157 F.2d 3 (2nd Cir. 1946), 297, Baker Castor Oil Co. v. Insurance Co. of North Amer.

Citation157 F.2d 3
Docket Number20221.,297
Date05 August 1946
PartiesBAKER CASTOR OIL CO. v. INSURANCE CO. OF NORTH AMERICA.
CourtU.S. Court of Appeals — Second Circuit

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157 F.2d 3 (2nd Cir. 1946)

BAKER CASTOR OIL CO.

v.

INSURANCE CO. OF NORTH AMERICA.

Nos. 297, 20221.

United States Court of Appeals, Second Circuit.

August 5, 1946

Forrest E. Single, of New York City (David S. Jackson, of Buffalo, N.Y., of counsel), for appellant.

Bigham, Englar, Jones & Houston, of New York City (D. Roger Englar, Martin Detels, and Charles W. Harvey, all of New York City, of counsel), for appellee.

John F. X. McGohey, U.S. Atty., of New York City (Edward L. Smith, Sp. Asst. to the Atty. Gen., and Dudley C. Smith, Insurance Counsel, War Shipping Administration, and Eugene F. Russell, Jr., Sp. Atty., Department of Justice, both of New York City, of counsel), an amicus curiae.

Before AUGUSTUS N. HAND, CHASE, and CLARK, Circuit Judges.

CHASE, Circuit Judge.

In 1941, before the United States was at war, Lloyd Brasileiro, a department of the government of Brazil and the owner of three vessels here involved, the Commandante Pessoa, the Jaboatao, and the Lesteloide, applied to the United States Maritime Commission 1 for and received 'warrants for its vessels. A shipowner receiving such warrants obligated itself to adhere to the rules and regulations of the Commission, including the routes and voyages which its vessels should undertake, and in return was entitled, among other benefits, to priority for facilities for loading and discharging cargo and for the procurement of bunker fuel or coal. 50 U.S.C.A.Appendix, § 1283.

Early in 1942, the plaintiff-appellant shipped 44, 967 bags of castor beans on the three named vessels, the bills of lading naming New York as the port of discharge but broad liberties were reserved to the carrier

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to proceed to and terminate the voyage at some other port in order to avoid war perils. This cargo was insured by the plaintiff with the defendant under two open policies, one of marine insurance, the other of war risk insurance which covered only while the cargo was aboard the overseas vessels from the port of loading in Brazil to the port of discharge in the United States. This latter policy, which is the only one sued on, provided:

'I. This insurance is only against the risks of capture, seizure, destruction or damage by men of war, piracy, takings at sea, arrests, restraints and detainments and other warlike operations and acts of kings, princes and peoples in prosecution of hostilities or in the application of sanctions under international agreements, whether before or after declaration of war and whether by a belligerent or otherwise, including factions engaged in civil war, revolution, rebellion or insurrection, or civil strife arising therefrom, and including the risks of aerial bombardment, floating or stationary mines and stray or derelict torpedoes; but excluding claims for delay, deterioration and/or loss of market, warranted not to abandon (on any ground other than physical damage to ship or cargo) until after condemnation of the property insured. Also warranted not to abandon in case of blockade, and free from any claims for loss or expense in consequence of blockade or of any attempt to evade blockade; but in the event of blockade, to be at liberty to proceed to an open port and there end the voyage.'

After the castor beans had been delivered to the carrier and the bills of lading issued therefor, Lloyd Brasileiro, because of recent sinkings of Brazilian ships by German submarines, ordered all its vessels into port pending arrangements for convoys to protect them from the menace of those submarines in the Atlantic. The owner's general agent in the United States then applied to the Wartime Insurance Committee of the War Shipping...

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