as the major shipping, interests of the country were represented, the purpose of all concerned being to establish a uniform bill of lading which would be fair and acceptable to both the shipping and carrying interests.

Prior to the hearing the shippers and carriers had met in committee and agreed upon most of the terms of the bill. At the hearing the arguments were presented pro and contra the disputed clauses. We have studied that report in an effort to determine the intent of the parties to that hearing in submitting, supporting or opposing the various clauses which were in contest and to determine the purpose of the commission in adopting the provisions which it adopted and which make up the standard form of the bill of lading which is the immediate predecessor to the bills presently under consideration.

The first clause in the bill of lading adopted by the commission was agreed upon by both shippers and carriers as follows:

'Sec. 1. The carrier or party in possession of any of the property herein described shall be liable for any loss thereof or damage thereto except as hereinafter provided. * * *'

In effect it prescribes a general and absolute liability for loss, which, of course, will remain in force as long as the contract is in force, with the exceptions thereafter provided. This was in keeping with the carrier's common law liability as an insurer, first laid down by Lord Holt in the case of Coggs v. Bernard, 1 Smith's Leading Cases 369. The next clause with which we are concerned deals with one of the exceptions to the general liability, namely, the change from the general and absolute liability prescribed in the first clause to that of a warehouseman, which change would occur at the expiration of the free time after notice of arrival and placement for delivery. The terms are exactly the same as those used in the bills of lading in the instant case. From examination of the report of the hearing we conclude that it was well understood by everyone concerned that this clause, which was submitted by the carrier in substantially the same form as adopted, was to have the effect of removing the uncertain and nebulous aspect of the law as to the point at which the carrier's liability as an insurer ended. In the first place, as the commission pointed out in yielding to the carrier's insistence that this clause be adopted, there...