Insurance Company v. Railway , 77 S.C. 467 ( 1907 )

August 3, 1907. The opinion of the Court was delivered by The plaintiff insurance company seeks to be subrogated to the rights of Millett Co. to recover under section 2135 of the Code. This statute makes every railroad corporation responsible in damages to the owner whose property may be injured by fire, communicated by its locomotive engines or originating within the limits of the right of way, in consequence of the act of its authorized agents or employees, except in any case where the property shall have been placed on the right of way of such corporation, unlawfully or without its consent. It was shown that the cotton of Millett Co. was destroyed by fire, while on defendant's right of way, but not tendered for shipment, by a spark communicated from defendant's locomotive engine; but the vital question is, whether the cotton was on defendant's right of way by its consent, as contemplated by the statute.

The undisputed testimony was that Millett Co. placed the cotton on defendant's right of way under an agreement, stipulating: "This cotton is deposited on the premises of the Southern Railway Company and the same remain upon the premises of this company without its consent and at your (Millett Co.) sole risk, until tendered and accepted for shipment."

Now, it is contended that notwithstanding this express stipulation, the cotton was on defendant's right of way by its consent, before it was tendered for shipment. We cannot think so. Millett Co. and those in privity with them, should be estopped to assert a fact which is contrary to their agreement, that until tendered for shipment the cotton remains upon the right of way without defendant's consent.

It is said that such an agreement is void on the ground of public policy. As it subserves a very high public policy to enforce contracts between parties sui juris, Courts should not nullify contracts as against public policy unless the case is free from all reasonable doubt. The rule is that, "a contract is not void as against public policy, unless it is injurious to the interest of the public or contravenes some established interest of society." What interest of the public is injuriously affected by the agreement in question? Millett Co. had no right as a member of the public to place cotton on defendant's premises, unless tendered for shipment, except by agreement with defendant, and defendant owed no duty to the public or to Millett Co., to allow cotton to be placed on its right of way, except for shipment.

A different question would be present if Millett Co. had the right as a member of the public to place cotton on defendant's right of way, independent of an agreement. Thestatus of the cotton on the right of way being fixed by the agreement alone, must be determined by the agreement alone. If it be true that the cotton was on defendant's premises by its consent on condition, the owner cannot cling to the consent and repudiate the condition upon which it was given, for that would be like a consent obtained by fraud or deception which is no consent.

The authorities generally hold, that a contract by a railroad corporation is not against public policy, because it exempts from liability for fires, even negligently communicated by its agents or defective instrumentalities to property placed by the owner upon railroad premises, not as a patron dealing with the company as a common carrier, but by virtue of the special agreement. Griswold v. Illinois Central R.R. Co., 90 Iowa, 265, 24 L.R.A., 647; Hartford F. Ins.Co. v. Chicago M. St. P.R. Co. (C.C.A.), 30 L.R.A., 193, 20 Sup. Ct. Rep., 33, following the rule established by the State Court in the Griswold case. Stephens v. SouthernPacific Co. (Cal.), 29 L.R.A., 751, 50 Am. St. Rep., 17;Greenwich Ins. Co. v. Louisville Nashville R.R. Co. (Ky.), 56 L.R.A., 477; Osgood v. Central Vermont R. Co.,77 Vt., 334, 70 L.R.A., 930; Mann v. Pere Marquette R. Co.,135 Mich., 210, 97 N.W., 721. These cases combat the view that the public has an interest in the contract, because it tends to induce negligence in the equipment and operation of the locomotives.

The contract in this case is not to do an act prohibited by statute or which is contrary to the public policy as declared by a statute, but is the admission by both parties of a fact which takes the case out of the statute, viz; that the cotton was not upon the right of way with the consent of defendant until tendered for shipment.

Under the foregoing views it was error to refuse to direct a verdict for defendant and to refuse the motion for new trial.

The judgment of the Circuit Court is reversed.