Minneapolis, St. Paul & Sault Ste. Marie Ry. Co. v. Home Ins.

Mitohell, J. ‘By the policy in suit the defendant insured the plaintiff “on flour, corn, grain, seeds, provisions, and other merchandise, excluding petroleum or its products; it being understood and agreed that the insurance under this head is to cover the liability of the insured as carriers and warehousemen, as well as their own property, * * * while contained in their elevator situated at Gladstone, Mich.” It is too plain to admit of argument that, as to the property of others intrusted to its custody, this was not an [241] insurance for the benefit of the shippers, but for the benefit of the plaintiff! exclusively, and only to the extent of its own interest. It is well settled that, if the carrier would insure for the benefit of the owners of the property, this must appear from the use of apt terms in the policy to that effect. There is not a word in this policy that indicates any intent to insure any other interest than that of the plaintiff to the extent of its liability as carrier and warehouseman. Tt necessarily follows that to entitle plaintiff to recover it was incumbent on it to prove that it was liable as carrier or warehouseman to the owners for the loss of the grain destroyed by fire in its elevator at Gladstone. Recognizing this fact, the plaintiff alleged in its complaint agreements between itself and the several shippers that it would procure at its own expense policies of insurance on their grain against loss by the fire while in this elevator. Upon the trial the plaintiff itself introduced the bills of lading issued by it to the several shippers, by the terms of which it was expressly provided that plaintiff should not be liable for any loss of or damage to the property by fire not caused by its negligence or that of its agents. It may be here stated that the grain was consigned to Buffalo, and was destroyed by fire while in the elevator at Gladstone, awaiting delivery by plaintiff to the next succeeding line of carriers. The plaintiff was then permitted, against the objection and exception of the defendant, to introduce parol evidence of an agreement between itself and the shippers, made at or prior to the shipment of the grain, and prior to the execution of the bills of lading referred to, that it would procure insurance on the grain as alleged in the complaint. Even if this evidence was otherwise competent, it was inadmissible for the reason that it did not tend to prove any liability of plaintiff as carrier or warehouseman, which was all against which the defendant had insured it. But to this point we shall refer hereafter. One ground on wnich counsel seek to sustain the admissibility of this oral evidence is that the rule against varying a written contract by parol applies only to controversies between parties to the instrument and their privies, and not to controversies between strangers to the contract, or between one of the parties to the instrument and a stranger to it. The rule is as stated, with this [242] limitation, however: that the right in the latter class of cases to vary a written contract by parol'is limited to rights independent of the instrument. As to rights which originate in the relation established by the written contract, or are founded upon it, the rule against varying it by parol applies. Browne, Parol Ev. § 28; Sayre v. Burdick, 47 Minn. 367, (50 N. W. Rep. 245;) Wodock v. Robinson, 148 Pa. St. 503, (24 Atl. Rep. 73.) In the present case plaintiff is claiming under this policy rights wholly dependent upon its liability to the shippers of the grain. That liability is at once both the basis and the measure of defendant’s liability; and it would be most unreasonable that it should be allowed, as against defendant, to establish that liability by proof of oral promises to the shippers which the latter could not prove against it. If the bill of lading is conclusive between the shippers and the plaintiff, it must be equally so, in this case, between the plaintiff and the defendant. Counsel further claims that this parol evidence was also admissible as showing that the bills of lading were in fact never accepted as the contract between the parties; in other words, as we understand counsel, they propose to throw aside the bills of lading as never having become operative, ignore the express oral agreement to insure, and then rest their case upon an alleged oral contract of carriage, in which there were no exceptions to the common-law liability of carriers. With all due respect to counsel, it seems to us that this contention is entirely baseless. The complaint was framed, and the case tried throughout upon the theory that the liability of plaintiff to the shippers grew out of the express agreement of the former to insure the grain, and the record contains nothing even suggestive of the present contention of counsel. The evidence furnishes no support to this contention. The undisputed facts are that the manner in which the business was done was that, immediately upon loading a car, a short bill, or, as it is called, a “shipping receipt,” was issued to the owner, and, when a sufficient number of cars had been loaded to constitute a “shipment,” the shipper surrendered these receipts to the plaintiff, and received in their place a regular or large bill of lading, of the form already described, to which was attached a list of all the [243] cars in tbe shipment. These bills of lading- the shippers attached to the drafts drawn on the consignees. This had been the customary and uniform manner of doing business between the parties for years. These large bills of lading had always been accepted and used by the shippers without objection. This conclusively proves that the owners perfectly understood, when shipping the grain, that these large bills of lading, and neither their preliminary talks nor the small “shipping receipts,” were to be the final repository and sole evidence of the contract between themselves and the plaintiff. In the absence of fraud or mistake, of which there is no claim, the bills of lading must be conclusively presumed to be the final and complete expression of the engagements of the parties; certainly, at least, of the obligations and liabilities of the plaintiff as carrier or warehouseman in the transportation of the property. Whether, as between the shippers and the plaintiff, the former could show by parol, as a collateral agreement, an undertaking to procure insurance on the grain, it is unnecessary to consider, for under such an agreement the liability of the plaintiff would not be as carrier or warehouseman, against which alone the defendant insured. The undertaking of the defendant to insure the plaintiff against its liability as carrier and warehouseman can have but one meaning, viz. the liability growing out of the relation of carrier and warehouseman as such. It was never intended to cover liabilities which the plaintiff might incur by virtue of special contracts as to matters entirely outside of their common-law liability as carriers and warehousemen. It is no part of the duty of common carriers to procure insurance on property intrusted to their custody for the benefit of the owners. Had this plaintiff, in order to secure the business of these shippers, guarantied them a certain profit on their grain, or the receipt of a certain price for it after its arrival at Buffalo, there -would have been as much reason for claiming that the liability thus incurred was covered by this policy as that incurred by the agreement to procure insurance on it. Counsel are not correct in sajdng that the liability incurred by the agreement to procure insurance is nothing more th‘an the unqualified common-law liability of a carrier. Suppose, for example, the plaintiff had, in the exercise of ordinary diligence, secured policies of insurance on this grain, and some of the insurance companies had become in [244] solvent. The plaintiff would not have been liable on its contract to procure insurance, but it might have been liable as carrier. Again, suppose plaintiff had failed to procure insurance, and the grain had been destroyed from some cause for 'which a common carrier. is not liable, it would nevertheless have been liable for its failure to perform its contract to procure insurance. But further discussion is unnecessary. The policy was never intended to cover liabilities which the plaintiff might incur regarding the property by special contracts entirely outside of and foreign to its common-law duties as carrier or warehouseman. It may be added that there is no claim that the loss was caused by the negligence of the plaintiff, and hence not within the operation of the stipulation in the policy exempting it from liability for loss by fire. -Under no view of the case can the plaintiff recover. (Opinion published 56 N. W. Kep. 815.) Application for reargumenf denied December 20, 189S. On defendant’s appeal the order appealed from is reversed. On plaintiff’s appeal that part of the order appealed from is affirmed.