Home Ins. Co. v. Ciconett

• Decision Date: 07 March 1950
• Docket Number: No. 10895,10896.,10895
• Citation: 179 F.2d 892
• Parties: HOME INS. CO. v. CICONETT. CICONETT v. HOME INS. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

179 F.2d 892 (1950)

HOME INS. CO. v. CICONETT.

CICONETT v. HOME INS. CO.

Nos. 10895, 10896.

United States Court of Appeals Sixth Circuit.

January 24, 1950.

As Modified on Denial of Rehearing March 7, 1950.

Edward B. Hayes, Chicago, Ill. (William Mellor, Louisville, Ky., on the brief) for Home Ins. Co.

Leo J. Sandmann, Louisville, Ky., For Ciconett.

Before HICKS, Chief Judge, and ALLEN and MILLER, Circuit Judges.

MILLER, Circuit Judge.

These two appeals involve two separate sinkings of the Deisel Towboat "Judge Ross," owned by C. V. Ciconett and covered by an insurance policy issued by The Home Insurance Company.

The policy of insurance was originally issued October 10, 1942 for a period of one year in the amount of $8,500. It was renewed by annual certificates extending the insurance through the periods covered by the two sinkings. The first sinking occurred on September 7, 1944 while the vessel "Judge Ross" was docked at Mount Vernon, Indiana. It was raised and repaired at a cost of $3,083.54, for the recovery of which amount Ciconett filed a libel in personam in Admiralty against the Insurance Company. This action was dismissed by the District Judge, from which ruling the appeal in action No. 10,896 has been prosecuted.

On November 28, 1944, following the renewal of the policy on October 10, 1944, the "Judge Ross," while navigating the Kentucky River, struck a submerged snag or stump which caused the second sinking. There was expended the sum of $4,677.78 in an unsuccessful attempt to raise the vessel. The boat was thereafter abandoned by the Insurance Company. Ciconett was paid $5,000 by the Insurance Company as a partial payment on the final adjusted liability without waiver of rights by either party under the policy of insurance. To recover the loss resulting from this sinking, Ciconett filed his libel in Admiralty against the Insurance Company for the sum of $8,500, plus the expenditure of $4,677.78, subject to the credit of $5,000 paid by the Insurance Company. The Insurance Company denied liability for the expenditure of the $4,677.78. The District Judge overruled this defense and entered judgment in favor of the libellant in the net amount of $8,177.78, from which judgment the Insurance Company has prosecuted the appeal in action No. 10,895. The appeals are before us on a single record.

The first sinking arose out of the following facts as found by the District Judge and fully supported by the evidence: Captain Martin Wood was in charge of the vessel "Judge Ross" on September 6, 1944. It was moored to the bank at Mount Vernon, Indiana, at which time its crew was Captain Wood, Engineer Breeck and Melvin Johnson, a deckhand. Captain Wood discovered when he went on watch about midnight that water was entering the hull. He discovered a leak in the stern starboard rake. He started the pumps and attempted to caulk the seams and stop the leak. This was unsuccessful and the boat finally sank about six or seven o'clock a. m., September 7, 1944.

The policy contained the following provision: "IT IS WARRANTED BY THE INSURED that the said vessel . . shall at all times have a competent watchman on board, awake and on duty." The Insurance Company claimed among other defenses that this warranty was breached by the insured and that such breach discharged it from any liability under the policy. The libellant claimed that the warranty was not breached and that, in any event, such breach of warranty did not cause the sinking and so did not discharge the Insurance Company from liability. The District Judge found on this disputed issue of fact as follows: "There was no watchman on board and awake on September 6, 1944, when the leak began, which resulted in the sinking." The contention of counsel for libellant that the warranty was not broken is supported by very slight evidence. In our opinion, the finding is fully supported by the evidence, is not clearly erroneous, and is conclusive of the appeal in action No. 10,896. The further contention that the presence of a watchman would not have prevented the sinking of the boat under counsel's theory of how the leak started is not established by the evidence, and in any event is immaterial as a matter of law.

It is settled that a warranty in a contract of insurance must be literally complied with; that the only question in such cases is whether the thing warranted to be performed was or was not performed; and that a breach of the warranty releases the company from liability regardless of the fact that a compliance with the warranty would not have avoided the loss. Shamrock Towing Co. v. American Insurance Co., 2 Cir., 9 F.2d 57, 60; Fidelity-Phenix Ins. Co. v. Chicago Title & Trust Co., 7 Cir., 12 F.2d 573; Whealton Packing Co. v. Aetna Insurance Co., 4 Cir., 185 F. 108; Aetna Insurance Co. v. Houston Oil and Transport Co., 5 Cir., 49 F.2d 121, 123-124. See also Norwich Union Indemnity Co. v. H. Kobacker and Sons Co., 6 Cir., 31 F. 2d 411, 414; Imperial Fire Ins. Co. v. Coos County, 151 U.S. 452, 14 S.Ct. 379, 38 L. Ed. 231. The general Admiralty Law, as shown by the foregoing cases, is applicable. Garrett v. Moore-McCormack Co., 317 U.S. 239, 243-245, 63 S.Ct. 246, 87 L.Ed. 239.

Libellant's contention that the failure of the Insurance Company to return the premium barred such a defense is not well taken. No effort was being made to cancel the policy in its entirety for fraudulent procurement thereof, or for some similar reason. The policy was in full force and effect. The Insurance Company was entitled to the premium, and also to stand upon the express provisions of the policy. U. S. Life Ins. Co. v. Smith, 6 Cir., 92 F. 503, 508-509; Home Ins. Co. v. Scott, 6 Cir., 46 F.2d 10, 12.

Nor is libellant entitled to urge at this time that...