(Oircuit Oourt,]C. V.Michigan. December
1" IxSURANOE-C)ON'rRACT TO INSURB., ,, , , , A promise to insure, made by one whose business is to Insure; is performed by issuing a policy., A like promiSe, make 'by one whose business is no" "0 insure, is performed by "he promisor procuring a polioy in some responsible oompany to "he full insurable value of the property. ,,' , S. BhiB-AGREEMENT' BY CURlEtt, 'l'O IxstmB. , ,HElUC8, where coll1PAllY oarrya cert\lol.noargo' and to in, su,re "he same, 110 was heZd 00 have, subs"antially satisfied its obligation by causing the oargotO'be insured ..o the full amount of the loss & 'BllIE-EsToPPEL. " , , '. certain pf raJis to the Erie Railroad, to carry to Buffalo and forward thence to DuluthJjy water; ,Defendant contracted with the agen" of "he road'at' New York 100 carrY'theJl:l from Buffalo to Duluth, and to insure "hem. :I"procurell certifioates torbe .isBlled, and deposit;;d them with the agent ""of the road a", ButfalOl,ofwhom it received ..lie cargo, but had no d.irecUealingwith tbe plaintiff. Held. tna..'..hereQeiptahd retention of these oertiftcate8by'the agent of "he road, wi"hout obj8QtiOn, from obj8QtiUi to "he form of " . the policies or the amoun" of theinsurance. (SvUab'U8 by tM Oowrt.) " ' "
This was . tQ daIllages for the a r.argo of steel rllils, wbil}h the defendant to carry from Buffalotq"Spperior Cjty,Wis., andJo insure the perils of tp.e,sea. The first, count of the declaration averred that the defendant pr9misedllonq with the pla,iIlt,Uf to carry said rp.ils :stiffalo to Superior. City, .and al.so· tq the safe ofthe rlJ-ils. as aforesaid against all o(the seai 'agreement, on qr a:bout:Novempf:lr the Buffalo '\'riththe said cargo of steel rails;. and before Superior City was. . bwnt and sunk, and her said thereby, washst, or damaged; whereby defendant became mdebted and liable 1;0 pay the plaintiff the amount of such loss. The second averred a parol pronlise with the plaintiff to carry the rails and also to procure insurance for the safe carriage of the rails, to their full value, against perils of the sea. Breach, that the Northerner was burnt and sunk, whereby her cargo was lost and destroyed i that the defendant failed to procure insurance to the full value of said steel rails, according to its said agreement; whereby defendant became indebted to the plaintiffin the sum of $5,000. At the request of the parties the court found the following facts: (1) Plaintiff is a manufacturer of steell'ails, doing business at Scranton, in the state of Pennsylvania. (2) Defendant is a common carrier of merchandise between ports upon the Great Lakes, and is the owner and proprietor of the steamer Northerner. (3) Early in September, 1886, plaintiff, which had sold a large amount of rails to the Northern Pacific Railroad Company, deliverable at Duluth, Minn.· and Superior City, Wis., made application to John S.· Hammond, general freight agent of the New York, Lake Erie &:; Western Railroad, at New York. for a rate on 2,500 tons of steel rails to be shipped from Scranton to Superior City. He named a rate from Scranton to Buffalo, delivered on the docks of
SCRANTON STEEL CO.
ttieroad. 'Abou,t the 'Ssme'tiinEl 'Capk Eber Wardi the defen<lant, lfne,dalled upon Mr. Hammond, and agreed upon 'a ratQ, of two dollars per ton from .Buffalo to Superior City, and he (W3fd)wastro insure the the Ward did ,not knoW' then, nor at the time ,ot theJ08s, to W!lOID, the rails belonged. '.. , , ; ' (4) It is the custom, for managers and agents' of transportation nponthelakes to take out policies of insurance in responsible <:lOmpanies, l'u,n-, ning to,thems1>lves as agents, for account of whom it tnayconcern. and cov-; erlngallsuch cargoes astheircustomets may desire to h'a:ve, insured. Upon of any such cargoes the agent isaueB'acertificate payable tQ him-, stllffortbe benefit of whom it tnayconcern. specifying the cargo, the amQllnt, insured, the name of vessel, and the 'port from and to which it is to be cllorried. In purSuance of such custom, the British·Amedca .AsS'uranceCompany,c;m May 12,1886. Issued to Capt. Ward, the defendant's manager, an open polley, a copy bfwhich is hereto attached. 1 (5) The first shipment under the contract with Hammond was made Octod, .
BRITISH-AMERICA. Oo.,OY TORONTO, ONTARIO.
By this poliCy of insurance; on account of Eber Ward, Ag't, ,Foraccount,!lf, w:hom it may concern: ' , Do make insurance, and c,ausa the several persons indorsed thereon, or in book attaChed hereto, to be insured,upoua,ll kinds of lawful gOods, waresjmerohandise; and produce, laden on board the goOd vessel or vessels, boat or boats, railroad or carriage, lost or not lost, at and from ports and places, to ports and places, on a lawful and regular route and voyage, for the several amounts, and at the rates as herein indorsed, subject to the conditions of this policv, or of any contract proposition covered by this polioy, according to their true intent and meaning. Beginning the adventure upon the said property from and immediately following the thereof, at the port or place named in this indorsement, and so shall continue and endure until the swue shall arrive and be safely landed at the port of destination, and not to exceed forty-eight houri! from the time of arrival, , Touching the adventures and perils which the said Britis!l.-Atnerica Assurance Company isOOntented to bear and take upon itself. they are of the lakes"rivers, canals, railtoads, fires, jettisons, and all other perils and misfol'tunes that have or shall come to the hurt, detriment, or damage of the said property, or any part thereof\ excepting all perils, losses, or plisfortuncs arising from the want of ordinary care ana skill in loading and stoWing the cargo of or in navigating the said vessel, from theft, barratry. or robbery, or other legally excluded causes. And, in case of loss, or misfortune, it shall, be lawful and necessary to and for the insured or insurer, their agents, factors. servants, and assigns. to sue, labor, and travel for, in, and about the defense, safeguard, and recovery of the said goods and merohandise, or any 'part thereof, without prejudice to this insurance; nor shall the acts of the insured, or Insurers, in recovering, saving, and preserving the property insured, in case of disaster. be considered a waiver or an acceptance of abandonment, nor as afIlrmingor denying any liability under this policy, but such acts shall be c;onsidered as done for the benefit of allooncerned, without prejudice to the rights of .either party; to the charges whereoftbesaid company will contribute to such proportlon as the sum herein insured bears to, the Whole value of the property sO insured. Moneys and bullion, promissory notes and other evidences of debt, books of account, writtenseeurities, deeds. or other evidences of title to property of any kind, are not covered by this policy, unless expressly defined as so insured. And, in case of loss, such loss shall be payable in thIrty days after satisfacto!'Y proof thereof. Proof of interest of assured in said property and adjustments shall be made and presented at the oftlce of this company; all sums owing by the assured to this company being first deducted or secured to the satisfaction of this company, before such loss shall be paid: Provided, always, and it is further hereby agreed, that if the said iusurer shall have made any other insurance upon tbeproperty aforesaid, prior in date to this policy, then the said British-America Assuranee Com.pany shall be answerable only for so much as the amount of such prior insuran(le may be lieficient towards fully ooveringtheproperty hereby insured; and the said British-America Assurance Company shlill return:the premium upon so much of the by them insured as they shall be by such pn,'or ,in.surance exonera,ted from. And.in!'aseo.f,any insura,nee upon said date to this POlillY, the said AsSurance Company ahallUe1'tt1ihellll8 be anawe1'8bl.e :for the aqm by thllm
ber 7th, through Henry L. Chamberlain, of BuB'alo, tbe agent of tile defendant In its transportation business, and also the agent of capt. Ward in bis insurance business. The succeeding shipments were made October 12th. October 15th, October 19th, and November 3d. These shipments were all consigned to C. E. Bailey, engineer of the Eastern Minnesota Railroad, Superior, Wis., and all arrived in safety. Upon making such shipments in each case, Chamberlain made out a c6rtificllite of insurance, in the form hereto annexed, upon blanks signed by Ward asagent of the British-America Insurance Company, under the policy above named. These certificates were sent by him to O'Shea; agent of the New YOl'k,Lake Erie & Western Railroad at Buffalo, from whom the oonsignments were received. These certificates were retained by O'Shea. and were never sent to tbeplaintiff or to Hammond. (6) On November 8,1886, a shipment was made upon the propeller Northerner of 3571 tons of steel rails. The an nexed certificate was issued by Chamberlain upon thl! blank furnished by Ward for $11,797, and sent to O'Shea. This was at tbe rate of $33.33 per ton, the value of the iron belJJg $38. This certificate was retained by O'Shea until July, 1887, when it was delivered to the agent of the plaintiff. (7) In the course of the voyage tbrough Lake Erie, and about November 12th, the Northerner took fire, burned to the water's edge, and sanl,. Her cargo was subsequently raised and delivered. 'Of the entire 357t tons, 20 tons were worthless, and a total loss. Their value, at $38 per ton, was $760. The remaining 3371 tons were sold, at $25 pj:!r ton, to the Northern Pacific Railroad, and this was their value. ConsequentlY upon this portion of the shipment
hereto, without right to olaim contribution from suob subsequent insurers, and shall Il.OOOrdingly be entitled to retain, the premium by them received in the same mauner as if no SUbsequent insurance had been lDade. And, in oase of loss or damage to the property hereby insured. this oomJ;lany,' its agent or representative at or nearest the first port of discharge, shall have prompt notice of same, and shall have every oppor. tunity and facility' for ascertaining' the oause, extent, aud amount of damage, by persoual inspeotion, appraisal, or sale of the damaged property. It is also agreedtha.t the property be warranted by the insured free from any oharge, damage, or loss whioh may' arise in consequence of a seizure or.detentiou for or on acoouut of any illioit or prohIbited trade,or any trade in artioles of war. It is furthermore hereby expressly provided that no suit or action agaInst thIS oompanY for thElrecovery of any claim for10ss,01' damage. upon, under, or, by: virtue of this poiioy spitll be sustained in anyoourt of law or equity, unless such SUlt shall be oommenc,!d Within tbe term of twelve months next aftel" the loss or damage shall occur; and In oase any such suit or action shall be commenced, after the expiration of twelve montbs next after suoh loss or damage shall have occurred, the lapse of tilDe shall be taken and deelDed as conclusive evidence and conclusive defense against the validity of the claim' thereby so attempted to be enforced. It, is also agreea and understood that, in case of loss or damage under this policy, the assured, in claill1ingo and accepting paylDenttherefor, hereby, and by that act, assigns and transfers atl bis or their right to claim for such loss or damage, as against the car· r1:er, Or other perSOll or persons, town or corporation, or the United States or foreign governments, to this company, and topl'osecute therefor at the charge and for account of this company, if requested; to inure to their benefit, however, to the extent only of the'amount the loss or damage and attendant expenses of recovery, paid or incurred by said British-America AssuranceColl1panYj and any act of the insured, waiving or transferring, or tending to defeat or decrease, any such claim against the or sUch other person or persouR, town or corporation, or United States or foreign gov<lrn. ments, whether before or after the insul'ance was made under this policy, shall be a cancellation of the liability of this company, for or on acoount of the risk insured for which loss is' claimed. i' ',0 AM it is understood and agreed ,that this company or its agent shall have free acdess:, at all,reaSOllBbl,e hours, to t,he, books, accounts, instructions, and oorrespondence, of tneassured, OOntaining statements of, 01' which relate to, shipments and receipts cOvered by thia'policy; and thillIioliOylDa-;1be'declared void by either party, on giving a written notice to that eflect to thE! otihetoparty, but without prejudice to any shipment or liability made or inourred, prior'to'tlie servioe of such notice." "l Deck Oargoelu It is understood thatvroperty covered by this,poll?y ,on, l,ake ve. shall be under dee1£, UtlleslotherWise ape<lified ,and charged for in the In-
ICBANTON STEEL CO.
WARD'S DETROIT&LAEE SUPERIOR LINE.
tltere was a loss of $13 per ton, or $4,388.50. ,Plaintiff has thereby suffered damages in the amount of $5.148.50.
BRITISH·AMERICA ASSURANCE COMPANY, TORONTO. BUFFAW, Nov. 8,1886. . c· This certifies that Eber Ward, manager, is insured under and sub: A 8 ject to conditions of lakp.-cargo policy No. - - - , in the sum r>l · eleven. thollsand seven hundred lind ninety-seven dollars on three hundred fitLy-seven and one-half tons steel rails, shipped on board of ti propeller Northerner. - - - , $11,797, at and from Buffalo to Superior, Wis. Loss. if any. payable to assured or order on return of ,.e. this certificate. This certificate is not valid unless countersigned by the authorized agent of the company at place of issue. C. W. ELPlIICKE & Co., General Agents. J. J. HIGMAN, Marine Manager. EBER WARD. Agent.
The foUowingis the certificate referred to in findings 5 and 6: No. 5,762. Lake Cargo. 811,797.
James a. Smith and John H. BisseU, for plaintiff. Dwight a. Rexford, for defendant.
BROWN, J. The first count in the declaration charges the defendant transportation company with having agreed to carry and to in8UT8.
dorBement thereo,n, and deck cargoeB are inBured against total loBS of packages only. The minimum rateB of Buch lOBS to make a claim shall be ten per cent., except salt. which Bhall be twenty per cent. of the whole number of packages inBured on deck, and in all cB.ses, on deck nBks, to be free from damage by wet, breakage, leakage, or ex. . posure. W81Tanted by the inBured free from any claim for lOBS or damage ariBing from civil commotion, seizure, detention, or the conBequenceB of any bo.stile act of the United States or foreign g9vernmentB; alBO from any 10sB or damage from piracy or letter of marque, or the acts of any government hOBtile to the United States. Warranted by the inBured free from any damage or injury, from dampneBs or frost, heating, Bweati.ng, Bteaming, change of flavor, or being spotted, discolored: musty, or mouldy, except cauBed by actual water contact with the article damaged, ana to be free from liability for leakage, on molaBBeB or other liquids, or, breakage of articles liable, to break from their own nature, unleBs occaBionedby the perils inBured against. .If .the voyage aforesaid shall have been begun, and Bhall have terminated. before the date of this policy, then there shall be no return of premium on account of such termination. No Bhipments to be considered as insured until approved and indorBed on book attached hereto, by EberWard, Ag't, the agelit of this company at Detroit, Mich. . : ThiB policy is SUbject to the uBageB and regulations of the port of New York in all matters of adjustment and settlement of losses and averageB not herein otherwiBe clearly specified and prOVided for, as may be Btated by a competent alid disinterested adjuBter ot marine losses, to be deBignated by the inBurerB; but no damage to be paid unless amounting to five per cent. It iB understood and agreed, as one of t.he conditionB under which thiB policy Is iBsued and indorBement lPade thereon, that, if the insurance is procured by any person or per'; sonB other than the assured; they Bhall be deemed the agent or agentB of the aBBured, and not of this company, in any and all tranBactionB relating to thiB insurance. And it is hereby nnderstood and agreed, by and between this. company and the 88-: Bured, that this policy: is made and. accepted in reference to the foregoing terms and conditionB, which are hereby declared to be a part of this contract, and are to be used' and reBorted to in order to determine the rights and obligations of the partieB hereto, in all cases not herein otherwiBe specially provided fpr in writing. .' In witnesB whereof the Assurance company have caused theBe preBl entB to be atteBted by their manager at Toronto. But thiB policy Bhall not be valid unless countersigned by C. W. Elphicke & Co., general agents of the British.America ASBuranceOompauy at Chicago, Ill. Attested: ' . ' . J. J. HIGJlU.N, Marine Manager. Countersigned at Chicago th1ll12,th day of May, 1886. '., ." ,.. C. W. ELPHICXE & Co., General Agents.
second: C9uJJd differsl' from its averment of agreemnt to carry and to procure imurance to the full value of the tails. Tlle'agreement was an of the Erie road, at New York, amt ,Wa.;rd, the manager of thede(llp',dant line. While the conversation is somewhat differently stated, by the,two witnesses. I am satisfied, and have foundas'a fact"tbat Ward agreed to carry the rails, and to insure them, at two donal'!! 'per ton. Themeanirig ofthosewo'rds, then, becomes a court.', Did Ward thereby intend that the traI.1S,P9rtation should insure these personally, or was iLth" i,ll,tention that he, actipg as agent for this line, should procure them to' be insured in some, responsible company? The authorities reebgnize 'a cleaT distinction between a contract of insurance and a to insure, itl the 'fact that the fOl'IIier is executed and the other is executory. 11\ the one case theaoti'Oh, i8'\t pon the contra!':t for the loss or damage sustained under the risk"whUe in the other the action is for a breach of the contract for not insuring, and the measure of recovery is the loss .8ustained thereby. The weight of authority is that a parol contract to insure will be enforced in equity even though the charter of the company requires its contracts of insurance to be in writing; the courts holding to a distiMtiotilbetween anexectltoryand executed contract, and that the chll.rterproVisibns'can only be held to apply to the latter. This was the construction given by the supreme court of the United States to a statute 'of Massachusetts in Insurance Co. v. Imurance Co., 19 How. 318. See,also, i'i/.8urance Co. 'V. S. 574; Sanborn v. Insurance Co., 16 Gray, 448; Ji'irBtBaptist Ohurch v. Insurance Co., 19 N. Y. 305; Wood, § 11; May l Ins. § 23. M9lilt aLthe cases in which the distinction is taken have arisen in actions· against fire insurance companies for failing to issue policies in which the'measure of damages is the same as if a policy had been issued. In such cases the courts would naturally interpret tb,e contract to insure 8.& a contract to issue a policy in the defendant company; but, where the promise is m!1de by a person or corporation wl::lOse is not to inSUre, the authorities indicate that it is satisfied by in responsible company to the value bf. the property lll,Suted. There IS no doubt that when a factor receives goods on com ission, with instructions to insure, he satll1 isfies those by procuring policies in a responsible company. Mechem, Ag. §§ 510, 1011. And it is difficult to see why a different cOI:\struction be givell to the receipt of goods under an agreement. to insure. Thus, in Johnsonv.Oampbell, 120 Mass. 449, it was held that a letter issued by a firriJ.,l)f, 90mmission merchants, inviting consignmentsof goods, and stating: that they" will be covered by insurance received in store," ,Q.idll.ot import that they were personally insurers of such goqds,'a'nd that the agreement was performed QY their obtaining reasonable aM proper insurance ,against fire. The court' observes: ;; .' ,- -i'.;" "The circular Issued by the firm of Johnson &; Co., inviting consignments of goods, does not import that they personally were to the insurers of such '. ,It is simply apl'omise that the goods shall be insured, or, goods
,;"jl,j",; _ "
co. t1. WARD'S DETROIT & LA:kE SUPERIOR LINE.
in the language of the circular, · shall be covered by insurance 88 soon as received in store.' A promise to insure is fulfilled by obtaining a reasonable and proper security against a contingent Joss. The .commission which they were to charge upon sales was. to compensate them for all their charges for guaranty, for effecting and maintaining insurance, and for certain incidental expenses, and services attendi ng the reception and care of propertj' that should be consigned to them."
In the caSe under consideration the promise was made by an incorporated navigation company whose business is to carry, but not to insure. Indeed, it is questiomtble whether a contract of insurance would not be beyond the scope of its powers. The evidence of custom establishes the fact that the managers of such companies provide themselves with ,what are termed "blank policies," running to themselves as agents,foraccount of whom it may concern; in pursuance of which they issue certificates upon all such cargoes as their customers may wish insured, deriving an incidental profit by the usual commission upon such certificates. Beyond this, the finding shows that four cargoes had previously been shipped under precisely the same circumstances; that similar certificates were .and deposited with O'Shea, and received by him, without .objection. To the argument that O'Shea was not the agent of the plaintiff to receive such certificates or to insure the cargo, it may be said that the cargo was intrusted to Hammond, acting as agent of the Erie road, to carry to Lake Superior and to insure; that neither Chamberlain nor Ward had any dealingswhatever with the plaintiff, and I think discharged their entire duty in the matter of insurancei by ing cerj;ificates, and delivering them to the party of whom they received the cargo. . The contracts to carry and to procure insurance were callyonecpntract, which wlls made with the Erie rdad, andplnintiff'has no right now to step in and say that he is not bound by its acts in that connection. We think the receipt and retention of these certificatespy O'Shea must be held to estop the plaintiff from. mak,ing any objection to the fElrtri·of the policy orto' the amount of the insUJ:llnce. _ Aside from this, however, it is not shown that the plaintiff's loss was not fully covered by an insurance of which he was entitled to take the benefit. Had the loss been total, there might have been some whether the obligation to insare would be satisfied by anything less than an insurance to the full insurable value of the property; but; as· thtl insurllnce was more than double the loss sustained, it is difficult to see how the plaintiff was prejudiced by failure to insure to its full value. The policy is in the usual form of cargo form which has been in use upon the lakes for 20 or 30 years,-"lthd the provision !lgainst suit after one -year is now so invuiable in insurallce the c,ourt certainly cannot takejudicilll riotice of the- fact that it is The same remark may be made with regard to the provision concerning. proofs OflOBS. Had these proo:ur been promptly made t as as the .plaintiff was informed of the loss, and suit begun withina:year, we see nothing in the way of a recovery. It is true that the certificate was issued in the name of "EberWard, Manager,"and the loss, if any, payable "to aBl3ured
or to "Eber Ward, Agentj" "for account ofwhom ittnayconcern j" and there is no question that. under the authorities, it may be'llhowIl whose interest was-intended to be insured, in the same mannerns'lf'the plaintiff's name had., been mentioned. '. Extrinsic evidence may always be tQ forthe purpose of ascertaining the interests intended to be covered. Lee v. Adsit, 37 N. Y. 86; Castner v. Insurance Co., 46 Mich. 15, 8 N. W. Rep. 554. A policy upon a cargo in the name of A., "on account of whom it may concern," or with other equivalent terms,will inure to tlte illterest'of t.he party for whom it was intended by A.; provided. he, at the thne of effecting the insurance, had the requisite authority from such parties, or the latter subsequently adopted his, ,a.ct, (Hoope:r v. llobinson, 98 U. S. 528;) and, if an agent prOCUre a.. policy of insurance 'in his, own name, either the agent or the pl'incjpal may sue thereon, (Waring v. Insurance Co., 45 N. Y. 611.) , From the above statement of facts we find, as a conclusiop. of law, that the defendant has performed the contract set forth by the plaintiff in his declaration, and is entitled to judgment.
(Oircuit Oourt, 'N. D.lzUnoiB. July 18, 1889.) ., .. ,
ctrsTOMS·Dt1'rfiI'll::...cLAsstPrOATtOlT-8lbN.,i>1l.B$lIBD. . , " with the hair together in pie\le' 18 inches Wide, and from 86 ,to 48 inches long, and i:1fleillndifeerently as rugs,_ mats, sleigh robes, and , overcoat trbntnitigs, are dutiable as "skins dressed and ftnlshed, "'under clause 461 of Heyl'. ,A1",I;1l.Ilgement of the Qustoms ,Act. of 1Sga, as unde.r clause 8780f s&ld'Ari;angBment, which to wool and woolen goods.
W. G. Ewing, U. S. Dist. Atty.jand G. H. HarriB, Asst. U. S. Atty., for defendant.
:BLODGETT,J. Plllintiffsimported a quantity of skins .dressed with the bair on, whioh were invoiced as "Ohinese goatskins. "They were tanned. so as to make the, skins soft and pliable, and consisted of sIIlall pieces of skin sewn together, so as to make parallelograms of about18 inches wide, and from 36 to 48 inches long. The collector assessed tbem for duty as "rugs," under clause 378 of ,HeyJ's Arrangement of the Customs Laws, at 40 per cent. ad valorem. The ,plaintiffs paid the duty so assessed un-der protest, claituing that they should have been assessed as "skins dressed and finished,"'etC., under clause 461 of Heyl, at a duty of 20 per cent.
:At LaW. Shuman &: Difteea, for plaintiffs.
'The proof shows that these goods are sold to some extent for the purpose of being used as floor rugs; that they are also sold for door mats
lB.eported by Louis Boisot, Jr., of the Chicago bar.