Snare & Triest Co. v. St. Paul Fire & Marine Ins. Co.

HOUGH, Circuit Judge (after stating the facts as above). [1] While under the jury’s verdict we must hold that the word “docked” meant “dry-docked,” we are of opinion that under the other circumstances shown no evidence was necessary to reach this conclusion. The acceptance of the application-closed the contract for insurance; when and as approved by the insurer or his agent it whs in substance a “binder” (Muller v. Globe, etc., Co., 246 F. 759, 159 C. C. A. 61), although no formal paper called a binder was in this case issued — a practice frequently followed. The word “docked,” when used in such an instrument, is not ambiguous, but clear and precise, and needs no parol evidence to explain it. Hearn v. New England, etc., Co., 3 Cliff. 318, Fed. Cas. No. 6301. The word meant “dry-docked.” [2] But the insurance contract was not permitted to remain in tire inchoate form of approved application or binder. A policy was issued and in .force before the beginning of the voyage upon which the scow was lost, and into that policy the phrase out of which this controversy arose was not carried; it never became a part of the policy of marine insurance upon which this action is brought. As was held in Dow v. Whetten, 8 Wend. 160: “The * * * application for insurance is admissible in evidence to show the intention of the parties. In a court of law it is proper evidence only to show a misrepresentation; in equity it may be used to correct the policy.” This being an action at law, the words in question must be treated as a representation only. A warranty, being a part of the policy, must be strictly and literally performed. Hazard v. New England, etc., Co., 8 Pet. 580, 8 L. Ed. 1043. But “a representation to the underwriters need only be substantially performed.” Pawson v. Watson, 2 Cowper, 785. See, also, Gow on Marine Insurance (3d Ed.) p. 266, and Hughes v. Union, etc., Co., 8 Wheat. 307, 5 L. Ed. 620. [3] In considering the effect of a representation upon a policy of [427] insurance, the first inquiry is as to its materiality, and the point has been “much considered whether the materiality of a misrepresentation or a concealment is a question of law which the court determines or a question of fact to be submitted to the jury.” Parson on Marine Insurance (Ed. of 1868) vol. 1, p. 463. But where the underwriter requests the information, which when given amounts to a representation, such answer to a specific question is conclusively presumed to be material to the risk. Kerr v. Union, etc., Co., 130 Fed. 415, 64 C. C. A. 617. [4] The evidence in this case is at least sufficiently full to warrant a jury in finding that the meaning and intent of this representation was that the scow to be insured would be “dry-docked and overhauled” before she started upon her voyage from Havana to Charleston in tow of the Barnett. Such a representation is promissory, and we adopt 1he ruling of Wallace, J., in Lunt v. Boston, etc., Co. (C. C.) 6 Fed. 562, that a substantial compliance with a promissory representation is sufficient to sustain a contract for marine insurance. [5] This brings us to the question whether an overhaul without dry-docking, which did as matter of fact make the scow entirely seaworthy, and which was as thorough an overhauling or reconditioning as could have been given to the vessel if put in dry dock, is or can be a substantial compliance with the admitted representation here in controversy. The exact question has not apparently been considered in any reported case; but, having regard to what was indicated as a substantial compliance in the Emit and Pawson decisions, supra, we feel justified in holding that there may be, and there is in this record, evidence tending to show that the scow was, at and before voyage commenced, substantially in the condition of seaworthiness indicated or defined by the phrase “to be dry-docked and overhauled.” We express no opinion on this matter of fact. Most modem suits on policies of marine insurance are in admiralty, and the court determines the facts as well as the law; but whether a compliance is substantial or not is a question of fact, and therefore at common law for the jury, subject always to such limitations as to materiality and relevancy of testimony as are by law imposed. Because the trial court refused to submit this question to the jury, we think error was committed. It may be noted that the point actually sent to the jury, viz. the authority of the brokers, seems to us entirely immaterial in this case. If the brokers exceeded their authority or departed therefrom, they may be liable as unfaithful agents; but, in respect of procuring this insurance, whatever they did within the usual wide authority of such brokers was done by Snare Company. Further, this defendant is only liable, in an action on a policy, on the particular kind of policy issued and in suit. That the broker got a document not wanted does not per se vary or increase the liability of the insurer. Judgment reversed, with costs, and new trial ordered.