Argument for Plaintiff in Error.

a proper place to store cotton under the circumstances was an immaterial question so far as the liability of the railroad company was concerned.

It was the place selected by the owners of the cotton, and not by the railroad company. The cotton was stored there by the owners and not by the company. The accumulation of cotton at this improper place, if it was improper, existed in the month of October, before our policy was issued, and in November. Less than 300 bales of the burned cotton were covered by bills of lading of that company, issued in October. Seventy-two bales of it were covered by a bill of lading issued November 10, only four days before the fire. No negligence can therefore be imputed to the railroad company on account of the unfitness of the place where the cotton was stored.

V. Assignment 3d is that the court erred in sustaining the demurrer of plaintiff to 7th paragraph of defendant's answer. That paragraph is as follows: "The defendant says that it is a provision of said policy, that it shall not apply to or cover cotton, which, at the time of the loss, was covered in whole, or in part, by marine policies, and it says that at the time of said loss, 2172 bales of said cotton, alleged by plaintiff to have been burned at said fire, and of the value of $101,973.73, were covered by marine policies theretofore issued to the respective owners of said cotton."

The policy, which is part of the complaint, contains the following provision. "It is agreed and understood to be a condition of this insurance that this policy shall not apply to or cover any cotton which may at the time of loss be covered in whole or in part by a marine policy."

By its policy, the plaintiff in error absolutely declined to insure any cotton which, at time of loss, was covered by marine policies. As to the validity of this condition, there can be no question. The right of the insurer to decline insurance absolutely upon certain classes of goods, or under circumstances distasteful to the insurer, cannot be denied. He can provide that goods held in trust are not insured, unless so declared in the policy, and the provision is valid. Baltimore Fire Ins. Co. v. Loney, 20 Maryland, 20.

Argument for Plaintiff in Error.

In this case, the plaintiff in error in positive terms declined to insure cotton covered by marine policies. A reason for this provision may easily be found, but it is not necessary to search for one. It is sufficient to say, thus is the contract written. We allege that at the time of loss, nearly all this cotton was covered by marine policies. If that be so no liability attached to this company for loss of cotton so covered.

VI. Assignment 10th is the rejection of competent evidence proffered by us that at the time of the fire 2172 bales of cotton covered by bills of lading of the railroad companies and alleged to have been burned, and of the value of $101,973, were covered by marine policies of insurance, theretofore issued to the respective owners of said cotton, etc.

By our answer we alleged that at the time of the fire there was a total insurance on the cotton burned to the amount of about $250,000 and claimed the benefit of the contribution clause in our policy. The complaint alleged total insurance to amount of $142,500.

Our policy contained the following contribution clause: "In case of any other insurance upon the property hereby insured, whether to the same party or upon the same interest therein or otherwise, whether valid or not, and whether prior or subsequent to the date of this policy, the insured shall be entitled to recover from this company no greater proportion of the loss sustained than the sum hereby insured bears to the whole amount insured thereon, whether such other insurance be by specific or by general or floating policies, or by policies covering only an excess of specified loss. And it is hereby declared and agreed that in case of the assured holding any other policy in this or any other company on the property insured, or any part thereof, subject to the conditions of average, this policy shall be subject to average in like manner.”

It will be seen by the very terms of the policy that it is immaterial on the question of contribution, whether the fire policies were taken out for the benefit of the owners or of the railroad companies. In either case the marine policies are

contributory.

The clause is very like, but a little stronger, than that sus

Argument for Plaintiff in Error.

tained by the Court of Appeals of Maryland in Fire Ins. Ass'n v. Merchants' & Miners' Trans. Co. already cited. Under it these marine policies were contributory to our fire policy. The validity of the clause can hardly be called in question. It is perfectly competent for an insurance company to provide in its policy that any other policy taken out on the insured property shall be considered contributory, even though that policy be invalid, or that its policy shall be absolutely void under like conditions. Liverpool, London &c. Ins. Co. v. Verdier, 35 Michigan, 395; Continental Ins. Co. v. Hulman, 92 Illinois, 145.

We then respectfully submit that we should have been permitted to prove the existence of these contributory policies. That proof being ruled out, we were held to pay the proportion of this loss which 10,000 bears to 142,500, while, if liable at all, we should have been held to pay only in proportion of 10,000 to 244,473.

VII. Assignment 11th is that the court erred in striking out testimony of the bookkeeper of Ralli Brothers, who were claiming pay from the Memphis & Little Rock Railroad Co. for 158 bales of cotton, to the effect that said cotton was covered by marine policies taken out by Ralli Brothers. It was stricken out on the ground that we could prove the insurance only by the policies. It was shown that we could not get the policies. The ruling was erroneous. Snow v. Carr, 61 Alabama, 363.

It was especially erroneous in this case, because the Company was making a claim on us for the value of those 158 bales solely because Ralli & Brothers had made a claim on them. Any evidence which the railroad could have used against Ralli Brothers we were entitled to use against the railroad, and certainly when Ralli Brothers refused to produce the policies, the railroad company could have proved their existence by their clerk. The bills of lading under which that cotton was shipped stipulated that the carriers should have the benefit of all insurance.

VIII. Our 17th assignment is that the court erred in refusing to instruct the jury that no cause of action arose on this policy, on behalf of the railroad companies, until actual payment of damages to the owners.

Opinion of the Court.

The statement of the facts in this case is a strong argument on behalf of that instruction. The Memphis & Little Rock Railroad has not paid a cent, and it is not alleged or proved that it ever will or intends to.

It is contesting the suits brought against it, and may, while we are writing, have defeated them. It was not a party to this action, nor estopped by the pleading therein. If it has defeated the owners in their actions, and it certainly ought to defeat them, on the evidence in this record,-what recourse would we have were this judgment affirmed?

The Missouri Pacific had paid nothing when this action was commenced.

No cause of action accrues in a case of this kind until payment of the railroad companies of the damages they claim. Cin., Ham. & Dayton Railroad Co. v. Spratt, 2 Duvall, 4.

Mr. U. M. Rose and Mr. G. B. Rose for defendant in error.

Mr. John F. Dillon, for defendant in error, in the interest of the St. Louis, Iron Mountain and Southern Railway Company.

MR. JUSTICE BLATCHFORD, after stating the case as above, delivered the opinion of the court.

The foregoing exceptions, except the two which relate to the sustaining of the demurrer to paragraphs 7 and 8 of the answer, may be grouped together, because they relate to the same question. The court refused to strike out the matter in the complaint which is before recited in brackets, and also overruled the demurrer of the defendant to that portion of the complaint; and on the trial the plaintiff was permitted to introduce evidence tending to prove some of the allegations contained in that part of the complaint. The three instructions before quoted as asked by the defendant, and not given, relate to the same matter.

The defendant contends that there was error in the action of the court covered by those exceptions, and complains that the court treated the words in the policy, "their own or held by

Opinion of the Court.

them in trust, or on commission," as if they read, "on account of whom it may concern;" that, as the plaintiff did not own the cotton, the beneficiaries under the policy were its owners; that no interest of any common carrier was covered by the policy; that it was not ambiguous; and that no parol testimony was admissible to aid in its interpretation or to show that the railroad companies were intended to be beneficiaries under it. The view urged is, that the plaintiff did not own any of the cotton or hold any of it on commission; that the insurance on goods held in trust was an insurance only for the benefit of the owners of the cotton; and that evidence of an intention to effect the insurance for the benefit of one who was not the owner of the goods was inadmissible, because it would contradict the policy.

But we think the positions taken on behalf of the defendant are not sound. The title to cotton in the temporary custody of a bailee for compression, for which receipts or bills of lading have been given, is manifestly changing hands constantly. The language of the present policy, insuring cotton "their own or held by them in trust or on commission," accommodates such a state of things. In the present case, the insurance was really taken out by the railroad companies, and that fact was well known to the agents of the defendant at the time the policy was issued. The railroad companies had an insurable interest in the cotton, and to that extent were the owners of the cotton, which was held in trust for them by the plaintiff. Evidence of their ownership of the cotton was admissible. Home Ins. Co. v. Balt. Warehouse Co., 93 U. S. 527, 542.

The policy covered all the cotton which was placed in the hands of the plaintiff by those companies. It was lawful for the plaintiff to insure in its own name goods held in trust by it, and it can recover for their entire value, holding the excess over its own interest in them for the benefit of those who have entrusted the goods to it. DeForest v. Fulton Fire Ins. Co., 1 Hall, 94; Home Ins. Co. v. Balt. Warehouse Co., 93 U. S. 527, 543; Stillwell v. Staples, 19 N. Y. 401; Waring v. Indemnity Fire Ins. Co., 45 N. Y. 606; Waters v. Monarch Fire Ass. Co., 5 El. & Bl. 870; Siter v. Morrs, 13 Penn. St.