50 F. 243 | U.S. Circuit Court for the District of Western Tennessee | 1892
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
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
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. Insurance Company and the London, Liverpool & Globe Insurance Company.of the kingdom of Great Britain filed a petition to remove the cause , to this .court, and the cause is now heard upon the plaintiffs’ motion to remand, for want of jurisdiction.
Next in the upbuilding of this lawsuit stands the controversy — scarcely, if at all, less fundamental than that just mentioned — arising out of the claim of the marine insurance companies that the fire insurance companies, 44 in number, having policies on the burned cotton aggregating §301,750, shall pay so much of the sum, already estimated in previous litigation to he 8210,224.37, as pertains to the bills of lading issued by the 15., V. <fc C. line, to them, in discharge of their aforesaid claim for damages against the C., V. & 0. Lino upon its aforesaid bills of lading, thereby indemnifying the aforesaid carrier against such damages, which it is averred are covered by the policies of the fire companies, and thus enforcing the claim of the marine insurance companies for exoneration by subrogation to the rights of the owners as against the carrier.
Next in the orderly construction of the suit, but not in importance, is the claim that the compress company, having collected certain parts of the insurance held by it, has misappropriated to other losers $4,394.12 - of these collections, which should have gone to the C., Y. & 0. Line ou account of cotton covered b.y its bills of lading. This is charged as a' breach of trust.
Next, the bill claims that there has been another breach of trust in' failing to perform its duty by the compress company to collect the fire-policies held by it, and-this is set up as a cause of action against-the corn-
This is an analysis of the suit sufficient for the determination of the motion to remand for want of. jurisdiction. Now, it is obvious, as before, that the liability of the fire insurance companies, however it arises, or however it is to be enforced, whether at law or in equity, whether directly or indirectly, through other agencies in favor of the marine insurance companies, is not a joint one, to be enforced against the fire companies en bloc; and no pleading, however complicated, can deprive these controversies against each and every fire company, by each and every marine company, of their separate existence, in the sense of our removal acts of congress. It is a mere matter of mathematical calculation, upon the proof, either at law or in equity, however expensive or costly such a controversy might become when enforced by separate suits at law or in equity, to ascertain what each fire company may owe to each marine company upon the policies held by it, or to which it may be entitled by any equitable right of substitution, subrogation, exoneration, or what not. The mere factitious circumstances that there were some 14,000 bales of cotton covered by some 52 policies of fire insurance, in some 44 different companies, belonging to some 13 of our states and 1 foreign kingdom, burned in one shed, or that this fire insurance was procured by one agent in pursuance of a contract to so procure it, or that that contract was made with one carrier, through whose contract right the marine companies all held their alleged equity of subrogation, do not at all affect the separable character or quality of these controversies from each other; nor does the fact that there are some dozen or more marine companies claiming this quality of subrogation, and consequent exoneration, through one carrier, and that carrier’s one agent for procuring the fire insurance, make the. claims of the marine companies a joint one in any sense; certainly not in the sense of our removal acts of congress, either against the fire companies, that one carrier, or that one agent. This question of joint and separable controversy never depends upon such similarity of action, no matter how complete the similarity, but always upon the quality of being joint or identical in estate or interest, or a common and joint source of the title for the same, as arising out of a joint contract or the like. It is altogether true that if the obligation sued for be joint and several, and the plaintiffs sue jointly, either in the unity of their own interest joining themselves on the record, or in the unity of the defendant’s liability joining them on the record, the defendants, the cases have settled, may not lay hold of the
To illustrate the position here taken, let us consider this case in its relation to the defendant the National Fire Insurance Company of Connecticut, one of the petitioners for removal. It has a policy, Ño. 1,828, for $5,000, covering this loss, in general terms, “on all cotton in bales received by them as agents for the benefit of railroads, transportation line, or owners in boundaries of tho Merchants’ Cotton-Press & Storage Company.” That is to say, tho whole 14,000 bales burned were covered. Fortunately lor all concerned, the mode of doing business was to fix the value of the cotton at so much per bale, inferentially, from the proof contained in the exhibits and bill, at $50 per bale, or invoice cost and 10 per cent., and this was an insurance of 100 bales of the 14,000. Now, if there had been designated a specific lot of 100 bales, surely the controversy over it would have been none the less separable than it is, albeit there are more “railroads, transportation lines, and owners” than one interested in this $5,000, each exactly equal, according to his pro rata of the whole number of bales. Indeed, the exact share of the C., V. &C. Line in the $301,750 of fire insurance has been already ascertained in other suits to which it was not a party, — and which it seems, by the way, got along very well without it, and perhaps without some of the fire companies here named as defendants not being before the court, — to have been 85⅛ por cent, of the value of the cotton covered by its bills
Returning now, however, to the supposition of a necessity for going to Connecticut, for want of process here, (¡an there be any doubt that the C., V. & C. Line or its receivers could sue the Connecticut corporation for its per centum of the $5,000 due upon its policy, without the presence of the other parties, assuming and admitting its own liability upon its bills of lading to the owners of the cotton for damages for not delivering it? Possibly it might bring this suit at law in its own name upon the now well-settled principle that a third party may so sue upon a contract made by others for its benefit. Certainly it could sue at law in the name of the compress company for its use; or failing in that, upon the very allegations, of this bill of a desertion of its trust by that company, a conspiracy, and a refusal to suo or otherwise collect the amount, the 0., V. & 0. Line, or its receivers, could go into equity, admit its liability on the bills of lading, and recover. That is precisely what has been done by the pleadings in this case, taking the cross-bill of the C., V. & 0. Line and its receivers, as one may do, along with the original bill. 1 mean that cross-bill filed by them on the same date, and by the same solicitors, as the original bill, and not the cross-bill filed by them by another solicitor at a later date, and after the petition for removal was filed, to which we cannot look, however, because it is well settled that this question must he settled according to the situation and conditions existing at the time of filing the petition for removal. Taking the original hill and the cross-bill then on the record together, and arranging the parties as wo may, and doing this with perfect technical conformity to the two pleadings, and we have the plaintiff's Pennsylvania, New York, and Rhode Island corporations, and along-side them wo pla.ee the (’., V. & 0. Line, an Illinois corporation, if all sue that- way, and disregard the fact, subsequently developed by an amended bill and cross-bill filed after the removal petition, that, there is no such corporation, that supposition of the pleadings being a mistake, and the receivers, Thomas and Tracy, citizens of Now York. Ho, on the plaintiff's’ side we place all the oilier marine companies in whose behalf the bill is, in terms, filed by the plaintiffs, although some of them have been placed on this record upon the defendants’ side thereof. That this arrangement does no violence to, but is in conformity to, the pleadings, is manifest. The marine companies all have similar — not joint, however, in any sense, as we ruled in the outset — ini crests and rights as against this Connecticut fire company; the receivers or their line have the same, admitting their own liability, as they do, by the cross-bill; and referring to the amended bill and cross-bill filed ¡September 22, 1891, after the removal petition, for the mere purpose of arrangement, we find that technically those receivers are so associated as plaintiffs, the original and cross bills being
It matters not that in this bill and cross-bill there are other controversies; that, for instance, between the marine companies by substitution to rights of owners and consignees, all left out, bj’’ the way, as parties, although the bills of lading were in their names, and they are technically parties to the carriage contract, as against the C., V. & C. Line or its receivers, as to whether the carrier is liable for non-delivery of that cotton, or is exempt from such liability by stipulations in the bill of lading against fire losses. This Connecticut company has no connection or concern in that controversy by reason of any joint liability; not the least. It may be interested in defeating the claim, for then, possibly, the C., Y. & C. Line would have no claim against it, or only one to the extent of loss of freights; but that interest is purely incidental, and does not, in the sense of our removal acts, inseparably connect them as parties to this suit in its relation to that controversy; nor, for another instance, is this Connecticut Fire Company in such an inseparable sense connected with the controversy in this bill and cross-bill between the C.,, Y. & C. Line receivers and the marine companies, one. or both, suing jointly or separately, against the compress company for any breach of its trust under its contract to keep the cotton fully insured; nor that concerning the alleged misappropriation of insurance funds collected, as to which, if it had paid any part of that collection, its only interest is to see that such part is duly credited when judgment comes to be entered against it; nor that concerning the alleged neglect to collect of the fire companies, as to which it had no interest whatever except to profit by the neglect, if it may not yet be compelled to pay; nor yet again with that concerning the alleged neglect to keep fully insured all the cotton covered by the C., V. & C. Line’s bills of lading; nor still again with that concerning the foreclosure of the deed of trust upon real estate. None of these concern the liability of the Connecticut company.
If we look to the C., V. & C. Line receivers’ cross-bill, filed since the petition for removal, in which it vigorously denies its liability as carrier, and claims that the loss was exempt under the stipulations of its bills of lading, and does not admit the liability, as formerly it did in the other
But apart from all this, there is still another, and to my mind more conclusive, ground for our jurisdiction. The joining together of 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 Rhode Island corporation, throe only of the marine companies, as plaintiffs, is entirely artificial and arbitrary. Nothing in the record, or in the nature of the litigation as disclosed by the record, unites them any more than it unites all the other marine companies, some five or six or more of which are made defendants. We have shown that there was no joint right in them, and the splitting made by the pleading shows that they might occupy either side of a bill filed by either one of them, which is also apparent from the very nature of the case. Indeed, any one of these “marine” companies might have filed this bill solely or in behalf of all the others, as these three plaintiffs have done; and if so filed, unless there was some special reason, the others perhaps need not become full parties at all, but in the end, when the accounting should come, would be admitted by petition, or without even that formality, in modern practice, to file and prove their respective claims, and receive their respective shares; or, if need be, by petition to become full parties defendant, and by just such cross-bills as the defendants the Delaware Mutual Company, Doming & Co., and the receivers, Thomas and Tracy, have filed, set up any special claims they might have, and frame any special litigation they might wish. Now, it is plainly to be seen that if the leading plaintiff, the Insurance Company of North America, a Pennsylvania corporation, had alone filed such a bill, there would have been no difficulty about the federal jurisdiction by removal, upon the petition of this Connecticut corporation in this case, provided, of course, that we are right here in holding that there is no joint liability of the defendants, and no joint right of action in the plaintiffs, and the separable character of the controversy with it would be easily apparent. It would be none the less “a representative” suit, as urged by counsel, then than now; and that arrangement is, in my judgment, the most rational and technical that could have been adopted. Adopting it now, and arranging the parties in that way, as wo may, our jurisdiction is complete, upon the theory of this opinion as to the nature of the controversy. Certainly the pleader cannot, by the association he has selected to display a Pennsylvania, a New York, and a Rhode Island party, on either side the record, obscure or defeat our jurisdiction, especially when those defendants he has put upon that side are contemporaneously, by their cross-bills, seeking the same relief the other plaintiffs seek, as against this Connecticut corporation. Neither are these fire companies, defendants, in any sense garnishees, and therefore-nominal parties, without the
It is also urged that the Newport News & Mississippi Valley Company, a corporation of Connecticut, doing a railroading business in Tennessee, is a party, and therefore we have no jurisdiction. This com pany was not a parly to the original bill at all. If was made so by an amendment filed after the petition for removal, but we need not consider that. It was made a defendant, to the cross-bills of the C., V. & C. Lino receivers, and of Leming & Co., filed contemporaneously with the original bill. .But technically new parties cannot be brought in by a cross-bill which is confined to the parties to the original bill, strictly to the plaintiffs only, perhaps, hut, by enlargement of practice, co-defendants may be made parties to a cross-bill also. So that in fact, as we must look at the record, the Newport Nows & Mississippi Valley Company is nota party. But, waiving that, it is well settled that a controversy between co-defendants, belonging to the same state, does not defeat such a jurisdiction as we have by the arrangement of parties last suggested. This is all that need be said on this point, but, looking to the character of the claim against this company, it appears that it issued no bill of lading, and liad no contract right with any of the owners of this cotton here involved. As to 948 hales of the cotton, it is alleged that, after the C., V. & C. Line receivers had issued their bills of lading, there was an agreement between them and the Newport News & Mississippi Valley Company that this last company should take the cotton to Cairo. That was their affair, and, while it may complicate this lawsuit by adding another perplexity to it, it does not make the Newport News & Mississippi Valley Company an indispensable party.
We come now to a case arranged with the second of the plaintiff companies, the Atlantic Mutual of New York, as the sole plaintiff. Here
Now, we come to the New York defendant fire companies, two of them asking for removal. If alone they could not have it, the Connecticut removal has brought them along; but I think their own removal is good as against the leading plaintiff, the Insurance Company of North America, a Pennsylvania corporation, and that is sufficient. As against the plaintiff the Atlantic Mutual of New York, of course we could not have jurisdiction over any controversy with these New York removing defendants, but, united with other controversies of other removing defendants of which wo have equity jurisdiction, we have it over these also. The Louisiana corporation asking removal has a complete right. It is said the suit has been dismissed as to it, hut there is no'such order in the record, and the amended hill asking to dismiss was not filed till after the removal, and it is well settled that no change of parties, after petition filed, can affect the right of removal. As to the alien corporations asking removal, we need not decide, since the others will bring it along; but I wish to reserve my own opinion about the act of 1887 in its relation to aliens seeking to remove a suit in which there is a separable controversy between citizens of different slates. The decision of the supreme court of the United States, cited by counsel, was under the act of 1875, and, while Mr. District Judge FosteR adopts it as to the act of 1887, the language and structure of that act are peculiar, and it says, in so many words, that either one or more of the defendants actually interested in such controversy may remove said suit. King v. Cornell, 106 U. S. 398, 1 Sup. Ct. Rep. 312; Woodrum v. Clay, 33 Fed. Rep. 897.
Now, if an alien wore actually interested in the controversy, why does not this language entitle him to remove? It has been decided that it does authorize a citizen of the same state in which the suit is brought, otherwise excluded from the benefits of the act, to remove it; and why not any defendant, even an alien? Stanbrough v. Cook, 38 Fed. Rep. 369. The test is actual interest in the separable controversy. But this we need not and do not decide now, for the reasons stated. It will be observed that we have placed this case within the category of those to which the leading case of Barney v. Latham, 103 U. S. 205, belongs, and have endeavored to show that it does not belong to the category of Graves v. Corbin, 132 U. S. 571, 10 Sup. Ct. Rep. 196. And we need cite none other of the numerous decisions. On the distinctions between those two, the right of removal depends. These are the cases typical of the principle upon which all must depend. Mr. District Judge Shiras, in Stanbrough v. Cook, 38 Fed. Rep. 369, has instructively stated the test