Court Opinion

ID: 8591603
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:49:53.384577+00
Date Added: 2024-06-11T16:54:30.599187
License: Public Domain

Laramore, Judge,
dissenting:
I respectfully dissent for the following reasons: Plaintiff sues for the benefit of the Aetna Insurance Company, the insurer of the Overnite Transportation Company. I do not believe plaintiff can maintain this suit because there is no privity of interest or contractual relationship between the plaintiff and the insurer. The only subrogation is between the insurance company and the carrier.
The Aetna’s liability to the carrier was merely to pay the carrier for the liability which the carrier incurred to the shipper or consignee on account of the loss of the goods. Having paid the carrier, the insurance company became subrogated to the right of action the carrier might have had against any one whose negligence caused or contributed to the loss. No action of the Government or plaintiff caused or contributed to the loss of the goods, and the insurance company could not by right of subrogation maintain a suit against the United States.
The insurer is dependent for the maintenance of this suit upon the rights of the assured. Plaintiff in this case was not the assured and cannot maintain this suit. Phoenix Insurance Company v. Erie and Western Transportation Company, 117 U. S. 312.
The liability of the Aetna Insurance Company was only to the Overnite Transportation Company, and merely because the Overnite Transportation Company endorsed the Aetna check over to the plaintiff would not create a contract between plaintiff and Aetna such as to give rise this suit.
The tobacco products were delivered to the Overnite Transportation Company upon a bill of lading under which the plaintiff shipper retained no right in the products. Therefore, I believe plaintiff cannot maintain this suit either for itself or for the benefit of the insurer.
Furthermore, the majority opinion gives judgment to the plaintiff to do with what it may. Plaintiff is not out one cent by reason of the loss, and I can think of no reason why it should receive this “windfall.”
I would dismiss the petition.
*755FINDINGS OF FACT
The court, having considered the evidence, the report of Commissioner Richard H. Akers, and the briefs and argument of counsel, makes findings of fact as follows:
1. The plaintiff in case No. 683-58 is a Virginia corporation. At all times hereinafter mentioned, it was a manufacturer of tobacco products, including cigarettes and smoking tobacco, having a factory at Richmond, Virginia, which it operated for that purpose.
2. On December 3, 1951, pursuant, in most instances, to standing orders placed with it by twenty-one customers in North Carolina and Tennessee, the plaintiff withdrew from its warehouse in Richmond for consumption or sale 73,000 original, full and unbroken statutory packages of cigarettes manufactured by it, and 894 original, full and unbroken statutory packages of smoking tobacco manufactured by it, and delivered these packages of cigarettes and smoking tobacco to the Overnite Transportation Company, a common carrier, for shipment to these various customers.
Prior to the withdrawal of those tobacco products from its factory and their delivery to the Overnite Transportation Company, the plaintiff had duly affixed to such packages Federal Internal Revenue stamps, of series 121, of the value of $5,840 with respect to the cigarettes and $24.26 with respect to the smoking tobacco, that is, stamps in a total value of $5,864.26.
3. The Overnite Transportation Company issued and delivered to the plaintiff straight bills of lading covering the shipments consigned to the various purchasers. The plaintiff prepaid the freight charges and included these freight charges in the invoices to its customers as a part of the selling price of the products.
4. The total amount of each invoice included the prepaid freight, the value of the stamps affixed to each package as well as the plaintiff’s other costs and the profit on the sale, and such total amount was charged by the plaintiff to the account of each purchaser. Each purchaser had an open running account with the plaintiff. The invoices contained the following provisions:
*756Subject to a 2% cash discount if paid within 10 days from date of this invoice;
and
Transportation at purchaser’s risk.
The invoices were in the total amount of $11,562.24.
5. On the night of December 3,1951, during the course of the transportation of the tobacco products mentioned above, an accident occurred in which the truck containing such products ran off the road and over the railing of a bridge near Danville, Virginia, resulting in a fire which destroyed the truck and most of the tobacco products as well as the stamps affixed thereto. The tobacco products which were not burned were so completely water-soaked that they, as well as the stamps affixed thereto, were a complete loss and none of the tobacco cargo or the stamps was recovered.
6. Immediately after the accident, the Overnite Transportation Company, in accordance with the customary practice in the matter of such losses, notified the plaintiff of the destruction of the products in order that the plaintiff could duplicate the shipments and avoid inconveniencing its customers. Shortly thereafter, the New York office of the plaintiff received a teletype message from its Eichmond representative as follows :
Overnite Transportation Company advises the following orders were burned up in truck last night and suggest we duplicate the shipments and file claim.
The teletype message then listed the various customers involved as well as the quantity and character of each shipment. The plaintiff thereupon, in accordance with its customary procedure, made replacement shipments to each of these customers under the same conditions and in the same amounts as the original shipments, and charged these shipments to these customers at the same price as shown in the original invoices for the shipments which were destroyed.
7. On December 11, 1951, the plaintiff prepared invoices through which it charged the Overnite Transportation Company with the invoiced amounts of the various shipments which had been destroyed and, at the same time, *757issued credit vouchers through which it credited the various customers with the invoiced amounts of the original shipments which had been destroyed.
8. On or about December 11, 1951, the plaintiff prepared and forwarded to the Overnite Transportation Company claims for loss and damage covering the shipments of the tobacco products which were destroyed on December 3,1951, as described above. Such claims were in the amounts of the invoices to its customers for such products, which invoices, as described above, included prepaid freight as well as the cost of the stamps which were affixed to the packages. Invoices made out to Overnite Transportation Company for each shipment and in the same amount as each original invoice to the plaintiff’s customers, the original bills of lading, and bonds of indemnity accompanied the claims which were forwarded by the plaintiff to the Overnite Transportation Company.
9. The Overnite Transportation Company was insured against losses of the nature involved in this proceeding under a continuing insurance policy with the Aetna Insurance Company. On January 31, 1952, the Aetna Insurance Company issued twenty-one checks in the total amount of $11,479.82 made payable to “Overnite Transportation Company and Philip Morris & Company, Ltd., Inc.”, such checks being in the amounts of the respective invoices less the amount of the prepaid freight. After the receipt of the checks, the Overnite Transportation Company endorsed them and transmitted them to the plaintiff with its own check in the amount of $82.42, which latter amount represented the prepaid freight charges which had been included in the invoices but were not paid by the Aetna Insurance Company. With these checks, the plaintiff has been paid in full for the sale price of the tobacco products, including the value of stamps affixed thereto, which were shipped on December 3, 1951, and lost in the accident on that date, as described in these findings. The insurance adjuster had no contact or correspondence with the plaintiff or its consignees of the products in question prior to the settlement and payment of the claims in question.
*758The policy of the Overnite Transportation Company with the Aetna Insurance Company referred to above contained the following provision:
SubROgatioN. (8) This Company shall, on payment of any claim hereunder, be subrogated to the extent of such payment to all rights of recovery by the Assured against any person or corporation, and as a further assurance the Assured shall assign all such rights of action to the Company or its nominee; and permit suit to be brought in the Assured’s name, but at this Company’s expense, and through such counsel as the Company may designate, and the Assured further agrees to render all' reasonable assistance in the prosecution of said suit or suits.
10. On October 29,1952, the plaintiff duly filed a claim for refund or redemption of the stamps in the sum of $5,864.26, which had been destroyed as set out above, and on November 18, 1953, the defendant rejected that claim in full.
11. The plaintiff in case No. 684 — 53 is a New Jersey corporation. At all times hereinafter mentioned, it was a manufacturer of tobacco products, including cigars and cigarettes, having a factory at Richmond, Virginia, which it operated for that purpose.
12. On December 3, 1951, pursuant to a standing order from Bennett Lewallen Company, of Winston-Salem, North Carolina, the plaintiff withdrew from its warehouses in Richmond, Virginia, for consumption or sale, original, full and unbroken statutory packages containing 40,000 cigarettes manufactured by it, and delivered these cigarettes to the Overnite Transportation Company, a common carrier, for shipment to Bennett Lewallen Company.
13. On December 3,1951, pursuant to a standing order from Piedmont Cigar Company, of High Point, North Carolina, the plaintiff withdrew from its warehouse in Richmond, Virginia, for consumption or sale, original, full and unbroken statutory packages containing 20,000 cigars manufactured by it, and delivered these cigars to the Overnite Transportation Company, a common carrier, for shipment to Piedmont Cigar Company.
14. At or shortly prior to the withdrawal of those tobacco products from its factory and their delivery to the Overnite *759Transportation Company, the plaintiff had duly affixed to the packages of cigarettes Federal Internal Revenue stamps of series 121 of the value of $160; to the packages containing 5,000 cigars involved in this action Federal Internal Revenue stamps, class C, series 121, of the value of $20; and to the packages containing 15,000 cigars involved in this action Federal Internal Revenue stamps, class C, series 121, of the value of $150, making a total value for the stamps affixed to the packages of cigars and cigarettes of $380.
15. The Overnite Transportation Company issued and delivered to the plaintiff straight hills of lading covering the shipments consigned to the purchasers. The plaintiff prepaid the freight charges and included these freight charges in the invoices to its customers as a part of the selling price of the products.
16. The total amount of each invoice, including freight charges and value of stamps, was charged by the plaintiff to the account of each purchaser, such invoices being in the following amounts:
Bennett Lewallen Company_ $308.38
Piedmont Cigar Company_1,183. 60
Each purchaser had an open running account with the plaintiff. The invoices contained the following provisions:
Terhs Cash : We allow a discount of 2% for cash in 10 days from date of invoice payable * * * to the order of P. Lorillard Company, Inc. * * * Goods sold on the express condition that transportation is at purchaser’s risk.
17.On the night of December 3,1951, during the course of the transportation of the tobacco products mentioned above, an accident occurred in which the truck containing such products ran off the road and over the failing of a bridge near Danville, Virginia, resulting in a fire which destroyed the truck and most of the tobacco products as well as the stamps affixed thereto. The tobacco products which were not burned were so completely water-soaked that they, as well as the stamps affixed thereto, were a complete loss and none of the tobacco cargo or the stamps was recovered.
*76018. Immediately after the accident, the Overnite Transportation Company, in accordance with the customary practice in the matter of such losses, notified the plaintiff of the destruction of the products in order that the plaintiff could duplicate the shipments and avoid inconveniencing its customers.
19. On December 5, 1951, the plaintiff, in accordance with its customary procedure, made a shipment to Bennett Lewal-len Company, of Winston-Salem, to replace the shipment of December 8,1951, which had been destroyed, and charged the account of Eli Witt Cigar Company (the owner of Bennett Lewallen Company branch) with the same amount as the original shipment, that is $308.38, and under the same terms and conditions as the original shipment.
20. On December 10,1951, the plaintiff, in accordance with its customary procedure, made a shipment to Piedmont Cigar Company to replace the shipment which had been destroyed on December 3,1951, and charged the account of Piedmont Cigar Company with the same amount as in the case of the original shipment, that is $1,183.60, and under the same terms and conditions as the original shipment.
21. On December 14, 1951, the plaintiff charged the Over-nite Transportation Company with the invoiced amounts of the two shipments which had been destroyed and, at the same time, made corresponding credits to the two customers, that is, $308.38 in favor of Bennett Lewallen Company and $1,183.60 in favor of Piedmont Cigar Company.
22. The plaintiff prepared and forwarded to the Overnite Transportation Company claims for loss and damage covering the shipments of the tobacco products which were destroyed in the accident on December 3, 1951. Such claims were in the amount of the invoices to its customers for such products, which invoices included prepaid freight as well as cost of the stamps which were affixed to the packages, that is, in the total amount of $1,491.98. The original invoices and bills of lading accompanied the claims when they were forwarded by the plaintiff to the Overnite Transportation Company.
*76123. The Overnite Transportation Company was insured against losses of the nature involved in this proceeding under a continuing insurance policy with the Aetna Insurance Company. On January 31,1952, the Aetna Insurance Company issued one check to “Overnite Transportation Company and P. Lorillard Company, Inc.” in the amount of $1,175.64 on account of the loss of the shipment to the Piedmont Cigar Company, and another check payable in the same manner in the amount of $306.83 on account of the shipment to Bennett Lewallen Company. After the receipt of the checks, the Overnite Transportation Company endorsed them and transmitted them to the plaintiff with its own check in the amount of $9.51, which latter amount represented the prepaid freight charges which had been included in the invoices but were not paid by the Aetna Insurance Company. With these checks, the plaintiff has been paid in full for the sale price of the tobacco products (including the value of stamps affixed thereto) which were shipped on December 3,1951, and lost in the accident on that date as described in the preceding findings. The insurance adjuster had no contact or correspondence with the plaintiff or its consignees of the products in question prior to the settlement and payment of the claims in question.
The policy of the Overnite Transportation Company with the Aetna Insurance Company referred to above contained the following provision:
Subrogation. (8) This Company shall, on payment of any claim hereunder, be subrogated to the extent of such payment to all rights of recovery by the Assured against any person or corporation, and as a further assurance the Assured shall assign all such rights of action to the Company or its nominee; and permit suit to be brought in the Assured’s name, but at this Company’s expense, and through such counsel as the Company may designate, and the Assured further agrees to render all reasonable assistance in the prosecution of said suit or suits.
24. On October 29,1952, the plaintiff duly filed a claim for refund or redemption of the stamps in the sum of $330, which had been destroyed as set out above, and on November 18, 1953, the defendant rejected that claim in full.
*762CONCLUSION OF LAW
Upon the foregoing findings of fact, which are made a part of the judgments herein, the court concludes as a matter of law that the plaintiffs are entitled to recover, and it is therefore adjudged and ordered that they recover of and from the United States Five Thousand Eight Hundred and Sixty-four Dollars and Twenty-six Cents ($5,864.26) in case No. 688-53, and Three Hundred and Thirty Dollars ($330) in case No. 684-53, each with interest as provided by law.