Fidelity-Phenix Ins. Co. v. Chicago Title & Trust Co.

• Citation: 12 F.2d 573
• Decision Date: 10 April 1926
• Docket Number: No. 3662.,3662.
• Parties: FIDELITY-PHENIX INS. CO. et al. v. CHICAGO TITLE & TRUST CO.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

12 F.2d 573 (1926)

FIDELITY-PHENIX INS. CO. et al. v. CHICAGO TITLE & TRUST CO.

No. 3662.

Circuit Court of Appeals, Seventh Circuit.

April 10, 1926.

John S. Lord, George L. Wire and Charles L. Cobb, all of Chicago, Ill. (D. Roger Englar and Henry N. Longley, both of New York City, of counsel), for appellants.

Charles E. Kremer, of Chicago, Ill., for appellee.

Before ALSCHULER, PAGE, and ANDERSON, Circuit Judges.

ANDERSON, Circuit Judge.

Libel on a marine insurance policy issued by the appellants upon the steamer Norland.

The policy covered the period from September 8, 1922, to September 8, 1923. On November 12, 1922, while proceeding from Chicago to Milwaukee, partially loaded with freight, the steamer sprang a leak, the pumps gave out, and she went to the bottom — a total loss. The policy contained the following:

"Warranted passenger steamer.

"Warranted confined to Lake Michigan and tributaries but including trip from Boston, Mass., to Chicago and/or Milwaukee by a port or ports with privilege of stopover at Buffalo for the purpose of alterations."

The steamer was bought in New York in August, 1922, insured there, and brought to Chicago in October. The principal defense is a breach of the warranty that the steamer was a passenger steamer. In the view we take of this question it will not be necessary to notice other contentions. The rule is that a breach of an express warranty in a policy of insurance bars a recovery whether it caused the injury or not. Arnold on Marine Insurance and Average (10th Ed.) vol. 2, §§ 632, 633; 38 Corpus Juris, p. 1064. This warranty is an express warranty as to an existing fact. It is expressed in the body of the policy, written in the face of it, is part of the contract, and must be strictly and fully true or the policy cannot be enforced. The authorities hold that an express warranty is a condition precedent, the burden of which rests upon the assured.

"The terms of the policy constitute the measure of the insurer's liability, and, in order to recover, the assured must show himself within those terms. * * * The compliance of the assured with the terms of the contract is a condition precedent to the right of recovery." Imperial Fire Ins. Co. v. County of Coos, 151 U. S. 452, 14 S. Ct. 379, 38 L. Ed. 231; McLoon v. Commercial Mutual Ins. Co., 100 Mass. 472, 97 Am. Dec. 116, 1 Am. Rep. 129.

But the decision of this case does not turn upon where the burden of proof lies. The evidence upon the character of the steamer is all one way. The material facts as to her construction, equipment, and use are not disputed. At no time from her purchase in August, 1922, to the time when she sank was she used or licensed to carry passengers. From her arrival at Chicago she was licensed to and carried only freight. In outward appearance (a photograph of her appears in the record) she must have been constructed so as to carry some passengers. Many steamers on the Great Lakes carry both passengers and freight. Appellee insists she was a passenger steamer because she was equipped to carry passengers. After reciting the arrangements for the convenience and comfort of passengers, appellee in its brief says:

"She was therefore perfectly equipped, not only for day passengers or excursion passengers, but for carrying passengers on night trips. She had the staterooms, the cabins, and dining rooms for both sexes; every convenience, with boats and life preservers in sufficient number and capacity to care for the passengers."

This equipment, plus the picture, is the whole of the evidence upon which we are asked to hold that she was a passenger steamer. Witnesses on both sides were asked to say whether she was a passenger or freight steamer. Some said passenger, some said freight, and some said passenger and...