Phoenix Ins. Co. vs. E. & W. Trans. Co,

portation service from the point of shipment to the inland points named, and provided that only that carrier should be liable for loss in whose actual custody the grain might be at the time of loss: Held, that in the case of loss while the grain was in the course of water transit, the court of admiralty had jurisdiction of an action against the propeller company. 3. RIGHT OF CARRIER TO BENEFIT OF INSURANCE.-A common carrier may, by contract with the shipper of goods, secure to itself, in case of any damage or loss to the goods, for which the carrier is liable, the benefit of any insurance to be effected by the shippers.

4. In such case the payment of a loss by the insurer to the shippers does not give the former any right of action against the carrier.

5. EFFECT OF STIPULATION AS TO INSURANCE-NEGLIGENCE.—It was stipulated in bills of lading that the carrier should not be liable for loss by perils of navigation, and that in case of loss for which the carrier should be liable, he should have the benefit of insurance effected by the insurers. A loss occurred, the proximate cause of which was a peril of navigation, but the remote cause was the negligence of the carrier. The insurer having paid the loss to the shippers, it was held he was not subrogated to their rights against the carrier and could maintain no action against the latter.

This was a libel to recover for the loss of certain shipments of grain delivered on board the propeller Merchant, July 24, 1874, at Chicago, to be transported, so far as it was to be carried on the lakes, to Erie, Pennsylvania.

At the time stated, libellant was a corporation of the state of New York, authorized to transact a general lake and inland insurance business. Respondent was a corporation of the state of Pennsylvania, authorized to carry on the business of lake transportation, and was the proprietor of a line of propellers running between Erie and lake ports, designated as the "Anchor Line," one of which boats was the propeller Merchant.

On said 24th day of July, 1874, the Merchant received on board, at Chicago, 16,325.34 bushels of corn, consigned to A. M. Wright & Co.; 800 bushels of corn, consigned to Elmendorf & Co., and 689.02 bushels of oats and 370.30 bushels of corn, consigned to Gilbert Wolcott & Co. Bills of lading were issued for and on account of these several shipments, the parts of which acknowledging receipt of the grain, were as follows:

Phoenix Ins. Co. vs. E. & W. Trans. Co.

Received, Chicago, July 24, of A. M. Wright & Co., the following packages (contents unknown), in apparent good condition, 16,325.34 bushels corn; order A. M. Wright & Co., Liverpool, Eng. Notify American Steamship Co., Philadelphia, Pa. Pro. Merchant.

Received, Chicago, July 24, 1874, of Elmendorf & Co., the following packages (contents unknown), in apparent good condition, 400 bushels corn; order Elmendorf & Co. Notify Abm. Whitenack, Bound Brook, N. J.; 400 bushels corn, order same. Notify same. Notify Wilkinson, Geddes & Co., Newark, N. J.

Received, Chicago, July 24, 1874, of Gilbert Wolcott & Co., the following packages (contents unknown), in apparent good condition, 689.02 bushels white oats, 370.30 bushels No. 2 corn; order Gilbert Wolcott & Co. Notify Louis Buehler, Tamaqua, Pa. Pro. Merchant.

Material parts of the heading of these bills of lading were as follows:

Anchor Line; Lake and Rail via Erie and the Anchor Line Steamers from all Lake Michigan ports. The Erie & Western Transportation Company is the proprietor of the "Anchor Line," which issues this bill of lading, and is a corporation of the state of Pennsylvania, having a real capital. The "Anchor Line" is the authorized and exclusive agent of the Pennsylvania Railroad Co., for its lake business via the Philadelphia & Erie Railroad and connections. It offers to the public a line of first class propellers, between the city of Erie and lake ports. Responsible through bills of lading and the shortest lake and rail line to the East.

In the bill of lading, issued to Wright & Co., was the clause, "rates from Chicago to Philadelphia @ 16c. per bus. ;" in that issued to Elmendorf & Co., "rates from Chicago to Bound Brook and Newark, 17c. per bus. ;" and in that issued to Gilbert Wolcott & Co., was the clause, "rates from Chicago to Tamaqua, Pa., corn 17c., oats 11c. bush." Each of these bills contained these further clauses:

That the said Anchor Line and the steamboats, railroad companies and forwarding lines with which it connects, and which receive said property, shall not be liable * * * for loss or damage by fire, collision, or the dangers of navigation while on seas, bays, harbors, rivers, lakes or canals. And where grain is shipped in bulk, the said Anchor Line is hereby authorized to deliver the same to the elevator company at Erie, as the agent of the owner or consignee, for transhipment (but without further charge to such owner or consignee) into the cars of the connecting railroad companies or forwarding lines, and when so transhipped in bulk, the Baid Anchor Line and the said connecting railroad company or carrier

Phoenix Ins. Co. vs. E. & W. Trans. Co.

shall be, and is, in consideration of so receiving the same for carriage, hereby exempted and released from all liability for loss either in quantity or weight, and shall be entitled to all the other exemptions and conditions herein contained.

It is further stipulated and agreed, that in case of any loss, detriment or damage done to or sustained by any of the property hereby receipted for during such transportation, whereby any legal liability or responsibility shall or may be incurred, that company alone shall be held answerable therefor in whose actual custody the same may be at the time of the happening of such loss, detriment or damage, and the carrier so liable, shall have the full benefit of any insurance that may have been effected upon or on account of said goods.

On the day of shipment, the libellant through its agent in Chicago, made an insurance on the consignment to Wright & Co. of $8,000, on that to Elmendorf & Co. of $520, and on that to Gilbert Wolcott & Co., of $700.

The Merchant, laden with the grain covered by these bills of lading, left the port of Chicago July 24th, and proceeded on her voyage to Erie. Having reached a point about ten miles south of Milwaukee, she was on the next day, at about nine o'clock in the morning, stranded in a fog on the west shore of Lake Michigan. By reason of this event, there was a total loss to the shippers of these several shipments of grain. Notices of abandonment were given to the insurance company, and on claim made, libellant paid to the several shippers the amounts of insurance on their respective shipments as and for a total loss.

The libel alleged that these shipments of grain were placed on board the Merchant, to be carried to Erie and there delivered for the shippers for transhipment; that the loss did not occur by reason of fire, collision, or the dangers of navigation, but was occasioned by the unseaworthiness of the vessel, and unskillfulness, carelessness and negligence in her conduct and management while on her voyage; and that by payment of the insurance on said shipments, libellant became subrogated to all the rights, interests and rights of action of the assured against the carrier. It was also alleged that these shipments of grain were in fact wholly lost, except

Phoenix Ins. Co. vs. E. & W. Trans. Co.

about 5,188 bushels, which quantity was brought into the port of Milwaukee in a perishable condition, and unfit for transhipment, and was sold by respondent for $1,037.60.

The suit being in personam, and the respondent being a corporation of another state, service was obtained by process of attachment levied upon a vessel of the Anchor Line found within the jurisdiction of the court, as authorized by the rules in admiralty.

The answer put the libellant upon proof of various allegations in the libel, and denied that the loss was occasioned by unseaworthiness of the propeller, or the unskillfulness, mismanagement, carelessness or negligence of respondent, or of any of its officers, agents or servants.

It was alleged that the propeller was seaworthy, and that the loss occurred by a peril of navigation, without any fault of the vessel, or any fault, negligence or want of skill on the part of those in charge of her.

As an affirmative defense it was alleged that at the time of the loss, the grain covered by the bills of lading was in the actual custody of the respondent, which was the carrier thereof, and that if any liability arose on account of the loss (which was denied), respondent was the company and carrier alone answerable therefor, and therefore, that by the provisions of the bills of lading, respondent became entitled to the full benefit of the insurance on the grain; and so, that no action could be maintained by libellant against respondent, on account of the loss.

A further defense interposed was that the court had no jurisdiction of the subject-matter of this action; and the ground of this defense was that by the bills of lading the grain in question was to be transported by respondent by boat, railroad companies and forwarding lines to points and places in the states of Pennsylvania and New Jersey, viz.: Philadelphia, Tamaqua, Bound Brook and Newark; that it was understood and agreed by the parties that part of the transportation should be performed on land and by means of railroad cars, and

Phoenix Ins. Co. vs. E. & W. Trans. Co.

that, therefore, the alleged causes of action set out in the libel were not causes of admiralty jurisdiction.

Van Dyke & Van Dyke and N. J. Emmons, for libellant.

W. P. Lynde and George B. Hibbard, for respondent.

DYER, J.-Upon the issues made by the pleadings, three questions arise, which were very fully and ably argued at the bar.

1. Has the court jurisdiction of the subject-matter of this action?

2. If the court has jurisdiction, and the case is to be considered on its merits, was the loss occasioned solely by a peril of navigation, or by the unseaworthiness of the vessel or the negligence and unskillfulness of those in charge of her, either in connection with, or in the absence of such peril?

3. Is the respondent entitled to the benefit of the insurance in this case?

First. Upon the question of jurisdiction, the claim of the respondent is, that the bills of lading were through contracts to carry the grain from Chicago to the several points inland, in Pennsylvania and New Jersey, by means of steamboats and railroads; that they were contracts made on land, to be performed on land by means of land carriage, in consideration of a single, entire through freight, which would be earned only on performance of the contracts, and that the contracts were, therefore, not maritime. It is true that the bills of lading denote a rate of freight for a continuous transportation service from the point of shipment to inland points in the states named; and to that extent they may be characterized as through contracts.

It is true, also, that part of this service was to be by rail, but the service to be performed by the Anchor Line was to be exclusively on water. The contracts were, that this line would carry the grain to Erie, and there deliver it to the elevator company, as the agent of the consignee for transhipment.