Insurance Co. of North America v. Delaware Mut. Ins.

50 F. 243, 1892 U.S. App. LEXIS 1715
CourtU.S. Circuit Court for the District of Western Tennessee
DecidedMarch 3, 1892
StatusPublished
Cited by3 cases

This text of 50 F. 243 (Insurance Co. of North America v. Delaware Mut. Ins.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Western Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Co. of North America v. Delaware Mut. Ins., 50 F. 243, 1892 U.S. App. LEXIS 1715 (circtwdtn 1892).

Opinion

Hammond, District Judge.

On the 17th day of November, 1887, 14,000 bales of cotton were burned while awaiting compression, for convenience of carriage, in the sheds of the Merchants’ Cotton-Press & Storage Company at Memphis. This cotton had been sent there by numerous shippers of it, under the .usages of the business, upon dray tickets and receipts of the compress company, expressing on their face the fact that the cotton, was insured by that company. Upon these tickets and receipts the numerous shippers in small lots had procured from the various carriers and transportation lines doing business from Memphis'bills of lading, consigning the purchases to owners at the points of destination, which.consignees had paid for the cotton upon the drafts of the consignors, with the bills of lading attached. The consignees, with few exceptions, held open policies of insurance in what has been called throughout the litigation “marine” companies of insurance. These were companies issuing a form of policy ordinarily used in marine insurance to cover goods afloat or about to be transferred by water, but applied in these interior shipments, to merchandise in transit by rail, or partly by rail and partly by water. The policies usually begin the risk [245]*245at the moment of delivery to the consignee or purchaser, or to his can-Tier, and end it at the moment of arrival at its destination, and contain differing stipulations as to the adjustment of a loss in its relation toother additional or double insurance; and they open and close upon each and every shipment as it arises. The consignees of all this cotton now in controversy held marine insurance of this character upon which the risk had attached. Another peculiarity of this and all fire insurance of cotton is that the policies are valued at an agreed price per bale, generally, and in this case at $50 per bale, or invoice cost and 10 per cent., to save all question of weight, quality, or value elements of any kind. The marine companies more or less promptly paid or adjusted their losses, either under stipulations in the policies or outside of them, with a reservation of one kind or another that the payment should not prevent any claim they might have over against the carrier, through subrogation to the rights of the owner.

To build up a monopoly of the business of compressing cotton bales by the costly methods that must be used, this compress company had made long-time contracts with the carriers doing business out of Memphis that it should do all the compressing, the carrier securing the bales in the form of light pressing in use upon the plantations. These contracts were in writing, and, among others, contained a stipulation that the compress company would, at its own expense, keep all cotton fully insured, in good and solvent companies, for the benefit of the railroads, transportation lines, and owners. At the time of this fire the compress corn pany held about 52 policies of common fire insurance in the ordinary form, with ordinary stipulations as to other additional or double insurance, amounting to $801,750, something less than half of the total loss. The policies each covered all the cotton in the shed. They were issued by 44 companies, belonging to 13 states and 1 foreign kingdom, as follows: 7 to Wisconsin, 6 to Illinois, 5 each to West Virginia, Iowa, and Louisiana; 2 each to Alabama and Connecticut, and 1 each to Ohio, Texas, Indiana, Minnesota, Mississippi, and South Dakota, and 6 to England.

Among the contracts of the compress company with the carriers was one with the Cairo, Vincennes & Chicago Line, known as the “C., V. & C. Line,” for its traffic name. This was the Cairo Division of the Wabash system, a consolidated corporation of Illinois and adjacent states. This division was in the hands of receivers, Tracy and Thomas, citizens of New York. These receivers kept an agent at Memphis, soliciting cotton shipments east, upon which they issued bills of lading in the usual form, containing certain stipulations as to fire losses, the legal effect of which is the pivotal point of this litigation. These bills of lading covered the entire distance from Memphis, but the C., V. & C. Line depended on special contracts made by itself, from time tó time, as the occasion required, for transportation to Cairo, its initial terminus, generally by the Mississippi river, but sometimes by rail also.' This line had in this fire an aggregate of about 5,087 bales of cotton, for which it had issued bills of lading, in different lots, to various consignors. The [246]*246marine companies have paid the several consignees, in one form or another, and the plaintiffs and other marine companies and their assignees are parties to this record.

Soon after the fire, litigation arose, and the bill of one of the consignees •and owners went to the supreme court of Tennessee, and the case is reported as Lancaster Mills v. Merchants’ Cotton-Press & Storage Co., 89 Tenn. 1, 14 S. W. Rep. 317. Another case also went to that court, and is known as the case of Deming v. Merchants’ Cotton-Press & Storage Co., 17 S. W. Rep. 89, 90 Tenn. 306. These cases, more in detail, state the facts herein noted, and show the legal questions involved in the litigation, and it is assumed that they will be taken, as this bill assumes, as showing the scope of this case in all its bearings. But the O., V. & C. Line were not parties to that litigation in fact, though named in the record, because there was no service or appearance to bind them; and, because of the absence from the record of the C., V. & C. Line and its receivers, the Deming Case was, by the state supreme court, dismissed without prejudice, so far as concerned the cotton covered by the bills of lading of that line. Hence this bill was filed in the chancery court of Shelby county by three of the marine companies — the Insurance Company of North America, a Pennsylvania corporation; the Atlantic Mutual Insurance Company,'a New York corporation; and the Providence Washington Insurance Company, a corporation of Rhode Island — against the other marine insurance companies, or their assignees, corporations or citizens of Pennsylvania, New York, Rhode Island, and the kingdom of Great Britain, against the C., V. & C. Line and its receivers, citizens of New York, against the compress company, a Tennessee corporation, and three citizens of Tennessee, its trustees in a deed of trust given after the fire on certain reál estate to secure the beneficiaries therein named, which need be no further mentioned, and against the 44 fire insurance companies whose corporation domiciles have been already stated, home and foreign. The bill prays for general relief, and especially that a liability may be. declared against the C., V. & C. Line receivers upon their bills of lading, as if in favor of the owners who were holders thereof, respectively, and that on that right a judgment be had against these receivers; that this liability may be satisfied by the fire insurance fund collected, or that ought to have been collected, by the compress company, and by a decree for any deficit or breach of trust by the compress company under its contract, and recovery of judgments therefor against the fire companies, and against the. compress company; that the marine insurance companies paying'losses on their respective policies may be subrogated to these rights and remedies; and that they may be enforced as a trust in their favor. The Continental Insurance Company of New York, the Fire Association of New York, the National Fire Insurance Company of Connecticut, the Home Insurance .Company of Louisiana, and the Royal.

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Cite This Page — Counsel Stack

Bluebook (online)
50 F. 243, 1892 U.S. App. LEXIS 1715, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-co-of-north-america-v-delaware-mut-ins-circtwdtn-1892.