Genuine Panama Hat Works v. Webb

• Decision Date: 24 October 1929
• Citation: 36 F.2d 265
• Parties: GENUINE PANAMA HAT WORKS, Inc., v. WEBB et al.
• Court: U.S. District Court — Southern District of New York

36 F.2d 265 (1929)

GENUINE PANAMA HAT WORKS, Inc., v. WEBB et al.

District Court, S. D. New York.

October 24, 1929.

Goldstein & Goldstein, of New York City (S. S. Goldsmith, of New York City, of counsel), for plaintiff.

Cardozo & Nathan, of New York City (Michael H. Cardozo, Jr., and Aristotle Souval, both of New York City, of counsel), for defendant insurance companies.

Richards & Affeld, of New York City (S. S. Schweitzer, of New York City, of counsel), for defendant Webb.

WOOLSEY, District Judge.

The motion to remand is denied. The plaintiff is a corporation of the state of New York. The Concordia Fire Insurance Company of Milwaukee is a corporation of the state of Wisconsin. The Royal Insurance Company, Limited, of Liverpool, is a corporation existing under the laws of Great Britain. The defendant Webb, who is now alleged by the plaintiff to be the agent of each of the defendant insurance companies above named, is a citizen and resident of the state of New York.

When the plaintiff first brought this action in the New York Supreme Court for New York County, on or about September 3, 1925, Webb was the only defendant named, and it was claimed that he was the plaintiff's insurance broker. Thereafter, and about March, 1928, the New York Supreme Court, under the very salutary practice there in effect for the avoidance of multiplicity of actions, at the instance of the plaintiff's present attorneys, permitted the filing of an amended complaint, adding the insurance companies as parties.

The case was removed to this court by the insurance companies on or about May 28, 1928. The decision by this court herein, on September 24, 1928, denying a motion to dismiss the case as against Webb without prejudice to its renewal on the trial, has not any bearing on the question before me.¹

This action, as it is at present set forth in the amended complaint, sounds in contract. The underlying contention herein, as shown by the complaint, is that Webb was the agent of each defendant insurance company, was authorized to write fire insurance policies for each of them, to issue such policies, to make indorsements on and add riders to such policies, and to transfer the coverage of such policies from one location to another location.

It is alleged that the defendant Webb, acting thus as agent for each of the defendant insurance companies, issued to the plaintiff, a manufacturer of straw hats, two policies of fire insurance on its factory in Beacon, N. Y.; the policy of the Royal Insurance Company, Limited, being dated January 28, 1923, and the policy of the Concordia Fire Insurance Company being dated February 9, 1923; that plaintiff thereafter, having decided to transfer the location of its factory to another place in Beacon, N. Y., so advised Webb; that Webb and each of the defendants made an agreement with the plaintiff to transfer to his new factory the coverage of the policies above mentioned as of January 27, 1924; that, although due notice was given to the defendant Webb that he should effectuate such transfer under the said agreement with the plaintiff, he failed to do so; that the plaintiff moved to his new factory, and on January 27, 1924, a fire of unknown cause occurred there, and destroyed the plaintiff's new premises, together with the contents thereof.

For the loss thus suffered the plaintiff claims damages against the two defendant insurance companies in proportion to the amounts involved in their several insurance policies, and against Webb for the total amount claimed against the other two defendants. The gravamen of the complaint is contained in the last three paragraphs thereof and reads as follows:

"Fifteenth. That notwithstanding said agreement and said request made by plaintiff upon the above named defendants, the defendants herein negligently and carelessly, and in violation of their said agreement to procure a transfer of coverage under said policies of insurance while plaintiff's machinery, furniture and fixtures, equipment and merchandise stock was located in said Caswell Academy Building, wholly failed to procure said transfer of coverage either in whole or in part.

"Sixteenth. That the defendants represented to plaintiff that said transfer of coverage so requested by plaintiff had been duly procured, and that plaintiff relied upon said representation and did not procure any other or further insurance against loss by fire and/or water.

"Seventeenth. That by reason of the premises and solely because of the negligence, carelessness and breach of contract on the part of the defendants and each of them, and without any negligence or fault on the part of the plaintiff, plaintiff has been damaged in the sum of $16,810.84."

By such hermaphroditic allegations the plaintiff's attorneys apparently seek to infuse into this action an element of tort and have argued this motion on that basis. The allegation that a defendant negligently or carelessly failed to perform his contract does not convert what is really an action on a contract into an action...