Alexander, Ramsay & Kerr v. NATIONAL UNION F. INS. CO.
| Decision Date | 19 June 1939 |
| Docket Number | No. 352.,352. |
| Citation | 104 F.2d 1006 |
| Parties | ALEXANDER, RAMSAY & KERR, Inc., v. NATIONAL UNION FIRE INS. CO. et al. |
| Court | U.S. Court of Appeals — Second Circuit |
Barber, Matters, Gay & Vander Clute, of New York City (Carl F. Vander Clute, of New York City, of counsel), for appellants.
Kirlin, Campbell, Hickox, Keating & McGrann, of New York City (Roger Siddall, of New York City, of counsel), for appellee.
Before L. HAND, CHASE, and PATTERSON, Circuit Judges.
The defendants in July, 1934, wrote policies insuring the plaintiff's dredge against fire. A fire broke out on the dredge in January, 1935, and it became a total loss. Prior to 1928 the dredge had been used to dig a drainage canal near the Everglades in the interior of Florida. Work having been suspended for lack of funds, the dredge was laid up in 1928 near Miles City, Florida, in a short spur off the canal, and there it remained idle until lost by fire. It had been expected that the dredge would be used to dig a connecting canal, but the plan was never realized. As the situation was, the dredge was more or less immobile; it could be moved only by dismantling or by its own digging. The policy of the National Union Fire Insurance Company contained a warranty, "Warranted confined to navigation of inland and coastwise waters of the United States", and a further warranty that the dredge was then "in good safety"; the policy also gave privilege to lay up. The policies of the other insurers contained a warranty, "Warranted confined to waters of the inland and coastwise waters of the United States of America," and a statement "Warranted same terms and conditions as and to follow the settlements National Union Fire Insurance Company." In insurers' parlance the National Union was the "leading company" and the others the "following companies".
The plaintiff brought the present action to recover on the policies, the complaint merely alleging issuance of the policies and loss of the dredge by fire. The defendants' answer set up as defenses breach of the warranty confining the dredge to inland and coastwise waters, breach of the warranty as to good safety, and concealment of facts material to the risk. The plaintiff then served an amended complaint, adding a cause of action for reformation of the policies; it alleged that the National Union knew of the dredge being laid up in the drainage canal and that if the location was a breach of the warranty, the warranty was inserted in the policies by mutual mistake and should be stricken from them
At the trial one Benfield, who placed the insurance in the plaintiff's behalf, testified that he had told Michel, the man in charge of the matter for the National Union, about the dredge, the location, the laying up and the hope that it would resume work, and had shown him an application for insurance on the dredge in 1930, in which full details concerning it were given. Michel, called by the defendants, denied having had any such talk with Benfield and denied having been shown the 1930 application. There was no evidence as to what had occurred when the insurance was placed with the other defendants. At the close of the proof the court denied the defendants' motion for directed verdict and submitted to the jury the following questions:
1. Was the plaintiff, through its representative Benfield, guilty of concealment of facts material to the risk?
2. Was the language of the warranty "Warranted confined to navigation of inland and coastwise waters of the United States" intended by the parties to prohibit the laying up of the dredge in such a place as she was at the issuance of the policy?
3. Was the dredge in good safety when the policy was issued?
4. Did the defendants know the location and circumstances surrounding the location of the dredge when the policies were issued?
The jury's answers having been in favor of the plaintiff as to each question, the court entered judgment for the plaintiff for the full amount of the policies, some $9,500 altogether.
The plaintiff made out a prima facie case when it showed issuance of the policies and loss by fire. The defendants take the position that their affirmative...
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