193 F.2d 812 (4th Cir. 1952), 6338, Fidelity-Phenix Fire Ins. Co. of New York v. Pilot Freight Carriers, Inc.

Docket Nº:6338.
Citation:193 F.2d 812
Case Date:January 07, 1952
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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193 F.2d 812 (4th Cir. 1952)




No. 6338.

United States Court of Appeals, Fourth Circuit.

January 7, 1952

Argued Nov. 15, 1951.

Where driver of tractor-trailer, on approaching warehouse which was his destination, stopped tractor-trailer on side of street behind traffic in front of him without turning on signal devices, which would sound warning if trailer were moved or sealed doors were opened, and went across street to drink cup of coffee, and he returned to tractor-trailer and opened cab door and got in and, when he did so, he discovered a holdup man in cab with a pistol, and holdup man compelled him to drive truck to another section of city where driver was compelled to get into automobile in which he was held captive, loss of cigarettes from trailer was not covered by policy insuring carrier against loss of cargo by theft but providing that carrier would warrant not to leave tractor-trailer parked unattended without warning signal devices turned on.

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C. R. Wharton and Richard L. Wharton, Greensboro, N.C. (Gregory S. Rivkins, New York City, Wharton, Poteat & Wharton, Greensboro, N.C., and Hill, Rivkins & Middleton, New York City, on the brief), for appellant.

B. S. Womble, Winston-Salem, N.C., and C. T. Boyd, Greensboro, N.C. (W. M. York, Greensboro, N.C., C. W. Womble, Winston-Salem, N.C., York & Boyd, Greensboro, N.C., and Womble, Carlyle, Martin & Sandridge, Winston-Salem, N.C., on the brief), for appellee.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

This appeal is taken from a judgment in the amount of $49, 750 in favor of Pilot Freight Carriers, Inc., the Plaintiff in the District Court, in a suit against Fidelity-Phenix Fire Insurance Company of New York. The claim was based on damages caused by the theft of 630 cases of cigarettes belonging to R. J. Reynolds Tobacco Company and transmitted by the plaintiff, as a common carrier. The suit is on a cargo insurance policy which covered the legal liability of the assured carrier for the amount (not exceeding $49, 750) that it should be forced to pay for loss on shipments of goods from certain perils, including theft. The carrier has paid the Reynolds loss.

The question presented is whether the loss is covered by the policy which, with respect to theft, contains the following provisions:

'1. In consideration of the rate at which this policy is written, it is a condition precedent to the liability of the Insurer hereunder and to the effectiveness of this policy as respects theft coverage for vehicles, that trucks and trailers owned, hired or used by the Assured will be equipped with a Senior Babaco Alarm including Parker when more than 50% of the load consists of manufactured tobacco products, textiles, alcoholic beverages or any or all combined; that such Babaco Alarm System and Parker will be maintained in working order at all times, inspected and approved once each month by the Babaco Alarm Systems, Inc. and proper inspection certificates issued.

'2. It is also a condition precedent to the liability of the insurer hereunder and to the effectiveness of this Policy as respects theft coverage for vehicles, that all the Babaco equipment protecting the cargo compartment of each vehicle equipped as aforesaid shall be in the 'on' position while aforementioned merchandise is contained in said compartment, except with respect to any trailer which is actually being loaded, and/or unloaded and that while any trailer is being loaded and/or unloaded, at least one man shall be in actual attendance on the cargo compartment.

'3. It is further warranted by the Assured that the Babaco Alarm System on the cargo compartment of each and every truck or trailer transporting a load 50% or more of which consists of manufactured tobacco products, textiles, alcoholic beverages or any or all combined and covered hereunder shall be sealed by the Terminal Dispatcher or agents as designated below immediately after loading is completed and prior to the trailers leaving the loading terminal or shipping point, and unsealed by only the Terminal Dispatcher at Assured's regular terminals or by agents as designated below upon the arrival of said vehicles-the Babaco Alarm System to be sealed by means of the 'Sealed Load' key provided by the Babaco Alarm Systems, Inc.

'5. It is further warranted by the Assured that the Babaco Alarm System on the Cargo compartment of each trailer and the 'Parker' device on each trailer will be in the 'on' position when such vehicles are parked unattended, when loaded with commodities and in amounts stated above.

'6. The assured agrees, by acceptance of this policy, that the foregoing conditions precedent relate to matters material to the

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acceptance of the risk by the Insurer. Failure of the insured to comply with any of the foregoing conditions precedent in any instance shall render policy null and void as respects theft coverage for vehicles.'

The insured carrier is a North Carolina corporation with its principal office at Winston-Salem. The vehicle used by it in transporting the stolen freight was an enclosed trailer, approximately 30 to 32 feet in length, drawn by a separate motor tractor. Freight was loaded into the trailer through rear doors which could be closed and sealed. The trailer was equipped with the theft protection device, described in the policy and known as the Senior Babaco Alarm, consisting of two parts, the 'Sealed Load' alarm and the 'Parker' alarm. Both parts were controlled by a steel alarm box, 30 inches long, 10 inches wide and 12 inches deep, mounted beneath the body of the trailer on the right side, about midway between the front and the rear end. The box contained batteries and a loud siren alarm, and was operated by means of two keyhole switches, each having an 'on' and an 'off' position, one controlling the 'Sealed Load' alarm, and the other the 'Parker' alarm.


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