Hamblet v. City Ins Co.

• Decision Date: 13 July 1888
• Citation: 36 F. 118
• Parties: HAMBLET v. CITY INS. CO.
• Court: U.S. District Court — Western District of Pennsylvania

36 F. 118

HAMBLET v. CITY INS. CO.

United States District Court, W.D. Pennsylvania.

July 13, 1888

Knox &amp Reed, for libelant.

D. T Watson, for respondent.

ACHESON J.

This is a suit upon an alleged contract of insurance on the steam-boat De Smett. The libel presents the case in a twofold aspect; one of its paragraphs alleging that the contract was consummated by the issuing of a policy of insurance, and another paragraph stating the cause of action as resting upon an agreement to insure the vessel against marine risks upon the terms usually contained in the defendant's policies. The answer, while admitting that an application for insurance upon the De Smett was made to the defendant, and thereupon certain negotiations took place, denies that any contract of insurance, or any agreement to insure, was concluded or entered into; and, by way of further defense, the answer alleges that important and material facts were omitted from the application, and concealed from the defendant. The essential facts of the case are as follows: On the 15th of April, 1886, in consequence of a collision with one of the piers of the bridge spanning White river, three miles above Newport, Ark., the De Smett was very seriously injured and disabled. Nearly the whole of one side of the boat, including the wheel, was torn off, and her upper works were badly damaged. Such was the extent of the damage that the boat could not run at all. She was taken to a point on the west bank of White river, opposite Newport, and tied up for repairs. Her crew was discharged, and she was left in the custody of two watchmen. There she remained in this disabled condition, without master, officers, or crew, until the evening of June 12, 1886, when she was destroyed by fire. At that time no repairs had yet been made to the boat, but carpenters had been at work getting her ready therefor. The evidence shows that with the force at work it would have taken at least one month to complete the repairs. The boat's engines and pumps were not in working order at the time of the fire, and, if they had been, there was no one on board to run them. Shortly before June 7, 1886, application in behalf of Mrs. Josephine Harry, the owner of the De Smett for a line of insurance upon the boat, was made to Gilbert Raine, an insurance agent and broker at Memphis, Tenn. Raine, however, was not the agent of the defendant, the City Insurance Company of Pittsburgh. As an insurance broker, in a number of instances he had placed fire risks (but never a marine risk) in the defendant company. In no other respect or sense had he ever acted as agent for the defendant. In the several instances in which he had placed fire risks with the defendant, he deducted out of the premiums the usual broker's commissions. In the present case Raine's dealings, about to be mentioned, with the defendant, were altogether in the capacity of an insurance broker. At the time of the application to Raine for insurance on the De Smett, he knew that she had met with an accident, and was undergoing repairs, or was about to be repaired; but it is not clear that he was fully informed as to the extent of her disability, or knew exactly where she then was. On June 7, 1886, Raine mailed the following letter, which was received by the defendant in due course of the mail:

'MEMPHIS, TENN., June 7, 1886.

'City Ins. Co., Pittsburgh, Pa.-- DEAR SIRS: Inclosed please find survey of Str. 'De Smett,' on which I would like your line. She will run in White river, Ark.,-- the best steamer in the West,-- running to Memphis, of course. I will put my own Co.-- Phoenix of Brooklyn-- on the same rate. I can recommend your line. If acceptable, bind some, and advise me by wire, (day message,) & forms will be forwarded. Hull risk-- fire and marine. Ruling rate on White river 10. Capt. Harvy is an excellent man, and has been running in White river for a great many years. Yours truly,

'GILBERT RAINE, per GLASS.'

The survey, which was without date, transmitted in the above letter, purported to have been made upon an examination of the De Smett at Memphis, and contained a full and detailed description of the boat, her engines, hull, etc. It named her owner and master, and stated her value at $10,000, and asked for $5,000 insurance. It contained nothing whatever indicating that the boat was in a disabled condition, or laid up, or was undergoing repairs. The defendant had no information respecting the boat other than what appeared in the above letter and the accompanying survey. On the back of Raine's original letter of June 7, 1886, which is an exhibit in this case, there is the following memorandum:

'Gilbert Raine, Memphis, Tenn. Can bind five thousand on De Smett. Answer amount wanted here.

'JOHN R. GLONINGER, V.P., per W. G.'

W. M. Grace, an employe in the defendant's office, testifies that this memorandum is in his handwriting; but he remembers nothing whatever about it, and cannot state whether it is a copy of a telegram. Mr. Gloninger, who attended to this business for the defendant, died after this suit was brought, and before the libelant's evidence was closed. His testimony was never taken. Mr. Raine's attention was not called to this particular matter, and he did not testify that he received such message. There is no express evidence that such a message was sent. On June 9, 1886, Raine sent, and the defendant received, the following telegram:

'MEMPHIS, TENN., June 9, 1886.

'To John R. Gloninger, Vice Prest. City Ins. Co., Pgh.: Write fifteen hundred on the De Smett in the City. GILBERT RAINE.'

On June 12, 1886, Raine sent, and the defendant received, the following telegram:

'MEMPHIS, TENN., June 12, 1886.

'To City Ins. Co.: What is the matter with De Smett hull policy. Has it been mailed. Wire answer at once. GILBERT RAINE.'

This telegram was received at Pittsburgh at 1:44 o'clock P.M., but at what hour it was delivered to the defendant does not appear. On the same day, but at what hour does not appear, the defendant mailed at Pittsburgh the following letter, addressed to Gilbert Raine, at Memphis, Tenn.:

'PITTSBURGH, June 12, 1886.

'Gilbert Raine, Esq., Memphis, Tenn.-- DEAR SIR: We received your telegram to send policy of De Smett. As you stated you would send wording, we were waiting on it. We now send policy in response to your telegram. If it is incomplete or incorrect, return it for correction. Yours, Truly,

'JOHN R. GLONINGER, Vice Prest.'

Inclosed in this letter was the defendant's policy of insurance on the De Smett for $1,500, dated and purporting to have been executed June 12, 1886, but running from June 9th for one year, giving the boat 'permission to navigate the White river,' only. The policy contains the following, which is one of the usual clauses of the defendant's marine policies:

'And the assured also agrees that the vessel aforesaid is, and shall be, kept at all times during the continuance of this policy tight and sound, and her seams properly caulked, and sufficiently found in tackle and appurtenances thereto, and competently provided with master, officers, and crew, and in all other things and means necessary for the safe navigation thereof.'

On the same day (June 12th) Raine sent, and the defendant received the following telegram: 'MEMPHIS, TENN., June 12,...