Case ID: ny-st-rep_13/html/0660-01.html
Source: Caselaw Access Project
Author: {"author": "Earl, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Clayton Platt, App’lt, v. The Richmond, York River and Chesapeake R. R. Co., Resp’t.
    
      (Court of Appeals,
    
    
      Filed February 10, 1888.)
    
    1. Common carrier—Bills of lading—Conflict of laws—When laws-OF A STATE NOT BINDING OUT OF THE STATE.
    A statute of South Carolina provides as follows. “No public notice or declaration or special contract shall limit or in any wise affect the liability at common law of any railroad company within this state for or in respect of any goods to be carried or conveyed by them, but such railroad company shall be liable at common law to answer for the loss or injury to any articles or goods to be carried by them.” Certain cotton was received by the defendant (a corporation organized under the laws of the state of Virginia, and wholly operated within that state) for transportation by it under bills of lading exempting it from liability from loss by fire not caused by its negligence. The cotton was destroyed by fire, but not through any fault or negligence chargeable to it. There was no proof that the contracts for the shipment of the cotton were made in the state of South Carolina or that any of the bills of lading were issued there or that any of the cotton was shipped from that state. Held, that the statute could, have no effect in this case.
    2. Same—Construction of law of South Carolina.
    
      Held, that there was nothing in said statute which prohibited the making of a contract in the state of South Carolina which could operate to limit the liability of the defendant as to goods delivered to it in the state of Virginia to be transported over its road in that state.
    3. Same—Contract entitling carrier to benefit of insurance.
    The bills of lading in question also contained a stipulation that in case of any loss or damage to the cotton during the transportation thereof, whereby any legal liability should be incurred by the defendant, it should have the benefit of any insurance which might have been effected on account of the cotton The cotton was destroyed by fire. Held, that the defendant was entitled to the benefit of the insurance; that payment by the insurance company to the owners, of the full amount of their loss discharged the defendant from all liability.
    Appeal from a judgment of the general term of the superior court of New York city affirming a judgment in favor of the defendant, entered upon a verdict directed by the court at the trial term.
    
      Nathaniel A. Prentiss, for app’lt; Wm. Allen Butler, for resp’t.
   Earl, J.

This action was brought by the plaintiff' against the defendant as a common carrier to recover for the loss of sixty-five bales of - cotton delivered to it and alleged to have been destroyed and lost through its gross negligence and fault while in its possession. The answer of the defendant, besides denying any negligence on its part, alleges that the cotton was received for transportation by it under bills of lading exempting it from all liability from loss by fire not caused by its negligence, and that the-cotton was not lost or-destroyed through any fault or negligence chargeable to it. The answer also alleged that the bills of lading contained a stipulation that in case of any loss or damage to the cotton during the transportation thereof, whereby any legal liability should be incurred by the defendant, it should have the benefit of any insurance which might have been effected on account of the cotton, and that before the happening of the loss in question, insurance had been effected on account of the cotton, and that the amount of the loss or damage thereto was paid wholly or in part by the insurers to the owners of the cotton, whereby all claim and demand against the defendant for the cause of action alleged in the complaint was discharged and extinguished.

We think the action was well defended at the trial. There was sufficient evidence that bills of lading were issued by the carrier for this cotton which contained the stipulations set up in the answer. The'bills were proved and put in evidence by the plaintiff, and there was no claim at the trial that they were not sufficiently proved, or that they were not delivered so as to become operative between the parties. It was assumed at the trial that the cotton was carried under the bills of lading put in evidence; and if the plaintiff desired to claim that they were issued under such circumstances that the owners were not bound by the stipulations therein contained, he should have proved the circumstances under which they were issued. As to eleven bales of the cotton, the original bill of lading was not produced; but without any objection a copy thereof was put in evidence which contained the same stipulations as the other bills of lading, and that copy was taken and assumed to be sufficient proof of the original. Therefore the bills of lading having been sufficiently proved, and it having been shown that the cotton was destroyed by fire, the burden was upon the plaintiff to establish that the fire was occasioned and the cotton destroyed by the fraud or gross negligence of the defendant. Lamb v. C. & A. R. R. Co., 46 N. Y., 271; Cochran v. Dinsmore, 49 id., 249; Germania Ins. Co. v. M. & C. R. R. Co., 72 id., 90.

We have carefully considered the evidence, and we do not think there is any which would have authorized the jury to find that the fire occurred through the fraud or gross negligence of the defendant, and there was therefore no error on the part of the trial judge in refusing to submit the question of negligence to the jury.

There is a statute of South Carolina which provides as follows: “Ho public notice or declaration or special contract shall limit or in any wise affect the liability at common law of any railroad company within this state for or in respect of any goods to be carried or conveyed by them, but such railroad company shall be liable as at common law to answer for the loss of, or injury to any articles or goods to be carried by them, any public notice of declaration or special contract by them made or given contrary thereto or in any wise limiting such liability notwithstanding.”

There was no proof that either of the contracts for the shipment of this cotton was made in the state of South Carolina, or that any of the bills of lading were issued there, or that any of the cotton vs as shipped from that state, and therefore the statute can have no effect in this case; But even if the contract had been made in that state for the shipment of this cotton and the cotton had been shipped from that state, yet the statute could hay e no effect in this case for the reason that by its terms it was applicable only to any railroad company within that state. A valid contract could be made there to limit the liability of a railroad company in some other state. This defendant was a corporation organized under the laws of the state of Virginia, and was wholly operated within that state, and there is nothing in the statute of South Carolina which prohibits the making of a contract in that state which could operate to limit the liability of the defendant as to goods delivered to it in the state of Virginia to be transported over its road in that state. There is therefore in this case nothing to impair the effect of the clause in the bills of lading which exempts the defendant from loss by fire.

But there is a still further ground of defense to this action. The owners of this cotton insured it in the Insurance Company of North America for the full value thereof, and after its destruction by fire, the insurance company paid the full amount of the loss to the owners. Thereafter the owners assigned their claim against the defendant to the insurance company and it assigned the same to this plaintiff. By a special stipulation in these bills of lading, which is set up in the answer, the defendant was entitled to the benefit of that insurance, and payment by the insurance company to the owners of the full amount ox their loss discharged the defendant from all liability.

It is true that by a general rule of equity where goods are totally lost by perils insured against, the insurer upon payment of the loss becomes subrogated to all the assured’s rights of action against third persons who have caused or are responsible for the loss; and the insurer has this right of subrogation without any express stipulation to that effect in the policy. It grows out of the very nature of the contract of insurance as a contract of indemnity. Conn. Fire Ins. Co. v. Erie R. R. Co., 73 N. Y., 399; Phœnix Ins. Co. v. Erie and Western Trans. Co., 117 U. S., 312. But this right of subrogation is a derivative one and comes solely from the assured, and can only be enforced in his right. If the assured has no right which he can transfer to the insurer, then the insurer can have no subrogation, and cannot take the place of the assured for the purpose of enforcing the liability of the wrong-doer for the loss. Here by the express contract between the assured owners and the railroad company it was to have the benefit of the insurance, and thus it was entitled to the insurance for its indemnity; and when the insurance company paid the entire loss sustained by the fire to the assured, by the very terms of the contract it relieved the defendant of any liability therefor. If the insurance company had not paid the loss to the assured, upon payment of the loss by the defendant, it would have been entitled to be subrogated to the rights of the assured, and to the full benefit of the policy which the assured had taken.

A further discussion of this point is unnecessary as it is fully covered by the decision in the Phœnix Ins. Co. v. Erie and Western R. R. Co. (supra), where the precise question was involved.

Upon both grounds, therefore, we think this judgment should be affirmed.

All concur.