Case Name: GERMAN-AMERICAN INSURANCE CO. v. SOUTHERN RY.
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1907-08-03
Citations: 77 S.C. 467
Docket Number: 6611
Parties: GERMAN-AMERICAN INSURANCE CO. v. SOUTHERN RY.
Judges: Before Prince, J.,
Reporter: South Carolina Reports
Volume: 77
Pages: 467–478

Head Matter:
6611
GERMAN-AMERICAN INSURANCE CO. v. SOUTHERN RY.
Liability by Railroads fob Damages by Communicated Pibes. — Under an agreement, “this cotton is deposited on the premises of the Southern Railway Company and same remain upon the premises of the company without its consent at your sole risk until tendered and accepted for shipment,” the carrier is not liable under sec. 2135, Code 1902, for the destruction of the cotton by fire communicated by its locomotive, and enforcing the agreement is not against public policy.
Mr. Justice Gaby dissents.
Before Prince, J.,
Fairfield,
Fall Term, 1906.
Reversed.
Action by German-American Insurance Co., Royal Insurance Co. and Millett and Co. against Southern Ry. Co. From judgment for plaintiff, defendant appeals on following exceptions:
1. “That his Honor, the presiding Judge, erred in refusing the motion to direct a verdict in favor of the defendant, upon the ground that it appeared from the undisputed evidence in the case, that the property destroyed had been placed on the defendant’s right of way by Millett & Company, the owners, with knowledge that the defendant did not consent to its being so placed before it should be tendered for shipment, and that it was never so tendered.
2. “That his Honor, the presiding Judge, erred in refusing to direct a verdict for the defendant, for the reason that there was no testimony tending to show that the property which was destroyed while upon the defendant’s right of way had been placed on such right of way with its consent.
3. “That his Honor, the presiding Judge, erred in refusing to direct a verdict for the defendant for the reason that it appeared from the evidence that there was a misjoinder of parties plaintiff and of causes of action, the rights of the plaintiffs being several and not joint, the evidence could not sustain a verdict in favor of the defendants jointly.
4. “That his Honor, the presiding Judge, erred in refusing the defendant’s motion for a new trial, for the reason that there was no testimony tending to show that the cotton destroyed had been placed upon the defendant’s right of way with its consent.
5. “That his Honor, the presiding Judge, erred in refusing the defendant’s motion for a new trial, on the ground that the verdict being for a single sum in favor of the defendants joinly, was not supported by the evidence, which showed the rights of the plaintiffs to be several and not joint.
6. “That his Honor, the presiding Judge, erred in charging the jury, with reference to the cotton on the right of way: ‘Now, if you find it was there with the knowledge of the defendant company, then the inference, in the absence of other testimony, the inference might be drawn that it was there with the consent of the company; and that inference ariseseonly in those cases where the property of one is placed upon the lands of another, who has a right to object to its being there. But I charge you that a railway company has a right to object to the storing of cotton on its right of way that is not placed there for the purpose of shipment on the railroad.’ In that he thereby instructed the jury, in effect, that an inference of consent on the part of the company to the placing of property on its right of way arose from the fact, if shown by the evidence, that the property was placed upon such right of way with its knowledge, in the absence of any other testimony, and was a charge on the facts, in violation of section 26, article V, of the Constitution of this State; and said charge was in violation of the provisions of section 2135, volume I, Code of Laws of South Carolina, 1902, which required the plaintiff to affirmatively prove coiir sent on the part of the railway company to the placing of the property on its right of way.
7. “That his Honor, the presiding Judge, having charged the jury that ‘the Statute exempts the railroad company from liability for the destruction by fire of property placed upon its right of way without its consent, and recognizes the right of the company to withhold its consent when any property is placed thereon, and such consent must be affirmatively shown;’ erred in also charging the jury, that the inference that the company consented to the property being placed on its right of way arose, if the jury should find that it was placed there with the knowledge of the company, it having a right to object, in the absence of any other testimony. The charge being contradictory, and making proof of knowledge equivalent under the statute, to proof of consent.
8. “That his Honor, the presiding Judge, erred in construing the written notice, Exhibit E, introduced in evidence, and in charging the jury in reference thereto, as follows: ‘By this notice, the railway says it doesn’t consent. It is ’for you to say whether it did or not. It says the cotton is there at the risk of the owner. I charge you that if the railroad consented for that cotton to be there, the railroad couldn’t limit its liability under that statute. The question is, did the railroad company consent for it to be there ? If it consent for it to be there, it can’t say, I consented for it to be there, but it must be at your risk. I charge you that under that statute the railroad company can’t do that; and if the railroad company consented for it to be there, why then it was at the risk of the railroad if it burned it. Now, that is my interpretation of the law in connection with this notice that has been placed in evidence.’ Whereas, it is submitted, that the railroad company was under no obligation to permit property to be placed or to remain on its right of way, until it should be tendered for shipment; and could, in the exercise of its rights, attach to its permission that property be placed or remain on its right of way before being tendered for shipment, a valid condition that should be there without its consent, and at the risk of its owner until tendered for shipment.”
Messrs. B. L. Abney and W. H. Townsend, for appellant,
cite: Charge that an inference of consent arose from mere knowledge was contradictory to the charge that consent must be proved: 31 S. C., 461; 72 S. C., 97; 43 S. C., 613; 51 S. E., 183. Contracts allowing property'to be placed on right of way with a stipulation exempting from liability for damages by fire are valid: 175 U. S., 91; 95 Tex., 461; 115 Term., 402; 109 Cal., 86; 135 Mich., 210.
Mr. J. E. McDonald, contra,
cites: All parties having an interest in the subject matter of the suit should be joined as parties plaintiff: 76 S. C., 101; 41 S. C., 408. Carrier has an insurable interest in the cotton: 55 S. C., 504; 24 S. C., 366; 13 Ency., 419.
August 3, 1907.

Opinion:
The opinion of the Court was delivered by
Mr. Justice Jones.
The plaintiff insurance company seeks to be subrogated to the rights of Millett & Co. to recover under section 2135 of the Code. This statute makes every railroad corporation responsible in damages to the owner whose property may be injured by fire, communicated by its locomotive engines or originating within the limits of the right of way, in consequence of the act of its authorized agents or employees, except in any case where the property shall have been placed on the right of way of such corporation, unlawfully or without its consent. It was shown that the cotton of Millett & Co. was destroyed by fire, while on defendant's right of way, but not tendered for shipment, by a spark communicated from defendant's locomotive engine; but the vital question is, whether the cotton was on defendant's right of way by its consent, as contemplated by the statute.
The undisputed testimony was that Millett & Co. placed the cotton on defendant's right of way under an agreement, stipulating: "This cotton is deposited on the premises of the Southern Railway Company and the same remain upon the premises of this company without its consent and at your (Millett & Co.) sole risk, until tendered and accepted for shipment."
Now, it is contended that notwithstanding this express stipulation, the cotton was on defendant's right of way by its consent, before it was tendered for shipment. We cannot think so. Millett & Co. and those in privity with them, should be estopped to assert a fact which is contrary to their agreement, that until tendered for shipment the cotton remains upon the right of way without defendant's consent.
It is said that such an agreement is void on the ground of public policy. As it subserves a very high public policy to enforce contracts between parties sui juris, Courts should not nullify contracts as against public policy unless the case is free from all reasonable doubt. The rule is that, "a contract is not void as against public policy, unless it is injurious to the interest of the public or contravenes some established interest of society." What interest of the public is injuriously affected by the agreement in question ? Millett & Co. had no right as a member of the public to place cotton on defendant's premises, unless tendered for shipment, except by agreement with defendant, and defendant owed no duty to the public or to Millett & Co., to allow cotton to be placed on its right of way, except for shipment.
A different question would be present if Millett & Co. had the right as a member of the public to place cotton on defendant's right of way, independent of an agreement. The status of the cotton on the right of way being fixed by the agreement alone, must be determined by the agreement alone. If it be true that the cotton was on defendant's premises by its consent on condition, the owner cannot cling to the consent and repudiate the condition upon which it was given, for that would be like a consent obtained by fraud or deception which is no consent.
The authorities generally hold, that a contract by a railroad corporation is not against public policy, because it exempts from liability for fires, even negligently communicated by its agents or defective instrumentalities to property placed by the owner upon railroad premises, not as a patron dealing- with the company as a common carrier, but by virtue of the special agreement. Griswold v. Illinois Central R. R. Co., 90 Iowa, 265, 24 L. R. A., 647; Hartford R. Ins. Co. v. Chicago M. & St. P. R. Co. (C. C. A.), 30 L. R. A., 193, 20 Sup. Ct. Rep., 33, following the rule established by the State Court in the Griswold case. Stephens v. Southern Pacific Co. (Cal.), 29 L. R. A., 751, 50 Am. St. Rep., 17; Greenwich Ins. Co. v. Louisville Nashville R. R. Co. (Ky.), 56 L. R. A., 477; Osgood v. Central Vermont R. Co., 77 Vt., 334, 70 L. R. A., 930; Mann v. Pere Marquette R. Co., 135 Mich., 210, 97 N. W., 721. These cases combat the view that the public has an interest in the contract, because it tends to induce negligence in the equipment and operation of the locomotives.
The contract in this case is not to do an act prohibited by statute or which is contrary to the public policy as declared by a statute, but is the admission by both parties of a fact which takes the case out of the statute, viz: that the cotton was not upon the right of way with the consent of defendant until tendered for shipment.
Under the foregoing views if was error to refuse to direct a verdict for defendant and to refuse the motion for new trial.
The judgment of the Circuit Court is reversed.