Thе facts necessary to the determination of this motion appear to be the following:
While defendant was loading grain from the warehouse into one of its freight cars on or about April 8, 1943, a fire occurred and destroyed the warehouse. This fire, according to the plaintiffs, was occasioned by defendant’s employees setting fire to the grass on defendant’s right of way. The fire spread and the сrew which set the fire went to lunch without watching it or checking its course or protecting adjacent buildings from contact with it. It spread to the Cooperative’s warehouse and destroyed it. Plaintiffs, who were the insurers of the warehouse and its contents against fire, paid the Cooperative Exchange the loss it suffered from the fire. The Cooperative, in turn, transferred to plaintiffs all its rights against defendant, and plaintiffs now bring this action as subrogees to recover $16,-964.91 which they paid the insured for the loss suffered. Plaintiffs contend that the fire and the resulting loss was caused by defendant’s negligent care of a fire which its employees set near the warehouse.
Defendant seeks summary judgment upon the premise that paragraph 9 of the lease granted O’Neill, and subsequently assigned to the Northern Farmers Cooperative Exchange, contained the following provision: “9. Should the use, exercise, or enjoyment by the lessee of the lands, premises, or privileges hereby demised, or any part thereof, at any time or times hereafter be obstructed, interfered with or destroyed, or should any buildings, erections or improvements, or any goods, chattels, effects, or things, at any time or times, or by any persons, built, erected, brought, placed or being thereon, be in any manner damaged, injured or destroyed, whether by reason of or in consequence of any repairs, improvements, enlargements, or reconstruction of the lessor’s railway or of any works or facilities connected therewith, or on account of the operation, working or maintenance of the railway, the running of trains, or any other cause, matter or thing done, or omitted to be done, negligently or otherwise, by the lessor, or its agents, the lessee shall not by reason thereof have any claim оr demand against the lessor, or such agents, nor be entitled to any compensation or indemnity.”
Defendant contends that this provision is valid and operative, and relies upon Quirk Milling Co. v. Minneapolis & St. L. R. R. Co., 1906,
I. As plaintiffs claim, a common carrier and the owner of goods received by it as a common carrier cannot validly contract against liability arising from negligent acts committed against that property by the carrier. Quirk Milling Co. v. Minneapolis & St. L. R. R. Co., 1906,
The facts in the instant case seem to show clearly that defendant did not set the fire as a common carrier. According to plaintiffs, a grass fire set by defendant’s employees spread and set fire to the warehouse and grain in question. The crew which set the fire was not the one which was concerned with the loading of the car spotted adjacent to the warehouse.
As many courts have noted, a railroad’s activities are not all performed in a common carrier capacity. Former Chief Justice Hughes pointed out in Santa Fe, Prescott & Phoenix Ry. Co. v. Grant Bros. Const. Co., 1913,
In the instant case, defendant’s employees which “burned over” the property were engaged in maintenance work. That work is no different in рrinciple from repairing or improving the road. Both are concerned with the task of making the railroad usable and in keeping it in good physical shape. Consequently it seems that the employees which set the fire in question were not acting in defendant’s capacity as a common carrier in performing that work. Moreover, it cannot be successfully maintained that defendant is liable as a common carrier by reason оf alleged failure of the train crew to guard the warehouse and grain therein from the fire set by the maintenance crew. It may be urged that the complaint is sufficiently broad literally to encompass that theory of negligence. But no claim is made for any loss of grain which may have been in the car which was being loaded. Plaintiffs are seeking recovery for the loss of the warehouse and its contents. Obviously, the warehouse or its contеnts was not in the possession of the defendant as a common carrier for transportation. It is well settled that the liability of a common carrier as an insurer of goods does not arise until the goods have been delivered to it for transportation. 13 C.J.S. Carriers, § 145, p. 285. Until that time, the carrier is not a common carrier of such goods. 13 C.J.S., Carriers, § 142, p. 282. Any claim, therefore, by the plaintiffs on such a theory is plainly untenable.
II. Plaintiffs base their contentiоn that defendant contracted as a common carrier upon the premise that one of the provisions in the lease provided (paragraph 7) : “During the continuation of this lease, so far as the lessee can legally control the same, all freight shipped to or from the premises hereby demised, coming from or destined to any point reached by the less- or’s railway, or its connections, shall be routed for the greatest possible distance over the National Railway System.”
Plaintiffs claim that this provision proves that defendant contracted in its capacity as a common carrier. Assuming that such a situation would prevent defendant from contracting against its own negligence, it seems clear that defendant did not execute this contract in its role of common carrier. Nothing in the -instrument, except this paragraph, says anything about the transportation of goods. The rest of the instrument deals with the leasing of the property and the terms upon which it is leased. The mere fact that defendant sought to improve its business by these provisions in the lease does not make defendant’s contract one entered into in its capacity as a common carrier. Long ago the Iowa court held in Griswold v. Illinois Central R. Co.,
In view of these premises, therefore, it seems that plaintiffs cannot succeed in their argument that defendant contracted in its capacity as a common carrier when executing this lease.
III. The question as to whether the contract, as reflected in paragraph 9 of the lease, contravenes public policy and therefore is unenforcible, seems to have been set at rest by the decisions of this State. At thе outset, it must be concluded, as plaintiffs contend, that the warehouse was a public one at the time it was occupied under the lease by the Cooperative Exchange. True, O’Neill operated as a private warehouseman and the lease at its inception was a contract with a private warehouseman. But when the lease was assigned to the Cooperative Exchange, a new lease in effect wаs created, and from the showing herein it will be assumed that defendant knew, or should have known, that the Cooperative intended to operate as a public warehouse. The fact is that the Cooperative did operate as a public warehouse. Contracts against liability for negligent injury to property are invalid if they are prohibted by a statute or are in contravention of sound public policy. No statute is cited which рrohibits the present contract. Public policy is violated in such a provision when “the subject of the contract involves the public welfare or duties expressly imposed by law.” Commercial Union Assur. Co. v. Foley Bros.,
It seems very clear, therefore, that the-rights of the public are in no way limited, impaired or prejudiced by any of the provisions of the lease. At least, on the facts herein, the interest of the public or any duty of the warehouseman tо the public is in no way affected by the limitation of the rights which are imposed on the lessee. Merely because a warehouse is licensed as a public one does not mean that it stores grain owned by other persons. See State v. W. W. Cargill Co., 1899,
The Cooperative Exchange chose to enter into a private contract with the defendant. It understood that, in accepting that contract, it released thе lessor from any liability if the warehouse or its contents were destroyed by fire through the lessor’s negligence. It could have proceeded under the Minnesota Statutes of 1941, Chapter 230, and obtained a lease to the property according to statutory condemnation procedure. It seems, therefore, that it was fully able to protect itself from any onerous provisions in the lease if it was so inclined. No legal obligation rеsted upon the defendant to grant any lease or rights to the property in absence of statutory procedure. As stated by the Supreme Court in Baltimore & Ohio S. W. Ry. Co. v. Voight,
Plaintiffs have the burden of proving that paragraph 9 of the lease is contrary to public policy. On this motion, they have
IV. Lastly, it is the position of the plaintiffs that the entire contract is void because the consideration in part is illegal. In support of this position, reference is made to paragraph 7 of the lease which purports to require the lessee during the continuation thereof, so far as it can legally control the same, to route all freight shipped to and from the premises over the lines of the lessor. It is plaintiffs’ position that such provision violates the Interstate Commerce Act, 49 U.S.C.A. § 1 et seq., as well as the Elkins Act, 49 U.S.C.A. § 41 et sеq., which make it unlawful for any person to offer, grant, or give, or to solicit, accept, or receive, any rebate, concession, or discrimination in respect to the transportation of property in interstate commerce by common carrier whereby such property would be transported at a rate less than published tariffs. Certainly, it is clear that the defendant and a warehouseman could not enter into a contract which would give or result in giving the warehouseman a less rate for transporting its goods than the rates contained in defendant’s published tariffs. Such contracts could not be carried out either directly or indirectly. Union Pacific R. Co. v. United States,
The situation on this motion for summary judgment is to be differentiated from
Consequently, the shipper in the Blount case received rent-free property in consideration for transporting its merchandise over the lessor railroad, and hence clearly it received a bonus or benefit which the carrier could not confer on other shippers of like articles. Here, the plaintiffs have pointed out no concession or privilege accorded to the lessee as a shipper which was not accorded to every other shipper of like merchandise over the defendant’s lines. The record is barren of any showing that the lessee did not by its money rental pay full consideration for the rights accorded to it under the lease.
As to the question of the effect of paragraph 7 of the lease, plaintiffs have seen fit to submit the matter on the lease itself and the facts of which the Court may take judicial notice. No other showing regarding this issue is submitted by affidavit, pleading, or otherwise. Upon the record submitted, therefore, it would seem that the mere granting of this lease in no way runs afoul of the Interstate Commerce Act or the Elkins Act, and without more, the Court would not be justified in concluding that the lease is invalid.
The purpose of Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, is to dispose of cases in which there is no genuine issue of any material fact, even though an issue may be raised by the pleadings. Fletcher v. Krise,