Philip Morris & Co., Ltd. v. United States

MaddeN, Judge, delivered the opinion of the court: The plaintiffs sue to recover the price which they paid to the Government for revenue stamps which they affixed to packages of cigarettes, cigars, and smoking tobacco, which tobacco products and stamps were destroyed by fire while being transported by truck to customers of the plaintiffs. We have held in prior cases that the Act of March 3, 1931, c. 441, 46 Stat. 1510, Sec. 2198 of the Internal Revenue Code of 1939 is applicable to such situations and authorizes the redemption of stamps so destroyed. Philip Morris & Co., Ltd., Incorporated, etc. v. United States, 120 C. Cls. 703; Stephano Brothers, etc. v. United States, 116 C. Cls. 503. The Government urges that the instant plaintiffs cannot recover because they did not own the tobacco products and stamps at the time of their destruction. Under the applicable statute, only the manufacturer or importer of tobacco products has the right to redeem stamps. If then, the ownership has passed to a purchaser from the manufacturer, the redemption statute would not seem to apply. Also, if the plaintiffs were not the owners of the destroyed articles, they would not have a property interest on which to base their suit. The plaintiffs shipped the goods by truck, freight prepaid, to their customers. That would indicate that title would not pass until the carriage was completed and the goods were delivered to the customers. But in billing the purchasers, the freight charge was added as a separate item. Since the purchaser was to pay the freight, that would indicate that the goods were to be his during carriage. And the invoices stated that transportation was to be at the purchaser’s risk, which would be a strong indication that the goods belonged to the purchaser while they were at his risk. While this was the way the contract was worded, it did not [752] express the real agreement of the parties. When the goods were destroyed by fire, the plaintiffs immediately replaced the goods, and cancelled the charges for the destroyed goods. They did this without waiting for reimbursement by the carrier. They thus showed by their actions that the goods were at their risk during transportation, and that is, of course, strong evidence of their ownership. The Government, not a party to the contract of sale, is not in a position to contradict the interpretation which the parties, by their actions, put upon their contract, even though that interpretation is not consistent with the words of their contract. We conclude that the plaintiffs were the owners of the destroyed goods. The Government says that the plaintiffs “sold” the destroyed goods to the trucking company, after they had been destroyed by fire, and were paid in full by the trucking company, so that they have been compensated for the tobacco and the stamps. They have been so compensated, but not as a result of a sale. Invoices of the goods were sent to the trucking company by plaintiffs but only as evidence of what goods they had shipped, and of their value. The carrier, as an insurer of the goods against all risks except certain ones not here relevant, paid the plaintiffs the value of the goods. The carrier was, in turn, insured by the Aetna Insurance Company, which paid it the same amounts which it had paid the plaintiffs. We consider first the effect which the carrier’s payments to the plaintiffs may have had upon the plaintiffs’ rights to redemption of the stamps. If one sues a wrongdoer who has damaged him or his property, the wrongdoer cannot defeat his suit by showing that he has been paid by an insurance company which had insured him against such risks. And unless the insurance company had contracted for a right of subrogation to his claim against the wrongdoer, he may keep both the insurance money and the damages recovered from the wrongdoer. The Government is, of course, not in the position of a wrongdoer in these cases. But if the plaintiffs had the statutory right, as we have held in prior cases that they [753] had, to redeem the destroyed stamps, we think the Government cannot deny that right on the ground that other arrangements which the plaintiffs may have had with another person required that other person to pay the plaintiffs the value of the stamps, in the circumstances in which they were destroyed. See United States v. American Tobacco Company, 166 U. S. 468. The plaintiffs sue here to the use of Aetna Insurance Company. There was no contract of insurance or of sub-rogation between the plaintiffs and Aetna Insurance Company, and hence there is no basis for making that company the beneficiary of our judgments. In Philip Morris & Co., Ltd. v. United States, 128 C. Cls. 153, the petition alleged that the insurance company, to whose use the plaintiff was suing, paid the plaintiff for the destroyed tobacco products and stamps. That may have indicated a third party beneficiary relation between the insurance company and the plaintiff, although the insurance policy there, as here, was issued to the transportation company. In the instant case, our findings show that the insurance company paid the transportation company. The latter company indorsed the checks over to the plaintiffs, but that was only its way of paying its obligation to the plaintiffs, and did not indicate any contractual relation between the insurance company and the plaintiff. The court, in Philip Morris last cited supra entered judgment, as requested, to the use of the insurance company. On the facts of the instant case, we think no basis exists for doing that. We will, therefore, enter judgments for the plaintiffs. What they may feel legally or morally bound to do with the money when they get it is not our concern. The plaintiffs in Nos. 683-53 and 684-53 may have judgments in the amounts of $5,864.26 and $330, respectively, each with interest as provided by law. It is so ordered. Whitaker, Judge; Littleton, Judge; and Jones, Chief Judge, concur.