Fayerweather v. Phenix Ins. Co.

• Decision Date: 14 January 1890
• Citation: 23 N.E. 192,118 N.Y. 324
• Parties: FAYERWEATHER et al. v. PHENIX INS. CO.
• Court: New York Court of Appeals Court of Appeals

118 N.Y. 324

23 N.E. 192

FAYERWEATHER et al.

v.PHENIX INS. CO.¹

Court of Appeals of New York, Second Division.

Jan. 14, 1890.

Appeal from superior court of New York city, general term.

Action by Daniel B. Fayerweather and Henry S. Ladew against the Phenix Insurance Company. A judgment dismissing the complaint was affirmed by the general term of the superior court, and plaintiffs appeal.

William H. Arnoux, for appellants.

George A. Black, for respondent.

FOLLETT, C. J.

The plaintiffs were the owners of 211 bales of leather, which the Old Dominion Steam-Ship Company undertook to transport by its steamer Guyandotte from Norfolk, Va., to New York, and deliver to the owners. The vessel reached New York June 17, 1885, with the leather safe on board, and within 24 hours after arrival she sank at her dock through the negligence of the employes of the steamship company. By this accident the leather was injured, as it is agreed, to the plaintiffs' damage in the sum of $1,295.32. In considering this case the liability of the carrier to the owners of the leather for this loss will be assumed. The bill of lading under which the leather was shipped contained this provision: ‘It is further stipulated and agreed that in case of any loss, detriment, or damage to be sustained by any of the property herein receipted for during such transportation, whereby any legal liability or responsibility shall or may be incurred by the terms of this contract, that company alone shall be held answerable therefor in whose actual custody the same may be at the time of happening of such loss, detriment, or damage, and the carrier so liable shall have the full benefit of any insurance that may have been effected upon or on account of said goods.’ The defendant insured the plaintiffs against the loss sustained by them, by an open, time, marine policy, which contained these provisions: ‘In the event of loss, the assured agrees to subrogate to the insurers all their claims against the transporters of said merchandise, not exceeding the amount paid by said insurers. * * * In case of any agreement or act, past or future, by the insured, whereby any right of recovery of the insured, against any persons or corporations, is released or lost, which would, on acceptance of abandonment or payment of loss by this company, belong to this company, but for such agreement or act, or in case this insurance is made for the benefit of any carrier or bailee of the property insured other than the person named as insured, the company shall not be bound to pay any loss; but its right to retain or recover the premium shall not be affected.’ This action is prosecuted by the assured owners to recover from the insurer their loss so sustained; and it is defendant on the ground that the owners violated the provision of the contract of insurance above quoted by contracting with the carrier, without the insurer's knowledge, that the carrier, in case of liability for loss, should have the benefit of the insurance, and, in effect, that the insurer, on paying the owners' loss, should be deprived of its right to be subrogated to the owners' right of action against the carrier for injury to the leather. When goods in the lands of a common carrier for transportation are insured by the owner, and are subsequently lost or injured under circumstances rendering the carrier liable to the owner for the damages, and the insurer pays the loss to the owner, the insurer, in the absence of stipulations between the carrier and owner defeating the right, is entitled to be subrogated to the rights and remedies of the owner against the carrier. Hall v. Railroad Co., 13 Wall. 367;Insurance Co. v. Railway Co., 73 N. Y. 399; Sheld. Subr. § 229. But the struggle between carriers and insurers to escape the liability imposed...