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Z| Ihe Marine Record. MARITIME LAW. INSURANCE—SUBROGATION—BILL OF LADING —sTIPULATION THAT CARRIER MAY HAVE BENEFIT OF INSURANCE EFFECTED UPON GOODS—CONSTRUCTION.—PHENIX INSUR- ANCE CO. V8. ERIE & WESTERN: TRANSPOR- TATION CO. Supreme Court of the United States. Appeal from the U.S. Circuit Court, Eastern Dis- trict of Wisconsin. The insurer can take by subrogation noth- ing but the rights of the assured. If the assured has no right of action, none passes to the insurer and if the assured’s right of action is limited or restricted by lawful contract between him and the person sought to be made responsible for the loss, asuit by the insurer, in the right of the assured, is subject to like limitations and restrictions, Any law{ul stipulation between the owner and earrer of goods, limiting the risks for which the earrier shall be answerable, sup- plies in the suit brought in the right of the owner for the benefit of the insurer against the carrier. While 1 carrier cannot by stipulation ex- empt himself from the consequences of his negligence he may obtain insurance against the loss of the goods though oceasioned by his negligence, and may lawfully stipulate with the owner to be allowed the benefit of the insurance voluntarily obtained by the latter. Such a stipulation, being valid as between the owner and the carrier, prevents the owner himself or the carrier, who can only gue in his right, from maintaining an action against the carrier upon any terms incon- sistent with this stipulation. So where bills of lading contained the stipulation that the carrier ‘‘shall have the benefit of any insurance effected upon the goods,” and the goods were lost by the car- rier’s negligence, and the insurance com- pany which had insured the goods, having paid the owner as for aconstructiye total loss, brought this action against the carrier for the amount so paid, held, that it could not recover beyond the amount allowed in the general average adjustment. This was a libel in admiralty against a common carrier by an insurance company which had insured the owners upon the goods carried, and had paid them the amount of the insurance, and claimed to be subro- gated to their 1ights against the carrier. The defenve relied on was that, by a pro- vision of the contract of carriage, the car- rier was to have the benefit of any insurance wpon the goods. The District Court held that this provision was valid, and therefore no right of subrogation accrued to the libelant, and entered a decree accord- ingly. he libelant appealed to the circuit court, which found the following facts: The respondent was a Pennsylvania cor- poration, authorized to carry on the business of lake transportation was engaged in busi- mess as a common carrier and owned a line of propellers, running between Erie and other ports on the lakes, called the Anchor Line, one of which propellers was the Mer- On July 24, 1874, the firms of A. M. Wright & Co. owners of 16,325.34 bushel- of corn, worth $8000; Elmendorf & Co., owners ot of 800 bushels corn, werth $600 and Gilbert, Walcott & Co., owners of 37@ bushels of corn : and 689 bushels of oats, together worth $800, caused to be shipped on board the propeller Merchant, then lying at Chicago, and bound tor Erie, the grain aforesaid, consigned to themselves at other places beyond; and severally made oral agreements with the respondents by which, in consideration of certain stipulated freight, the respondent agreed to transport the several parcels of grain from Chicago by way of the lakes to Erie, and thence to forward them to their ultimate destinations; and it was tacitly anderstood that bills of lading for the ship- ments would be subsequently issued to the shippers, but nothing whatever was said re- specting the terms and conditions thereof. After the goods had been received on ‘board and the propeller had departed on her voyage the respondents delivered to the shippers, respectively, bills of lading, each of which described the goods as shipped on the propeller Merchant and adressed to the own- -ers by name at their ultimate destination; fixed the rate of freight from Chicago to that destination; and contained an agree- ment that goods sheuld be ‘transported by the Anchor Line, and the steamboats rail- road companies and forwarding lines with whieh it connects until the said goods shall have reached the point named in the bill of lading, on the following terms and con- ditions”? among which were these: “The said Anchor Line and the steam- boats, railroad companies and torwarding lines with which it conneets and which re- ceive said property shall not be Jiable”’ “‘for loss or damage by fire, collision or the dangers of navigation while on seas, bays, harbors, rivers, lakes or canals. And when 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 traus- shipment (but without further charge to such owner or consignee) into the cars of the connecting railroud companies or for- warding lines; and when so transhipped in bulk the said Anchor Line and the said con- necting railroad company or carrier shall be and is, in consideration of so receiving the same for carriage. hereby exempted and re- leased from all liability for loss, either in quantity or weight and shall be entitled to all other exemptions aud conditions herein contained.”’ “Tt is further agreed that Line and the steamboats, forwarding lines with which it connects, shall not be held accountable for any dam- age or deficiency in packages, after the same shall have been receipted for in good order by consignees or their agents, ator by the next carrier beyond the point to which.-this bill or lading contracts.’ “It is further stipulated and agreed that in case of any loss, detriment or damage done to or sustained by any of the property herein 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, detri- ment or damage; and the carrier so liable shall have the full benefit of any insurance that may have been effected upon or on ac- count of said goods.” “And it is further agreed that the amount of the loss or damage so accruing, so far as it shall fall upon the carriers so above de- scribed, shall be computed at the value or cost of said goods or property at the time and place of shipment under this bill of lad- ing.’’ These bills of lading were received by the Shippers without protest or objection and were signed by Elmendorf & Co. and hy Walcott & Co., but not by A. M. Wright & Co. The bills of lading were received by the shippers without specially reading the terms and conditions, their attention was not di- rected to them, nor was anything said re- specting them; and no reduction in freight from the rate stipulated in the oral agrec- ment was made in consequence of these terms, conditions or other considerations paid therefor; but the shippers had often before shipped goods by this line under similar and thereby knew, or had every con- tracts, opportunity of knowing, the contents of these bills of lading. ; The propeller completed the lading of the goods during the evening of July 24, 1874, and about midnight departed on her voyage. About 10 o’clock the next morning ina dense fog she was stranded on the western shore of Lake Michigan, about ten miles south of Milwaukee, through the negligence of those managing her, and immediately filled with water. and all the grain became wetand damaged; 1200 bushels of it were thrown overboard to get of the vessel, and 5188 bushels were brought into Milwaukee in a perishable condition, and were then sold for the sum ot $1,037,60, which was retained by the respondent. 4 : On said 24:h of July the libelant, a New York corporation, authorized to transact a general lake and insurance business, insured the shippers, at their request and expense, against loss or damage to their shipments trom perils of the seas and other perils; and issued to them certificates of insurance tor $8,000, $520 and $700, respectively in this form: : «No, 627, The Phcenix Insurance Com. pany, New York, $8,000. Chicago July 24, 1874. This certifies that A.M. Wright & Co. [are] insured, under and subject to the conditions of open policy No. 2263 of the Phenix Insurance Company, in the sum of eight thousand dollars, on corn on board the propeller Merchant, at and from Chicago to Erie. Loss payable to assured, order hereon, and return of this certi fieate. Cuas. E. Coase, Agent.’’ The policy of insurance, referred to in these certificates insured “Charles E. Chase, on account of whom it may concern,’ ‘lost or not lost, at and from ports and places to ports and places, on cargo, premiums to be settled monthly: upon all kinds of lawfal goods and merchandise laden or to be laden on board”? any vessel er vessels; and was otherwise in the usual form of an open policy of insurance for $1,000,000 against marine risks, including perils of the seas, “barratry of the masters and mariners, and all other perils, losses and misfortunes that have or shall come to the hurt, detriment or damage of the said goods and merchandise or any part thereof;” and contained these provisions: ‘The company are to be en- titled to premiums at the usual rates on all shipments, reported or not. Itis warranted by the assured to report every shipment on the day of receiving udvices thereof, or as the Anchor | railroads and | soon thereafter as may be practicable, when the rate of premium shall be fixed by the president or the vice-presiden’ of the com- pany.” ‘*No shipment to be considered as insured until approved and endorsed on this poliey by C. E. Chase, agent.’’ The shipments were duly approved and endorsed on the policy. On August 19, 1874, the shippers abandoned the goods to the libelant asa total loss, by written instru- ; mente, substantially alike, the material part being as follows: transfer, cede and abandon to the Phenix Insurance Company «all our right, title and interest in and to the property hereinatter specified and to all that can in any way be made, saved or realized from the damage or loss, reported to have occurred, by reason of which a claim of payment has been made by us, with full power to take and use all law- ful ways and means and (at the risk and ex- pense of the Phcenix Insurance Company) to make, save and realize the said property, to wit, 16,325 34 bushels of corn, as per bill of lading and invoice, shipped on board the propeller Merchant, bound from Chicago for Erie, and covered by insurance with the Phoenix Insurance Company by open policy No. 2263, certificate No. 627, under date of July 24, 1874.” In consequence thereof, the libelant paid to the shippers the amount of the insurance as and for a constructive total loss. A general average adjustinent was made on September 2, 1874, and re-adjusted on February 15, 1875, awarding to the libelant the sum of $2,466.12 on aceount of these shipments. : The circuit court made and stated the fol- lowing conclusions of law: 1. That the bills of lading were the con- tracts by which the rights of the parties were to be governed. 2. That under them the respondents beeame liable to the ship- pers for the value of the shipmente, by rea- son of the negliyent less ot the same, and that the shippers had rights of action there- for, 38. That by the abandonments, the libelants did not succeed to the rights of action of the shippers, by reason of the stipu- lation contained in the bills of lading, that “the carrier so liable shall have the full benefit of any insurance that may have been effected upon or on account of said goods.’”’ 4, That the libelant was eatitled to recover the sum ot $2,466.12, awarded to itin the general average adjustment re-adjusted as aforesaid, with interest thereon. The circuit court entered a decree for the libelant for this sum only, and the libelant appealed to this court. Mr. Justice Gray, after stating the case as above reported, delivered the opinion of the court. : It being found as a matter of fact that the lading of the goods on board the propeller was not completed until the evening of the 24th of July, that she departed on her voy- age about midnight and that the bills of lading were not delivered by the carriers to the shippers until after her departure, it is clear that the bills of lading» were not actually delivered until the 25th. But it being alse found that oral agreements tor the carriage were made on the 24th, with the understanding that’bills of lading would be subsequently issued, and that the ship- pers, having often before shipped goods by this line under similar bills of lading, knew or had every opportunity of knowing, their terms and conditions; it is also clear that the bills of lading were but a putting in form of the-oral agreements made on the 24th, and took eftect as if they had been delivered and accepted on that day. The certificates to the agent of the in- surance company, without which the policy of insurance did not attach to their goeds, were al-o made on that day, and described the goods as on board the propeller. The contract of carriage and the contract of in- surance must therefore be treated as sub- stantially contemporaneous, and both made before the loss of the goods. ‘There is noth- ing to show any misrepresentation or inten- tional concealment by the assured in obtain- ing the insurance, or that the insurer had or had not knowledge or notice ot the usual form of the bills of lading. Can EEE Some idea of the large amount of iron and copper, ete., which enters into the construc- tion of aship may be formed by reading the following paragraph: ‘The old war ship Niagara, recently broken up at the Charles- ton Navy Yards, yields 171,226 pounds of copper, 61,369 pounds of composition, 486 pounds of wrought iron, 646 pounds of cast iron and 18,000 pounds of lead. — Or Oo The tugs Reed and Williams succeeded in pleok the barge Kalkaska, ashore at Fort rativt, FOR LAKE 4ND CANAL MEN. Lake vessel owners and canal boat own- ers have many grievatices to r cord against the Buffalo elevator ring, for the reason that they are squeezed tighter every season. Feeble efforts have been made by the Lake Carriers’ Association at Buffalo to induce the elevator ring to loosen the grip a trifle, but it will not. The ring has adopted a higher rate for shoveling this season that prevailed last year. This action, on the part of the one executed by A. M. Wright & Co | of the elevator people, is evidence that they know the power they possess, a power “Chicago, August 19,1874, For andin which will be used by them to the end if consideration of the sum of eight thousand! they are not flanked out of the position and dollars, the receipts whereof is hereby ac- : forced to accord some relief to lake carriers. knowledged we do by these present assign,|The advisability of lake and canal men uniting to build elevators for their own use, as do some of the railroads, has been con- sidered, but Lo results have yet accrued, In the meantime the American grain trade in foreign markets is losing in volume for the reason that the toll of the elevator ring will not permit of its being delivered in the European markets at a price that will en- able it to compete with the product of India and Russia and other countries. The individual who can succeed in placing in Buffalo harbor a machine or elevator which will enable the grain of the north- west to go around this toll gate of the ele- vator ring will deserve the gratitude of the country. Mr. Lyman Smith, of Cleveland, has solved the problem by the construction of a pneumatic elevator and by actual test last Saturday at this port its capabilities were demonstrated. Some weeks past the scales, which support a hopper with a capacity of 120,000 pounds, or about 2,000 bushels, was tested by government standard scales, and the result of the elevating test showed beyond doubt that the results are limited only by the power applied, the quantity of grain lifted at the trial being 310 bushels per minute, with three pipes at- tached to the chamber for the reception of the grain to be weighed, when five or even six can be worked if there is suffi- cient power, Without occupyiug dock room the elevating barge can lift the grain from a lake vessel on one side and, after having weighed it, blow it into a canal boat on the other side, or put it into an elevator on the dock prepared for receiving it. In putting this before our readers we do not desire to be understood as saying that this single pneumatic elevator can go down to Buffale-and annihilate the gigantic mo- nopoly at that port. In fact we do not be- lieve that it would be permitted to work at all, even if the elevator ring must tell the shovelers that it had come to take the bread out of their mouths; we do not think that this elevator, if at Buffalo, alone and should prove its utility, would be patronized by lake or canal boat owners, for the reason that it could not store the grain, neither could it handle any great quantity of it unless canal boats were ready to receive it from lake ves- sels. Under these circumstanees owners would be afraid to patronize it; they would be put on the list. But, by the organization of a company of lake and canal boat owners with capital stock of one million dollars, ten or twelve barges, with iron hulls, could e built, say, 200 feet long, 50 feet beam and 25 feet deep. The machinery could be placed in one end and the blower in the other, leaving 125 feet in the center, which would store 100,000 bushels. Each barge could have four tanks for receiving the grain for weighing, each tank being provided with three or four pipes, the limit being de- pendent on the power of the machinery. These barges vould be built for from forty to fifty thousand dollars each, and they could take care of all the grain the present lake fleet could transport. There is no reason why this invention does not merit the closest attention of all vessel owners, as the work can be done at the rate of one-fourth of a cent per bushel, — (all owners know what the ring elevators charge), and it will emancipate them from the evils of shortage, the cost of three com- | missions between the vessel and the canal boat, and the exorbitant charges tor the use of - the steam shovel; and itis also worthy of the immediate attention of all men who are interested in putting on the market clean wheat, such as goes into the famed Minne- sota flour, and for which the highest price would always be paid in a foreign market, as by the pneumatic system of elevating, a current of air rushes through the grain, cleaning, and drying, and preserving it. It would, therefore, be wisdom for repre- sentative lake and canal men to come to- — gether for the purpose ot forming a combi- nation for protection. After having seen this. system work they will acknowledge that it is to be the elevator’ of the future, as nature abhors a vacuum. es v Subscribe for the Martine Recorp. 4 L |