Gelb v. Automobile Ins. Co. of Hartford, 141

• Decision Date: 21 June 1948
• Docket Number: No. 141,Docket 20847.,141
• Parties: GELB v. AUTOMOBILE INS. CO. OF HARTFORD, CONN.
• Court: U.S. Court of Appeals — Second Circuit

168 F.2d 774 (1948)

GELB v. AUTOMOBILE INS. CO. OF HARTFORD, CONN.

No. 141, Docket 20847.

Circuit Court of Appeals, Second Circuit.

June 21, 1948.

Purdy, Lamb & Catoggio, of New York City (Vincent A. Catoggio, of New York City, of counsel), for plaintiff-appellant.

Bigham, Englar, Jones & Houston, of New York City (Martin P. Detels and Daniel A. Sullivan, both of New York City, of counsel), for defendant-appellee.

Before AUGUSTUS N. HAND, CLARK and WOODBURY, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

This is an action brought in the New York Supreme Court for the total loss of the plaintiff's yacht and removed to the United States District Court. A jury rendered a verdict for the defendant. Judgment was entered thereon for the latter, from which the plaintiff appeals.

Plaintiff, who resided in New York, entered into an insurance contract with the defendant, a Connecticut corporation, and a combined Hull and P. & I. Policy for $8,000 was issued to him in New York on his 47 foot light steam yacht, The Edward James. The policy contained a "perils of the sea" clause, under which plaintiff seeks recovery for a total loss, and also a winter warranty stating: "Warranted that the said yacht shall be laid up and out of commission from November 1st, at noon, until May 1st, at noon."

On September 28, 1945, the boat was left by plaintiff at Miniford Yacht Yard, City Island, New York; she was never hauled out on shore but was left afloat moored to two dolphins about 500 feet off shore in open water until November 29th, when she sank. The plaintiff removed the ship's papers, compass and personal belongings and turned the keys over to the boat yard, but evidently such other things relating to laying up a yacht for the winter — as disconnecting or removing the batteries, removing water from the bilges, pumps, motors or tanks, and draining the gasoline — were not done. The night the yacht sank there were heavy seas and a northeaster, and there is evidence the yacht probably broke loose from her mooring and hit a barge tied up astern of her.

The defendant contends that it was relieved from any liability on the policy because of a breach of the warranty to lay the boat up and out of commission by plaintiff's failure to haul her up on shore or to perform other customary acts in storing the boat for the winter which we have mentioned. The defendant offered evidence in support of its defenses tending to establish a custom or practice to take the foregoing steps in laying up a boat of the type of the Edward James for the winter. Such evidence to interpret the meaning of a term used in a contract is undoubtedly competent. Parties are presumed to contract with reference to general customs and usages which explain the specific meaning of a term used and personal knowledge of the customary meaning need not be had by the parties to the contract. Williston on Contracts (Rev.Ed.) § 661; Couch on Insurance (1929 Ed.) § 192. Moreover where, as in the present case, such meaning of a phrase in a marine policy is known to the broker, who is an agent for the insured, it is sufficient to bind the latter. Connecticut Fire Ins. Co. v. Davison Chemical Corporation, D.C.Md. 54 F.Supp. 2; Eagle Star & British Dominions v. Tadlock, D. C.S.D. Calif., 22 F.Supp. 545, 548, affirmed sub nom. Walsh v. Tadlock, 9 Cir., 104 F.2d 131, certiorari denied 308 U.S. 584, 60 S.Ct. 107, 84 L.Ed. 489.

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