Herr v. Underwriters at Lloyds of London

• Decision Date: 08 May 1951
• Docket Number: No. Sel. 5023.,Sel. 5023.
• Citation: 97 F. Supp. 379
• Parties: HERR et al. v. UNDERWRITERS AT LLOYDS OF LONDON.
• Court: U.S. District Court — District of Alaska

97 F. Supp. 379

HERR et al. v. UNDERWRITERS AT LLOYDS OF LONDON.

No. Sel. 5023.

United States District Court D. Alaska. Third Division.

May 8, 1951.

McCutcheon & Nesbett, Anchorage, Alaska, for plaintiffs.

Davis & Renfrew, Anchorage, Alaska, for defendant.

FOLTA, District Judge.

Plaintiffs seek to recover for the loss of an airplane under a policy insuring it for $6700, its full value, less $50 deductible, and depreciation at the rate or 20% per annum.

The policy, issued May 7, 1947, for one year, names the plaintiff "Dick Miller, doing business as the Seldovia Air Service", as the insured. The plaintiffs were partners doing business in that name at Seldovia, about 150 miles from Anchorage, and it appears to be uncontradicted that it was their intention that the policy should be issued in the names of both. The insurance was procured, contemporaneously with and as a part of the sale, by the seller of the plane, the Arnold Air Service of Anchorage, through Ed Coffey of Anchorage, an insurance broker. Title was reserved under a conditional sales contract, defendant's Exhibit "D", executed by both of the plaintiffs, in which they were named as the buyers. It was not shown how the omission of plaintiff Herr's name from the policy occurred, but since the plaintiffs were required under the conditional sales contract to pay the cost of insurance to the seller, it may be presumed that the omission was that of the Arnold Air Service or of Coffey, Neither Arnold nor Coffey, however, was produced as a witness and the failure to produce them was not accounted for at the trial.

Payments on the plane were completed September 15, 1947, on which date the plaintiff Herr bought Miller's interest in the partnership and sold the plane and other property, including the unexpired term of the insurance, to one Henington, under a conditional sales contract, defendant's Exhibit "A". Neither of these transactions was reported to the insurer and it is not contended that the insurer had any knowledge thereof, actual or constructive. More than $4000 had been paid on the purchase price by Henington when, on January 30, 1948, the plane disappeared from its ramp on the shore of Seldovia Harbor. Some time later a wing float, identified as from that type of plane, was brought to Seldovia and it was reported that it had washed ashore about 10 miles from Seldovia. The plaintiff testified that on several occasions after purchasing the plane he visited Anchorage and attempted to ascertain the whereabouts of the policy in order to examine its provisions, but that in each instance he was unable to do so owing to the absence of Arnold and, hence, knew nothing of the omission of his name from the policy until after the loss occurred.

Since the plaintiff Herr continued to operate the business after its dissolution and is the only one beneficially interested in the outcome of this action he will hereinafter be referred to as the plaintiff.

Plaintiff strenuously argues that the evidence shows that Coffey was the agent of the insurer; that he knew that plaintiff was the other partner of the firm and that his ordering the policy in the name of Miller alone, or failure to detect the omission of Herr's name from the application or policy is chargeable to his principal. Aside from the fact that the evidence is wholly insufficient to establish agency, the case turns, in my opinion, on other considerations. The questions presented are:

(1) May the policy be treated as reformed so as to include plaintiff's name as one of the insured?

(2) Was there a transfer of "the interest of the insured" in violation of the terms of the policy?

(3) Was the loss of the plane within the coverage of the policy?

From the fact that the plane was insured for its full value it may be inferred that it was the intention of the parties that not only the entire ownership interest in the plane be covered, but that the owners be named as the insured. Through oversight or inadvertence, however, only...