St. Paul Fire & Marine Ins. Co. v. American Food Products Co.

• Decision Date: 09 September 1927
• Docket Number: No. 7634.,7634.
• Citation: 21 F.2d 733
• Parties: ST. PAUL FIRE & MARINE INS. CO. v. AMERICAN FOOD PRODUCTS CO.
• Court: U.S. Court of Appeals — Eighth Circuit

21 F.2d 733 (1927)

ST. PAUL FIRE & MARINE INS. CO. v. AMERICAN FOOD PRODUCTS CO.

No. 7634.

Circuit Court of Appeals, Eighth Circuit.

September 9, 1927.

D. Roger Englar, of New York City, and Thomas T. Fauntleroy, of St. Louis, Mo. (Bigham, Englar & Jones, of New York City, Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, Mo., and George S. Brengle, of New York City, on the brief), for plaintiff in error.

John M. Lee, of Chicago, Ill., and T. H. Caraway, of Jonesboro, Ark. (M. P. Huddleston, of Paragould, Ark., on the brief), for defendant in error.

Before WALTER H. SANBORN and BOOTH, Circuit Judges, and MILLER, District Judge.

BOOTH, Circuit Judge.

This is a writ of error to a judgment recovered on two policies and three certificates of marine insurance. The controversy grows out of a claim for damages sustained by Morris & Co. (predecessor in interest of defendant in error) on a shipment of frozen beef from New York to Gothenburg, Sweden, in the summer of 1919. For convenience the parties will be designated as below; plaintiff in error was defendant.

The shipment of beef was covered by a number of insurance policies; a fire occurred on shipboard during the voyage, damaging the beef; and, the parties having failed to adjust the claim, suits followed. Seventeen of such suits were brought in the state circuit court of Greene county of the state of Arkansas in the summer of 1923. Two of them were against plaintiff in error. All of the suits were removed to the United States District Court for the Eastern District of Arkansas. They were there consolidated as suit No. 257, entitled "Morris & Co. v. Globe & Rutgers Fire Insurance Company." An auditor was appointed by the court to hear evidence, make findings, and be prepared to testify. Later, by mutual agreement, the two cases against the present defendant were withdrawn from the consolidated suit, reconsolidated, and tried before the court and a jury.

Plaintiff in its complaint alleged the shipment of the meat, the insurance on the same in the amount of $919,488 (that being the valuation fixed in the policies), of which defendant carried $57,940, the occurrence of fire on board the ship, the resulting damage to the meat, the furnishing of proofs of loss, compliance with all the conditions of the insurance policy, the demand for payment, and the refusal. Defendant in its answer admitted the shipment, the insurance, and the fire on shipboard, and the receipt of certain documents purporting to support plaintiff's claim, but denied the sufficiency of the same, denied damage to the meat by reason of the fire, except to the extent of $28,331, denied the value of the meat was $919,488, and set up that any loss above the amount admitted in the answer was due to causes other than the fire.

On the trial it was admitted that there was no fraudulent over-valuation in the insurance policies. It was mutually agreed by the parties that, if the jury should find for plaintiff, it might find the total damage sustained, and that the court would apportion the damage under the numerous policies. The jury found a total damage of $382,511.32; whereupon the court entered judgment against defendant for its proportionate share thereof, amounting, with interest, to $30,686.23.

The specifications of error raise the following main questions: (1) Whether the court erred in denying defendant's motions (a) for a directed verdict in favor of defendant; (b) for a directed verdict in favor of plaintiff for the sum of $28,331. (2) Whether the court erred in admitting in evidence (a) the books of account kept by plaintiff, showing the sales of the meat and the expenses incident thereto; (b) the testimony of Brink relative to the books and vouchers showing the sales and expenses. (3) Whether the court erred in excluding the report of the auditor and his testimony relative thereto. (4) Whether the failure by plaintiff to prove that it had furnished proofs of loss to defendant precluded a recovery. (5) Whether the court erred in refusing to give to the jury the charges requested by defendant.

The Motions for Directed Verdicts.

At the outset it is contended by plaintiff that the motion for directed verdict in favor of defendant was properly denied, because it was a motion made at the close of all the evidence, on the ground that the evidence of plaintiff (instead of all the evidence) was not sufficient to support a verdict for plaintiff. We pass this contention by with the remark that the error in phraseology was a mere inadvertence, which misled neither the court nor counsel, and should have been disregarded, as it doubtless was. It thus becomes necessary for us to examine the transcript of the record containing the evidence. This transcript, consisting of some 1,800 pages, could by a little care and effort on the part of counsel have been reduced by one-third to one-half. We wish to express a most emphatic disapproval of the practice of dumping into the transcript of record great masses of irrelevant and immaterial matter.

A careful examination of the record has led us to the conclusion that there is substantial evidence tending to establish the following facts, although some of the evidence is in sharp conflict, either of a direct or indirect nature:

June 30, 1919, the steamship Ice King sailed from New York to Rotterdam and Gothenburg, having as part of its cargo 23,521 quartersides of frozen beef, weighing 1,427 tons, belonging to plaintiff and destined for Gothenburg. The Ice King was a refrigerated ship, and all of the meat was stowed in refrigerated compartments. Each compartment was refrigerated by its own independent coils. The meat was stowed in four compartments: No. 2 'tween decks, No. 2 lower hold, No. 4 'tween decks, No. 4 lower hold. The two holds were separated from each other by No. 3 hold, used as a coal bunker, and by the fire and engine room. No. 2 was forward of the coal bunker; No. 4 was aft of the engine room. Between the coal bunker and No. 2 hold was a steel or iron bulkhead. A similar bulkhead separated the engine room from No. 4 hold. These bulkheads were supposedly watertight and airtight.

While the ship was at Rotterdam, or shortly after it had left that port on its way to Gothenburg, via Newcastle, a fire was discovered in the coal bunker next to No. 2 hold. In order to extinguish the fire, the bunker was flooded, and while this was being done it was discovered that water was entering No. 2 hold. After the ship reached Gothenburg, the fire in the bunker again broke out, and the fire department of the city was called to extinguish it. The fire was sufficient to heat the bulkhead between the coal bunker and No. 2 hold red hot, and to char some of the woodwork and some of the meat in No. 2, though there was a considerable thickness of insulating material between the bulkhead and the woodwork. A period of about three weeks elapsed between the first discovery of the fire and the complete extinguishment of the same at Gothenburg.

Mr. Smith, Lloyd's agent at Gothenburg, was called upon to make a survey of the cargo. By agreement he was adopted as the agent of the insurance companies, and it was further agreed that he should handle the damaged cargo. He made three reports, at intervals covering more than a year, touching the condition of the cargo and the disposition of the same. The reports are in evidence. The meat was sold under his supervision through the sales department of Morris & Co., and the accounts were kept by the bookkeeping department of that company. Most of the meat was sold in Sweden. About 180 tons were shipped to Germany and sold there.

When the meat was unloaded from the ship, it was taken in refrigerator cars to four freezing establishments; one at Hallsberg, two at Gothenburg, and one at Kristianstadt. It was inspected at these freezers by official veterinarians. A small portion was found unfit for any use, and destroyed. Another comparatively small portion was sold as offal. The great bulk of it was found fit for human consumption, and was sold as such. It was found necessary, however, to recondition a considerable portion of it by washing, scraping, and trimming.

Papers purporting to be proofs of loss and adjustment of loss were furnished to the insurance companies by plaintiff; but settlement of the loss not having been made, the present suits above mentioned were commenced.

One of the main contentions of defendant is that it was vital to any recovery by plaintiff that there be introduced evidence (a) of the value of the meat in the absence of the damage insured against; (b) of the value of the meat in its damaged condition. It is further contended that the evidence wholly failed to prove either of these facts.

We cannot assent to the latter contention. It was the claim of plaintiff, and there was evidence tending to support it, that practically the whole of the meat destined for Gothenburg was damaged by the fire, or by the means used to extinguish the same; that the damage resulted from burning, partial thawing, discoloration, dirt, smoke, and coal dust. There was evidence tending to show that this damaged condition of the meat was due to the fire and the means used to extinguish the same. There was evidence tending to show that the meat had come from prime cattle; that it had passed inspection of the Board of Animal Industry of the United States before being shipped; that the agreed value of the meat at the time of shipment was $919,488. There was also evidence tending to show what sound, undamaged meat of the same character was worth in Gothenburg at the time the shipment arrived. There was also evidence tending to show what the meat in its damaged condition was worth and was sold for, and that the sales were made below the market price for sound beef, because of the damaged condition. Among the witnesses who testified relative to the foregoing matters were persons who saw the meat and the condition of the holds before the...