Schuyler v. Phœnix Insurance

Mayham, J. The plaintiff in his complaint seeks to recover in one of two causes of action set out and alleged therein: First, upon a policy of insurance whereby defendant insured the plaintiff in the sum of $4,200 against such perils of navigation in the Brie canal and Hudson river, upon a cargo of corn, as might arise between the 19th of November, 1887, and the conclusion of the voyage mentioned in such .policy, which was being shipped on the canal-boat H. D. Taft; alleging a loss on said policy, and charging a liability upon the defendant therefor. The second cause of action charged, in substance, the policy as in the first count, a loss, and a conversion of the cargo by the defendant. The answer contained, substantially, the following: (1) That the policy does not insure against damage by ice, and that the damage was done by ice; (2) that the risk terminated under the policy upon the day of the official closing of the canal, which occurred on the day of the loss; (3) that, under the policy, damage occasioned by want of ordinary care and skill is excepted from the risk, and that the loss was occasioned by want of ordinary care and skill; (4) justifies taking possession of the cargo under the terms of the policy; (5) by denials, puts in issue the other allegations of the complaint. The issue was tried by a referee, who, by his report, directed judgment dismissing the plaintiff’s complaint; and from the judgment entered upon that report the plaintiff appeals. The judgment roll, and the exceptions appearing thereon, constitute the appeal book in this appeal; no case and exceptions having been made herein. This court, on the appeal, must therefore assume that the facts are correctly found by the referee; and, if the conclusions of law are supported by the facts found, then.the judgment must be affirmed. Gardiner v. Schwab, 110 N. Y. 650, 17 N. E. Rep. 732; Tomlinson v. City of New York, 44 N. Y. 601; Burrows v. Dickinson, 22 N. E. Rep. 569. The referee found as facts that the plaintiff was the owner of the cargo of 8,000 bushels of corn shipped from Buffalo on the canal-boat H. D. Taft, on the Erie canal, bound from Albany; that on the 19th of November, 1887, the defendant, a duly-incorporated insurance company, wrote its policy on such cargo, insuring the plaintiff on said cargo in the sum of $4,200 against the adventures and perils of the seas, canals, rivers, and fires, and all other perils, losses, or misfortunes that should come or happen to the hurt, detriment, or damage of the said cargo on the voyage or trip aforesaid, excepting perils, losses, and misfortunes arising from or caused by ice, or from want of ordinary care and skill (sucli as is common to navigation) in landing or navigating such boat. Tile referee further found that it was also provided in the policy that, in case of loss or misfortune, it was the duty of those having such boat in charge to use the utmost diligence to save the cargo until some agent of the defendant should arrive, and, upon his arrival, to assist him in the care and saving of the property, and that neglect to do so should render the policy void; that there could be no abandonment of the subject insured; and that the acts of the insurers or their agents in recovering, saving, or disposing of the property insured thereby should not be considered as a waiver or acceptance of an abandonment, or as affirming or denying any liability under said policy, but that such acts should be considered as done for the benefit of all concerned. [207] without prejudice to the rights of either party. The referee also found that the policy did not cover any damage for ice; and that, if the voyage should be suspended or interrupted in consequence of ice for three consecutive days or more, the risk should cease at and from 12 o’clock at noon of the day the boat should be stopped by ice; and that in case the navigation of the canal should, during the trip, be closed officially while the boat should be on the canal, the risk under said policy should cease on the day the canal should be closed, and three days next succeeding such stoppage and closing should be allowed to discharge cargo; but that any presumption of the voyage during the same season, or the spring following, should not revoke the risk, or restore the liability of the defendant under said policy. The referee also found that the defendant, in and by said policy, undertook and agreed to make good and satisfy unto the said insured all such loss or damage on said cargo, so laden as aforesaid, not exceeding in amount the sum insured thereon, as should happen or arise from any of the aforesaid causes or casualties not excepted as aforesaid, and to pay the same within 60 days after notice and proof of the loss and interest therein should be made by the insured. The referee also found that the canal-boat, after the issuance of the policy, proceeded on its voyage with the cargo, and on the 1st day of December, 1887, readied Hoffman’s Ferry, 10 miles from Schenectady, and left that point for Schenectady about 3 p. m. of that day, not leaking, with the cargo dry; that just previous to that time the canal had been covered with ice from one and one-half to two inches thick, which had just before the starting of the boat from that point been broken to the width of twenty feet by the government ice-breaker, which had proceeded through the canal from Schenectady to the ferry, and returned to Schenectady in advance of the canal-boat Taft. The referee also found that the canal-boat was forced through the channel opened by the ice-breaker, in which the broken ice floated, the edges of which channel were jagged and uneven, and was also forced through unbroken ice over 100 yards immediately before arriving at the place where she finally stopped; that the ice througli which the boat was forced, cut and gouged out portions of the outside planks, and made a hole or opening therein at about the water-line thereof, through which water from the canal leaked into the boat; that the leakage commenced before the boat reached her final stoppage, and continued to leak until about 11 o’clock in the evening of the 1st of December, when water had accumulated therein to the depth of about 16 inches. The referee also finds that the water was taken from the canal where the boat lay and the breach repaired, but that the moistened corn commenced swelling, and by reason thereof the hull of said boat was burst, making a leak, through which the water of the canal entered said boat, wetting all of the cargo except 1,239 bushels. The referee further finds that on the 2d day of December the defendant’s agents and servants took possession of the boat and cargo, and removed the 1,239 bushels of dry corn, which they delivered to the plaintiff, who accepted the same; and on the 3d day of December, late in the afternoon, the defendant sold the remaining 6,761 bushels of wet corn lying in the boat at 32|- cents per bushel, which was the best price defendant could obtain for the same, and which amounted in the aggregate to $2,197.75. The referee also finds that the defendant paid over to the plaintiff the amount realized on the sale of the damaged corn, less certain charges claimed to be deducted as prorate freight, and expenses of saving and caring for the cargo. The referee also found as a fact that whatever the defendant did in caring for, saving, and selling the cargo was assumed by it to be done under and by virtue and in pursuance of the provisions of the policy, and for the benefit of all concerned. Upon these facts the referee found as conclusions of law: “That the defendant is not liable under the policy for the loss of the cargo; that the taking possession of the cargo after notification that said loss was caused by, and was in consequence of, ice, does not estop the defendant from availing himself of the defense that such loss [208] was caused by, and in consequence of, ice; that the provisions contained in the policy authorized and justified the sale of the wetted portion of said cargo by the defendant, as hereinbefore found, as the agent of the plaintiff, and for the benefit of all concerned; that the plaintiff failed to establish either cause of action set out in his complaint.” The plaintiff excepts to the findings of facts, but, as we have seen, there is no evidence before us, and we are forced to the conclusion that the evidence supports the findings of facts. The case on this appeal must therefore be disposed of upon the plaintiff’s exceptions to the referee’s conclusions of law upon the facts found, and the exceptions of the plaintiff to the refusals to find his proposed conclusions of law upon these facts. The plaintiff excepts to the. conclusions of law found by the referee, that the defendant is not estopped from denying its liability under the policy by taking possession of the cargo after beinginformed and notified that such loss had been caused by ice. As this policy expressly excepts the defendant from all liability from perils, loss, and misfortunes arising from ice, and as the referee has found that the ice through which the canal-boat passed, cut and gouged out portions of the outside planking, and made a hole or opening, through which the water from the canal leaked into the boat, thereby causing the injury to the cargo, the defendant would not, under the policy, be liable for such loss or injury unless it did some act amounting to a waiver of that condition, or, by its act in taking possession and selling the cargo, is estopped from denying its liability. The plaintiff insists, by taking possession of and selling the cargo with the notice or knowledge that the damage was by ice, it waived that exception, and became liable for all loss on the cargo. The general rule seems to be that if the underwriter proceeds to sell a vessel, even with an express protest against acceptance, and with a declaration that he does it for the benefit of the owners, his acts conclusively bind him. Peele v. Insurance Co., 3 Mason, 27-32; Phil. Ins. § 1693. But this rule has not, in any case to which our attention has been called, gone so far as to hold the insurers liable where, by the express terms of the policy, they were required, on authority, to take possession, as in this case. Here the policy provides: “Hor shall the acts of the insurers or their agents in recovering, saving, or disposing of the property thereby insured be considered a waiver or acceptance of an abandonment, nor as affirming or denying any liability under this policy; but such acts shall be considered as done for the benefit of all concerned, without prejudice to the rights of either party.” It is undoubtedly the duty of the court to give effect to this provision in the policy. If the contentions of the plaintiff were carried out to its legitimate sequence, it would put the insurers at their peril, if they undertook to interfere with the cargo before the alternate rights of the parties were determined; and, if they assumed to take possession of the vessel, they would thus be acknowledging their liability. Such a construction would effectually nullify this provision in the policy. We think the fair construction of this clause in the policy is to give the parties thereto the fullest opportunity to preserve the injured or imperiled property from further loss and destruction, without, by that act, fixing or settling the ultimate rights of the parties; leaving those rights to be adjusted after a full and fair examination into the circumstances of the loss. Of course, it cannot be urged, from this condition in the policy, that it makes the defendant perfectly lawless, and enables it wantonly or negligently to destroy the insured property, to the injury of the plaintiff; but the insurer may, under that clause, take possession of, and dispose of, and as in this case of perishable property, we think, sell the same, and not thereby waive the right to insist, on a further examination, that it was not liable under the policy. The plaintiff relies, in support of his contention, on Carr v. Insurance Co., 109 N. Y. 504, 17 N. E. Rep. 369. The policy in that case insured against “actual total loss only.” In this case the insurers took possession of a stranded vessel which was still [209] afloat, or it was possible to put her afloat, and contracted with a wrecking company to bring her to port, which the wrecking company did, and the underwriters refused to pay the salvage, for which she was sold under a decree in admiralty. It was held that by that act the insurers had made her an “actual total loss, ” and were liable on the policy. That case seems clearly distinguishable in principle from the one at bar. It was manifest in that case that the vessel was not an “actual total loss;” on the contrary, it was afloat. But the insurer taking control of her, and subjecting her to the expense of removal by the wrecking company, for which she was lost to the assured, as to him she became, by the act of the defendant, a “total loss,” and the company whs held liable. In Titus v. Insurance Co., 81 N. Y. 419, the court lays down the rule that if the company, after knowledge of the forfeiture, by any negotiations recognize the continued validity of the policy, or require the insured to do some act or incur some expense, the forfeiture is waived. But the facts found in this case do not show any such recognition of liability by the defendant. All it did, as appears from the findings, was to take care of and dispose of the property, as provided in the policy, “for the benefit of all concerned,” which was expressly declared in the policy not to be a waiver. A waiver cannot be inferred from silence. The company was not bound to do or say anything to make the forfeiture effectual. It may wait until the claim is made under the policy, and then allege the forfeiture in defense of a suit on the policy. Titus v. Insurance Co., 81 N. Y. 419. It can hardly be maintained, I think, by taking possession of the property for the benefit of all concerned, the defendant can be charged with importing into the contract a provision, in effect, insuring against damage by ice, when the policy expressly exempts the insurers from liability resulting from that cause. If there is any mistake or carelessness of the agent in holding this property, it is not available in an action to enforce this policy. We see no principle in the doctrine of estoppel which made the defendant liable for damage by ice, which is by the policy expressly exempted from the risk, simply because it took possession and disposed of this cargo for the benefit of all concerned, under the language of the policy. Sanders v. Cooper, 115 N. Y. 288, 22 N. E. Rep. 212. Bor do we think the defendant, under the findings and exceptions in this case, can be charged with a conversion of this cargo, or a wrongful retention of the same, under the second cause of action set out in the plaintiff’s complaint. The referee finds that it. was provided in the policy of insurance that, in case of loss or misfortune, it should be the duty of the captain and crew of the boat, or those having command, to use the utmost diligence and attention to save the property until some agent of the defendant should arrive, and, upon bis arrival, to assist him in the care and saving of the property, and that negligence so to do would render the policy void; that there could be no abandonment of the subject insured; and that the acts of the insurers or their agent in recovering, saving, or disposing of the property insured thereby should not be considered as a waiver or acceptance of an abandonment, or as affirming or denying any liability under said policy, but that such act should be considered as done for the benefit of all concerned, without prejudice to the rights of either party. The referee finds that the plaintiff was present when the defendant took and disposed of the cargo, and made no objections; and that whatever the defendant did in caring for, saving, and selling the cargo was assumed to be done by virtue and in pursuance of the provisions of the policy, and for the benefit of all concerned. It will be seen that the right and duty of the defendant to take and dispose of the cargo did not alone depend upon the defendant’s liability, as insurers, for the value of the cargo, but that right attached in case of loss or misfortune to the cargo. Thus, while the alternate rights and liabilities of the parties under the policy remained undetermined, the defendant was charged with the duty of recover [210] ing, saving, and disposing of the property insured for the benefit of all concerned. This clearly gave the defendant the right of possession, and under the exercise of that right he took possession of, and delivered to the plaintiff, the uninjured part of the cargo, which was accepted. The balance of the cargo the referee finds, and we think properly, the defendant sold under and in pursuance of the authority given in the policy of saving or disposing of the property, and that in doing that the defendant acted as the agent of the plaintiff. We find no error committed by the learned referee in his conclusions of law from the facts found. The judgment must therefore be affirmed, with costs. All concur.