North British & Mercantile Ins. v. Greenville Compress Co. , 23 F.2d 526 ( 1927 )

DAWKINS, District Judge.

Ordinarily I like to go into an investigation of the law cited in a case of this kind, as well as to give a careful study of the facts, of the evidence that is introduced; but I believe this is a case which warrants me in disposing of it now, with the lights before me, and, if the parties intend to appeal one way or the other, then it may be put on the road to finality by an appeal to the appellate court.

As I see' the situation, there was an extraordinary condition presented as a result of the breaking of the levee near Greenville, which submerged the compress at that point, as well as compresses at Leland and Belzoni, involving some 60,000 bales of cotton, upon which the. complainant in this case was insurer; the allegations in the petition for the appointment of a receiver setting out that some 20,000 bales were covered at Greenville. The allegations otherwise sét up a condition obtaining there of confusion, which disclosed such a commingling of the cotton which was covered by insurance with that which was not, which, if taken as true, would indicate a situation where a court of equity, in my opinion, would be justified in stepping in.

Now, as to the extent of the interest disclosed by the complainant, it is shown, as I say, that the complainant was the insurer, and that the damage had occurred. It was inescapable that a very large liability under the policies would attach to the complainant in this ease, and it was apparently the one in position to take action, because of its greater interest than any one else, and perhaps being in a better condition to finance the undertaking to salvage, and to save from the submerged cotton such portions as were possible.' I think the record of that situation, both of pleadings and of proof, establishes such an interest in the complainant as justified it in applying to the court for relief.

After appointing the receiver, and taking charge to such extent as was possible under the physical conditions that obtained at that time, evidently the receiver must have become active in interesting people who would possibly be able to purchase the cotton or to finance its salvage. If he had undertaken under orders of the court and the issuance of certificates to salvage the cotton himself, then we might have had a cross-bill here that would have been much greater than it is. So the reasonable, logical thing for him to have done was just what he did do, and that was to bast about for some one who was in the business, and who could undertake to recover the cotton.

As disclosed by the pleadings and by the applications which were presented to the court for that purpose, those efforts resulted, in the obtaining of certain bids upon the cotton in the condition in whieh it then was— that, is, while submerged — whieh was in a large measure “buying a pig in the poke,” because no one could tell, until the water would go down, what the extent of the damage would be. The river might rise as the result of floods, or what not. In a large measure it occurs to me that it was a gamble on the part of those who were willing to buy at "that time, and I believe the record does show that, the river did make subsequent rises,, whether after the sale, or before, I do not recall.

But in any event the evidence discloses, after the water went down, that it was possible to identify somewhere from 25 to 40 or 50 per cent, of some of this cotton — that is, a small portion of it — in warehouse No. 2, whieh I believe the evidence indicates contained about 4,000 out of 28,000 bales, and that in the other warehouse the percentage was smaller. I think, notwithstanding the proof of the ability to identify the cotton, the evidence reasonably shows that to have undertaken to deliver that portion whieh was subject to. identification in the- manner whieh is contended for would have added to the expense, both upon the cotton that was so delivered, as well as the other thousands of bales that were in the press; that whatever saving might have accrued in price to such portions of the cotton as were not as badly damaged as others would have exceeded any benefit to be attained thereby. In other words, I believe that the court ig justified in looking at it from a practical standpoint.

An extraordinary condition, as stated, existed, an unprecedented condition, in whieh people who theretofore had been dealing in the ordinary and usual course of affairs had put their property in a common warehouse, under circumstances where, without the in-‘ tervention of these unusual- conditions, it could have been readily identified and delivered under the contract. But, once the flood came and conditions disclosed by this, record were produced, then it became a question of the best thing for the benefit of all concerned, and I believe.the record shows that the course pursued was the best in the interest of all parties.

My conclusion is that the defendants are not. entitled to be treated any differently from those of the other persons who had cotton in this compress. Judgment will be entered accordingly.