GUARANTEE CO. V. MECHANICS' SAV. BANK & TRUST CO.
by a mortgage given by the company, nor indirectly by a contract between the company and a third party for tlle erection of buildings or other works of original construction."
The facts of that case afford ground for contending with quite as much reason as in the case now under consideration that the labor for which compensation was claimed should be classed as work necessary in operation, but in the opinion of the court words seem to have been carefully selected to include all structures and additions made after the road had been put in operation in the same category as the original main line of railway, and the broad rule laid down in the sentence above quoted is just as applicable to this case as to the one in which the decision was made. I rest my decision upon the authority of that case.
GUARANTEE CO. OF NORTH AMERICA v. MECHANIOS' SAV. BANK & TRUST CO.
(Circuit Court of Appeals, Sixth Circuit. No. 349.
July 6, 1897.)
On Petition for Rehearing. The opinion on the original hearing is reported in 80 Fed. 766. Reargued before TAFT and LURTON, Circuit Judges, and HA¥MOND,J. HAMMOND, J. We have carefully considered the petition for rehearing filed by the appellant in this case, which is overruled. It only presents again for rehearing questions that have been fully and thoroughly considered by the court, and which need no further attention from it. It is only asking for a reargument of what has already been fully argued and decided. There is one matter, however, which requires our attention, relating to a request by counsel of the misquotation for a correction of the opinion in the of the language of the teller's bond in the brief of counsel for the appellant. Of course, not the least imputation was intended of improper or unfair misquotation by counsel. . The opinion states that it was "by manifest misprision," which language was deemed. sufficient to gnard against the possibility of any such imputation. Counsel for the appellee, in his brief, while treating of this matter, and at the argument, most thoroughly disclaimed any intention of suggesting even such a thing as an improper misquotation by counsel, and the court now directs, through profound respect for the sensitiveness of learned counsel on this subject, that this memorandum by the court shall be filed as an addendum to the original opinion, to go with it into the records and the books. It goes without saying that counsel for the appellant are incapable of any such offense, and, indeed, as now appears by the certificate of the clerk of the court, it was not a misquotation at all. The trouble arose from an error in transcribing the record. The bond of the teller in fact contains the precise language as quoted by counsel for the appellant, but in transcribing it into the record in some way the words upon which the
corttl'OVerlilY turried were hift out of the bond as it appeared in the record. It is now stated that there was a stipulation by Gounsel cor· recting the error of the record, and restoring- those words to the. bond, but this stipulation was never until now called to the attention of the writer of the opinion. It is not now.in the record as it came to his hlJ.nds. As fie recollects the argument, it proceeded on the same line of aSlilumption that counsel fortheappellaIlJ had ,.mistakenly quoted the bond in his brief, but Munsel then thought he was correct in his quotation and' the matter would be looked into. No further attention being called toitl it passed out of the mind of the writer of the . But, taking the actuallauguage of the bond as it now appears, we are of opinion that it should not change the result which we reached, aud our judgment is the same now as at the time the original opinion was filed upon this point. Petition overrnled.
HARTFORD FIRE INS. CO. et al. v. PEEBLES' HOTEL CO. (Circuit Court ot Appeals, Sixth Circuit. October 5, 1897.)
FIRE INSURANCE-POLICIES IN SEVERAL COMPANIES-ELECTION TO REPAIRACTION FOR DA:IUGES-PARTJES. ,
The P. H. Co. insured its building in several fire insurance companies. The policies were for distinct sums, and constituted separate contracts. Each policy contained the usual clause reqUiring an apportionment of loss between all the insurers, and gave an option to the insurer to repair or rebuild. A partial loss occurred, and all the companies, by a joint notice. elected to repair and rebuild. After the work was completed, the assured brought an actionagainst the companies jointly, alleging breach of contract, in that neither materials nor workmanship was up to standard, and recovered a joint judgment against them. Upon the question of misjoinder ot parties defendant, hela, that the Intent to jointly repair and rebUild, as indicated by the notice and subsequent joining In the work, operated to make the obligation to do so joint or several, at the option of the assured.
Held, further, that the prorating clause !had no bearing upon the liability ot the companies to the assured when sued for a breach of contract to re-
SAME-EFFECT 0]' PRORATING CLAUSE.
pair or rebulld.
SAME-MEASURE OF DAMAGES.
Held" further, that the amount ot money indemnity stipulated to be paid Under the alternative clause of the policies ceased to be any standard for the measure of damages resulting from breach of the rebUilding agreement.
Held, further, that, atter election by an insurer under such a policy to repair or rebuild, the measure of damages 1s the cost of repairing or reo building where there has been a total failure, or the difference between the work as done and its value it done according to tlle standard of that existing before the fire.
In Error to the Oircuit Court of the United States for the Eastern District of Tennessee. This was au action at law by the Peebles' Hotel Company against the Hartford Fire Insurance Oompany, the Phcenix Insurance Oom· pany of Hartford, the Americau Fire Insurance Company, the Virginia Fire & Marine Insurance Oompany. the Georgia Home Insur-
HARTFORD FIRE INS. CO. V. PEEBLES' HOTEL CO.
ance Company, the Lancashire Insurance Company, and the Royal Insurance Company, to recover damages alleged to have resulted from the failure of defendants to employ suitable workmanship and materials in repairing a building damaged by fire, the defendants having elected to repair under provisions contained in their policies respectively. In the circuit court there was a verdict and judgment against all the companies in the sum of $16,000, and the defendants sued out this writ of error. Lewis Shepherd and Wm. L. Frierson, for plaintiffs in error. Dickey & Peeples and Brown & Spurlock, for defendant in error. Before HARLAN, Circuit Justice, and TAFT and LURTON, Circuit Judges. LURTON, Circuit Judge. An hotel building owned by the de· fendant in error was insured in several fire insurance companies for a sum aggregating $38,500. Each policy was for a distinct sum, and constituted a separate contract, though each contract contained the usual clause requiring an apportionment of loss between all the insurers. While this concurrent insurance was in force, an acci· dental fire occurred, by which the property was partially destroyed. There was disagreement as to the amount of the loss, and an inef· fectual effort at settlement by arbitration. Each policy contained a provision under which the insurer might, at its option, repair or rebuild upon electing to do so within a prescribed time after receipt of proofs of loss. Availing themselves of this option, the several companies jointly gave written notice in this language:
"Peebles' Hotel Co., City-Gentlemen: Owing to the fact that the appraisers originally chosen to appraise the loss and damage on your hotel building, at the corner of Chestnut and carter streets, Chattanooga, Tenn., have failed to come to any agreement as to the amount of loss and damage, and in view of the fact that your company refused to go into any new appraisement with appraisers other than those originally chosen, we are now compelled to avail ourselves of the privilege granted by the conditions of our policies to repair and rebuild your building the same as before the fire, and you will please accept this as notice of our intention to repair and rebuild. We therefore call upon you for plans and specifications to be furnished us for the use of the contractor whom we shall elect; and, in order that this business may be facilitated and the work put under way at the earliest day practicable, we beg to suggest that these verified plans and specifications of the building, as it stood the day of the fire, be furnished within a reasonable time from this date. We reserve the right, if the plans herein called for are not furnished within a reasonable time, to proceed with the reinstatement of the building with such material, work, and labor as is shown by the portions of the building still standing."
Plans and specifications were furnished, and a contract entered into by the companies jointly for the restoration of the building. When the contractor had completed his work, joint notice was given by the insurers of the completion of the building. The defendant in error thereupon brought this action against the insurers jointly, alleging a breach of contract to rebuild and restore the building, upon the ground that neither the materials used nor the workman. ship was up to the standard of that in the damaged building. A demurrer based upon an alleged misjoinder of parties defendant was overruled,. with leave to raise the same question by plea.
82 FEDERAL REPORTER..
Were formed upon pleas :filed, and the cause submitted to a jury, who found for the defendant in error, and assessed damages at $16" 000, upon which verdict there was a joint judgment against all of the defendant companies. This writ of error has been sued out by each of the plaintiffs in error to reverse this judgment. The single question presented by the· assignments of error is that there was a misjoinder, and the contention is that the defend· , ant's right of action was against each company singly for a breach of its contract to repair and rebuild, and that, under the apportionment clause found in each policy, there could be no recovery against a particular company for any greater sum than the proportion which its policy bore to the whole amount of concurrent insurance. This is a purely technical objection. If all that is claimed be conceded, the plaintiffs in error, as between themselves, are liable to contribute. one to another for any excess payment over its proportion. Upon the otherhand, apportionment clause has any bearing when the option to rebuild has been exercised, innumerable difficulties would arise in the proper assessIllent of damages. Seven different suits would have beennecessary,fuus increasing the costs sevenfold. Different juries would assess the total damages at different amounts, and there WOUld; be no lmown method of apportioning the damages equitably among the insurers. The apportionment clause in each policy is substap,tially the same, and is in these words:
"This company shall not be liable under ,this policy for a greater proportion of any loss on the described property, or for loss by the expense of removal from premises endangered by fire, than tlle amount hereby insured shall bear to the whole insurance, whet'her valld or not, or by solvent or Insolvent Insurers, covering such property; and the extent of the appllcatlon of the In· surance under this policy, or of the contrlbu1.ion to be made by this company in case of loss, may be provided for by agreement or condition written hereon, or attached or appended hereto."
Olearly, this has no bearing upon the liability of a company when sued for a breach of its contract to repair or rebuild, and a plaintiff would be entitled to the full amount of his damages against such company, leaving it to seek contribution from any other company having insurance on the same property. Morrell v. Insurance 00., 33 N. Y. 429; Henderson v. Insurance 00., 48 La. Ann. 1176, 20 South. 658. Whether we regard an election to rebuild as the substitution of one contract for another, or as but another mode of paying the loss which has occurred, is immaterial; for upon such an election the contract becomes one for rebuilding or repairing, and is governed by the principles applicable to engagements of that kind where the consideration has been paid in advance. After such an election, no action will lie on the policy to recover the money indemnity therein stipulated. For a total failure to repair or or where the repairing or rebuilding does not result in the restoration of the building to a condition substantially like that existing :before the fire, the action is for a breach of the contract to repair or rebuild; and the measure of damages will be the cost of repairing or rebuilding where there has been a total failure, or the difference between the work as done and its value if done according to the
standard of that existing before the fire. The amount of money indemnity stipulated to be paid under the alternative clause of the policy ceases to be any standard for the measure of damages resulting from a breach of the rebuilQing agreement. May, Ins. (3d Ed.) §§ 423, 433, 433a; Morrell v. Insurance Co., 33 N. Y. 429; Beals v. Insurance 00., 36 N.Y. 522; Heilman v. Insurance 00.,75 N. Y. 7; Wynkoop v. Insurance 00., 91 N. Y. 478; Ostr. Ins. §§ 202, 203; Association v. Rosenthal, 108 Pa. St. 475. 1 Atl. 303; Stamps v. Insurance Co., 77 N. C. 209. The prorating clause contemplated a money indemnity. The option to rebuild affords the insurer a mode of adjustment whereby all extravagant claim of loss may be avoided. When once resorted to, the whole character of the contract is changed. The election is not to repair or rebuild a proportion of the building, but to rebuild or repair absolutely,so that the insured shall be indemnified in full. From this it must follow that the liability for a breach of the contract to repair or rebuild must be equally unlimited. This rule is conceded where there is but one insurer, and we see no reason why it is not equally applicable where several insurers, either severally or jointly, elect to rebuild. Of there can be but one satisfaction, and the right of contribution would protect the paying company from an undue proportion of the burden as between themselves. . Having settled these principles, we come to their application to the question of misjoinder. That the plaintiff below might have sued these insurers separately is most obvious from the singleness of the contract of insurance it had with each. This right t9 separately sue any company electing to rebuild could not be defeated by the action of the concurrent insurers in jointly electing to rebuild, nor by the subsequent act of joining in a contract to restore the premises. Btlt in the case before us the several companies manifested an intent to join in the restoration of the property. This was evidently desirable. No one of them was sufficiently interested to assume the entire burden of repairing as a mere means of avoiding its separate liability to pay a money indemnity. This intent to jointly repair and rebuild, as indicated by the notice of election and by the subsequent joining in the work of repairing and rebuilding, operated to make the obligation of repairing and rebuilding joint or several, at the option of the assured. "Wherever an obligation is undertaken by two or more, or a right given to two or more, it is the general presumption of law that it is a joint obligation or right. Words of express joinder are not necessary for this purpose; but, on the other hand, there should be words of severance, in order to produce a several responsibility or a several right. Whether the responsibility incurred is joint or several, or such that it is either joint or several at the election of the otber contracting party, depends (the rule above stated being kept in view) upon the terms of the contract, if they are express, and, when they are not express, upon the intention of the parties as gathered from all the circumstances of the case." 1 Pars. Cont. (6th Ed.) 11; 1 Beach, Cont. §§ 668, 671, 672. That such a joint undertaking to rebuild operates to
82 FEDF,lRAL REPORTER.
give the assured the right to m:;Lintain either a joint or several action cases; Morrell v. Insur· has been decided in. two ance. 00., N. Y. 429-447; Henderson v. Insurance Co., 48 La. Ann. 11J6, S,outh. 658. The case of Good v. Insurance Co., 43 Ohio St. 416, 2 N. E. 420, has been . .as holding the reverse of this posi· tipn.. The facts of that case peCUliar, and the opinion is not . ariauthority upon thier point. The conclusion we have rel,lched..meets the justice of this· case, and violates no settled rule of The judgment lsaccordingly affirmed.
PEIRCE v. CLAVIN. (Circuit Court of Appeals, Seventh Circuit. No. 382. October 4, 1897.)
An instruction making it the absolute dUty of the master to provide rea· sonable and .safe appliances, lnstead of to use reasonable care to furnish suCh appliances, is elToneous; but the errQr is harmless where the defect , complaIned of is so . obvious, and of such long standing, that a failure to remedy it was manifest negligence.
The loop handle of a railway switch lever became bent, so that when thrown over between· the tracks, .instead of falling between the ties, It rested on top of a tie, exposing the loop above the level thereof. Piaintiff was Injured by catching his foot in the loop while SWitching cars. He had been engaged about the yard as a member of a switching crew for six days, .but worked mainly at night, and in his testimony denied any knowledge of the defect. Held, that t:he court was not warranted in presuming, as matter of law, that he had knowledge of such defect, bUt, in view of his denial, should have submitted the question to the jury; especially as the attention of one engaged In switching trains Is properly fixed upon his work, so that he may well overlook defects in the roadbed. A servant, having absolute knowledge of an obvious defect existing during the entire time of his service, assumes the risks thereof, and is not merely required to exercise greater care to avoid danger from the defect.
OF RISK-KNOWI,EDGE OF DEFECT.
MASTER AND SERVANT...,.SAFE ApPLIANCES-iNSTRUCTIONS-HARMLESS ERROR
SAME·-AssUMPTION OF RISKS-PRESUMPTION OF KNOWLEDGE OF DEFECTS BY SERVANT.
In Error to the Oircuit Court of the United States for the Southern District of Illinois.
The defendant In en'or, William M. Clavin, brought action in trespass to recover of the plaintiff in error for damages sustained to his person on the 25th day of December, 1895. Clavin on the 4th day of June, 1895, entered the service of the receiver of the Toledo, St. Louis & Kansas City Railroad Company as a switchman in the railroad yards at Madison and East St. Louis, in the state of Illinois. He was not a member of any regular crew, but was an extra man, required to take the place of anyone of the crew who .might be absent from his work. A singie track led from the Madison yard to the East St. Louis yard, passing over a short trestle, beyond which, in the East St. Louis yard, delivery tracks to connecting roads, six In all, branched out from it to t:hesouth; the first of them being known as the "Belt" or "Wiggins' Ferry" . track,the other five being numbered from 1 to 5, consecutively. The switch stand and lever operating the switc'h to the Wiggins' Ferry track was situated at the west end of the trestle, nort'll of the lead or main track. This switch was worked by a , lever pivoted in the switch stand a short , a, ground switch. It was ; .