SECOR and others v. SINGLETON and others.

(Circuit Court, E. D. Missouri. December 6,,1881.)

1. DEMURRER TO BILL-VERIFICATION-EQUITY RULE 31.

A demurrer to a bill in equity should be certified by counsel to be, in their opinion, well founded in point of law, and supported by the affidavit of the defendant that it is not interposed for delay.

2. TAXATION-DECISIONS OF STATE COURTS GOVERN.

The decision of the highest court of a state upon a question of local taxation is conclusive.

3. SAME-EXEMPTIONS.

Where the stock of a company is by law exempt from taxation, its property cannot be taxed.

Scotland County v. Missouri, Iowa & Nebraska R. Co. 65 Mo. 120.

In Equity. Demurrer.

The bill alleged that the Alexandria & Bloomfield Railroad Company was duly incorporated by an act of the general assembly of the state of Missouri, and that by a provision of its charter its stock was made exempt from taxation for the period of 20 years after its completion, which period has not yet expired; that said road ran through the counties of Clark, Scotland, and Schuyler, in the state of Missouri, to a point on the northern boundary line of said state; that said company was afterwards consolidated, under the laws of Missouri and Iowa, with the Iowa Southern Railway Company, a corporation in the state of Iowa, and has been since known as the Missouri, Iowa & Nebraska Railway Company; that by virtue of the laws of said states the consolidated company became entitled to all the privileges and immunities of the original corporations; that said Iowa & Nebraska Railway Company has no property in said counties of Clark, Scotland, and Schuyler, except its roadbed and other property used in the operation of its road; that taxes had been illegally assessed against said property, and that the defendants, the auditor of the state of Missouri, the judges of the county courts of said counties, and others, have combined to compel said company to pay taxes in said counties upon its property therein situated, and had employed attorneys to institute and maintain suits for taxes assessed against said property; that the complainants owned a large amount of stock in said company, and had requested the directors and officers of said company, and said company, to refuse to pay said taxes, and to take proper steps to resist the imposition of taxes upon said property, but that they had refused to take any such steps; and that said company had, through its officers, announced its intention to pay said illegal taxes. The prayer of the bill was that the taxation of said company's property should be declared illegal, and the acts of the auditor and the county officers void and of no effect; and for a writ of injunction to restrain the defendants from taking any steps towards the assessment of taxes upon the property of said road, or the collection thereof. The defendants demurred to the bill upon the ground that it set forth no ground of action or complaint against them. The

demurrer was not certified by counsel to be, in their opinions, well founded in point of law, nor was it supported by the affidavit of the defendants that it was not interposed for delay.

Baker & Hughes, for plaintiffs.

Waldo P. Johnson and H. A. Cunningham, for defendants.

TREAT, D. J. A so-called demurrer was filed to the amended bill in this case on April 1, 1880, not in conformity with rule 31, United States supreme court. The plaintiff might have moved, therefore, more than a year ago, for a decree pro confesso as to said demurrants. That so-called demurrer is now submitted and overruled. An examination of the case satisfies the court that if said demurrer had conformed to the rules, it would not have been well taken. It was interposed, obviously, for mere delay, inasmuch as the only legal question involved had been decided, as set out in the bill, (65 Mo. 123,) adversely; which decision this court recognizes as conclusive on a question of state taxation.

To the amended bill, filed January 7, 1880, only one answer has been filed, which is a general denial, couched in the form of an answer to a law action in the state court, and not sworn to. No replication thereto has been filed; so the case has been suffered to float. More than a year ago the plaintiff could have had, by proper motion, a decree pro confesso: (1) Because the so-called demurrer was no demurrer in conformity with the rules of the supreme court; and, even if it were, it was not well taken, under the conclusive rulings of the supreme court of Missouri. (2) Several of the defendants had interposed no answer to the amended bills. (3) The only defendant purporting to answer, interposed merely a general denial to the allegations of the bill, to which there should, possibly, have been a pro forma replication. Such practice as a general denial in form of a general issue is wholly unknown in equity; and, whether allowable or not, the case might have been set down for hearing on the pleadings, with such evidence as had been presented within the time prescribed for taking the same. If such a denial as to Holliday puts the party to a formal replication and proofs, the said defendant could, on motion, have the case dismissed as to him. But the manner in which these faulty proceedings have been pursued induces the court to permit, on terms, further action to be had, so far as the same may pertain to the merits, and no further.

The demurrer will be overruled, at the cost of the demurrants. Plaintiffs may take such further action as they may deem necessary.

PRESIDENT, ETC., OF INS. CO. NORTH AMERICA V. ST. L., ETC., RY. co. 811

PRESIDENT AND DIRECTORS OF THE INSURANCE COMPANY OF NORTH AMERICA v. ST. LOUIS, IRON MOUNTAIN & SOUTHERN RY. Co.

SAME V. SAME.

SAME v. SAME.

(Circuit Court, E. D. Missouri. January, 1882.)

1. COMMON CARRIER-BILL OF LADING-NEGLIGENCE.

A provision in a bill of lading, issued by a common carrier, to the effect that the carrier shall not be liable for loss by fire, will not exempt it from liability for a loss by fire occurring through its negligence.

2. SAME-NEGLIGENCE.

Where a common carrier undertakes to transport cotton for hire upon open flat cars, it is bound to take all needful precautions for the cotton's safety and protection.

3. SAME-SAME-MEASURE OF DAMAGES.

Where cotton in course of transportation by a common carrier was destroyed by fire in consequence of the carrier's gross negligence, and the owners assigned and transferred their interest in said cotton and their rights against said carrier to a fire insurance company, by which the cotton was insured, upon its indemnifying them for the loss sustained, held, that the insurance company was entitled, as against the carrier, to the value of the cotton at the time of the loss, with 6 per cent. interest from the day upon which the cotton would probably have been delivered to the owners if it had not been destroyed.

The facts alleged in the petitions in the above entitled cases are, so far as it is thought necessary to set them out here, substantially as follows:

Certain bales of cotton, owned by different parties in each case, were lost while in the custody of the defendant, a common carrier, and while being transported by it for hire.

At the time of the loss the cotton was covered by certain policies of insurance issued by the plaintiff, and upon its paying certain sums to the owners of the cotton they assigned all their rights, titles, and interests in, to, and concerning it to said company. The owners of the cotton are alleged in said petitions to have been damaged in certain specified sums, and the insurance company asked judgment for the amount of damages sustained by them.

The answers deny the facts alleged in the petitions, and allege that the losses complained of occurred from fire, without negligence on the part of the defendant, and that it was expressly stipulated and agreed by the shippers of the cotton that the defendant should not be liable as a common carrier or otherwise for loss or damages caused by fire.

In the replies the affirmative allegations in the answers are denied, and gross negligence on the defendant's part is alleged.

A jury was waived and the three cases were tried together by the court sitting as a jury.

At the trial, it appeared from the evidence that the losses all occurred from fire, through the defendant's negligence in attempting to convey the cotton on open flat cars through woods which were on fire.

In the case referred to as the one in which the negligence was least culpable the conductor did not see the fire until very close to it, and there being no side track, went ahead. In the other cases the smoke arising from the fire could be seen at a distance, and the cars on which the cotton was loaded might have been left in safety upon a side track. The cotton would probably have been delivered to its owners, if it had not been destroyed, on or about January 10, 1877.

The amounts referred to in the opinion of the court are the sums which the different shipments of cotton were proved to have been worth at the time of the loss.

The allegations of the answers in reference to the provisions in the bills of lading as to the liability of the carrier by fire were proved.

Robert Harbison, for plaintiff.

Porter & Pike, for defendant.

TREAT, D. J. These cases were heard at the same time and rest mainly on the same general principles. Some of the evidence introduced was incompetent, it being merely hearsay, as contradistinguished from "verbal facts." Discarding all such, the main question decisive of the cases is as to the defendant's negligence. Although the shipment of cotton on open or flat cars may not be in itself such an act of negligence as would make the carrier liable under all contingencies, yet when such shipment is made, there is devolved upon the carrier the duty to take the additional precautions needed for the protection and safety of the cotton. In these cases it seems that not only was no such precaution taken, but that the train in two of the cases was hurried forward when fires were adjacent to the track, or sufficiently near to render it more than probable that so inflammable an article would be ignited and destroyed. In the other case the negligence, although not so gross, was extremely culpable.

As it is admitted that if the loss was caused by the defendant's negligence the plaintiff must recover, it is unnecessary to consider what effect, if any, the Texas statutes would have upon the exemptions in the bill of lading against loss by fire, so far as the defendant is concerned. Rev. St. Texas, 1879, p. 48.

Judgments for the plaintiff will be enforced for the respective amounts, with interest at the rate of 6 per cent. per year from Jan uary 10, 1877, with costs.

BARNES and others v. HARTFORD FIRE 1Ns. Co.

(Circuit Court, D. Minnesota. January, 1882.)

SEPARATE RISKS UPON SAME PROPERTY-LAWS-MEASURE OF

Where several insurance companies take separate risks upon the same property, and a loss occurs, the companies are liable in the ratio that their risks bear respectively to the total risk.

Action at law, tried before the court without a jury upon an agreed tatement of facts.

W. D. Cornish, for plaintiffs.

C. K. Davis, for defendant.

NELSON, D. J. This suit is brought against the defendant upon an insurance policy, dated February 22, 1881, by the terms of which it insured the plaintiffs, as their interest might appear, against loss or damage by fire "to the amount of $20,000 upon grain held by them. in storage, or in trust, or on commission, or sold but not delivered, contained in elevators and warehouses situate on the lines of the Northern Pacific and St. Paul, Minneapolis & Manitoba Railroads, as per schedule herewith, as the same may be owned, controlled, or leased by the said assured."

The schedule referred to, and which was attached and made a part of the policy of insurance, was in words and figures as follows:

"On grain owned or held by them in storage, or in trust, or on commission, or sold but not delivered, contained in elevators, warehouses, situate on the lines of the Northern Pacific and St. Paul, Minneapolis & Manitoba Railroads, as per schedule herewith, as the same may be owned, controlled, or leased by the said assured.

"It is understood and agreed that, in case of loss under this policy, this company shall be liable only for such proportion of the whole loss as the amount of this insurance bears to the cash value of the whole property herein described and contained in the elevators and warehouses, in schedule herewith, at the time of the fire.

"Permission to clean grain, and to make ordinary alterations and repairs in and to any of the buildings named in this schedule, and to run at night when necessary. Other insurance permitted, without notice, until required.