Insurance Co. of North America v. Newtowne Mfg. Co.

• Decision Date: 15 March 1951
• Docket Number: No. 4513,4514.,4513
• Citation: 187 F.2d 675
• Parties: INSURANCE CO. OF NORTH AMERICA v. NEWTOWNE MFG. CO. INSURANCE CO. OF NORTH AMERICA v. HOLLAND TRANSP. CO., Inc.
• Court: U.S. Court of Appeals — First Circuit

187 F.2d 675 (1951)

INSURANCE CO. OF NORTH AMERICA v. NEWTOWNE MFG. CO.

INSURANCE CO. OF NORTH AMERICA v. HOLLAND TRANSP. CO., Inc.

Nos. 4513, 4514.

United States Court of Appeals First Circuit.

March 15, 1951.

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Richard J. Cotter and George B. Rowell, Boston, Mass. (Francis E. Silva, Jr., Boston, Mass., on the brief; Warner, Stackpole, Stetson & Bradlee, Boston, Mass., of counsel), for Insurance Co. of North America.

Joseph B. Abrams, Boston, Mass., for Newtowne Mfg. Co. etc.

John M. Russell, Boston, Mass. (Solomon Mondlick and Paul F. Perkins, Jr., Boston, Mass., on the brief; Ropes, Gray, Best, Coolidge & Rugg, Boston, Mass., of counsel), for Holland Transp. Co., Inc.

Before MAGRUDER, Chief Judge, WOODBURY, Circuit Judge, and CLIFFORD, District Judge.

MAGRUDER, Chief Judge.

Newtowne Manufacturing Company, a Massachusetts corporation, brought an action in the Superior Court for Suffolk County, Massachusetts, against the Insurance Company of North America, a Pennsylvania corporation, on a transportation policy insuring Newtowne against loss of fabrics and manufactured products while in the custody of a public truckman. Defendant North America procured the removal of the case to the United States District Court for the District of Massachusetts on the ground of diversity of citizenship. In the latter court, North America brought in Holland Transportation Company as a third-party defendant, pursuant to Rule 14 of the Federal Rules of Civil Procedure, 28 U.S.C.A., alleging that if North America were liable to Newtowne under the transportation policy, North America was entitled to recover judgment against Holland by way of subrogation to Newtowne's claim against Holland on the contract of carriage. Holland, in turn, brought in North River Insurance Company as a fourth-party defendant, alleging that if Holland were liable for the loss of the shipment in transit, Holland was entitled to recover from North River Insurance Company on a policy issued by the latter.

After the case was tried and the jury had brought in its special verdict answering certain questions propounded by the court, a motion by North River Insurance Company for a directed verdict in its favor was granted. The granting of this motion was with the acquiescence of Holland as fourth-party plaintiff, apparently on the view that, under the evidence, if Holland was liable for the loss of the shipment, the loss must have been due to the dishonesty of one of its own employees, a risk not covered by North River Insurance Company's policy. A motion by North America for a directed verdict in its favor on the original complaint was denied. The court gave judgment for plaintiff Newtowne against North America in the sum of $9,856.69, and gave judgment for the third-party defendant, Holland Transportation Company, against North America as third-party plaintiff. From each judgment North America appealed. The two appeals were heard by us on a consolidated record.

Just what happened to the goods in question is an unsolved mystery, which fortunately this court does not have to unravel. Upon conflicting testimony, it is settled by the special verdict of the jury that the goods were delivered by Newtowne to an authorized or apparently authorized agent of Holland Transportation Company, so that Holland as a public carrier became responsible for the safe carriage and delivery of the goods to the consignee, and thus was liable for the disappearance of the goods in the course of transportation, subject to the defense — which the district court held to be well taken — that the carrier was relieved of such liability because of the failure of the shipper Newtowne to comply with a provision in the bill of lading, expressed as a "condition precedent to recovery," requiring the shipper to file with the carrier a claim "in writing" within nine months after a reasonable time for delivery has elapsed.

The key witness for the plaintiff Newtowne was its shipping manager, Lovecchio.

Lovecchio testified that on the afternoon of March 6, 1947, Newtowne had in its shipping room ready for shipment to Howard Stores, Inc., in New York, four cases of men's raincoats. About 3:30 that afternoon Lovecchio made a telephone call to Holland Transportation Company and talked to Holland's dispatcher, whose voice he recognized as familiar. In response to Lovecchio's request for a truck to pick up the shipment, the dispatcher replied that he would send one around within an hour. Holland was located nearby Newtowne's premises, and for that reason Holland was the only carrier which Lovecchio would call that late in the day for the pickup of a shipment. About four o'clock on the same afternoon a big tractor-trailer unit backed down the narrow alley to Newtowne's shipping platform. After the driver had rung the bell and announced that he was from Holland, Lovecchio unlocked the door from the inside and admitted the driver to the shipping room. Lovecchio recognized the driver as a Holland employee who had previously called for shipments; he testified that if he had not so recognized the driver, he would have called Holland to verify his identity, as he had done before when strange drivers appeared.¹ According to Lovecchio, though the alley was so narrow as to make it impossible to see the printing on the sides of the truck, he recognized it as a Holland truck; Holland was the only trucking company which called for goods at Newtowne with this particular kind of tractor-trailer unit. There were some other goods in the truck at the time of its arrival.

With the aid of his helper and of the driver of the truck, Lovecchio loaded the four packing cases on to the truck. In accordance with the usual practice, the goods were not relinquished to the driver's custody until the driver signed the bills of lading and the shipping book, which was a kind of receipt. Since there appeared to be nothing out of the ordinary in the transaction, Lovecchio did not notice at the time the name which the driver had signed. The driver then drove off with the goods, and their whereabouts have never since been accounted for. No other truck from Holland called later on the afternoon of March 6, 1947, to pick up the shipment in question.

When Howard Stores, Inc., in the latter part of March informed Newtowne that it had not received the shipment, an investigation was immediately instituted by the parties concerned. Not until then was Lovecchio aware that the driver had signed the printed name "Chase" to the bills of lading and the shipping book. This was the only time any such name had appeared in Newtowne's records as a purported driver for Holland. A few days after the loss was reported Holland arranged a line-up of twenty-five of its drivers to enable Lovecchio to pick out if possible the driver who had taken away the shipment in question. Lovecchio recognized several of the drivers as familiar faces but was unable to identify which one picked up the shipment. Another of Holland's drivers, one Russell, was not present at the line-up due to illness, but Lovecchio testified that he knew Russell and was unable to identify him as the driver who had picked up the shipment on March 6, 1947. Lovecchio explained that nothing occurred out of the ordinary routine which would have led him to take special note of the driver; that all he could recollect after the event was that the driver had a familiar face as one who had made calls for Holland previously, but beyond that Lovecchio could not identify him. For the most part he did not know the drivers by name; it might have been any one of the Holland drivers who had been there before.

Holland Transportation Company introduced testimony to the effect that it received no telephone call from Newtowne on March 6, 1947; that its records contained no reference to any shipment of the description of the four missing cases of raincoats; that Holland had at no time had any person named "Chase" in its employ; that no tractor-trailer unit of Holland was unaccounted for or in unauthorized hands during the afternoon of March 6, 1947; that no one of Holland's drivers who had previously called at Newtowne and who were assigned to a tractor-trailer unit on that date had called at Newtowne on that day; that the driver Russell, who had not been present at the line-up of drivers above referred to, did not work for Holland on the particular day, March 6, 1947, and further, did not drive a tractor-trailer for Holland but, rather, a small truck.

One Wilhelm, claim agent for the carrier, testified that after examining Holland's records and personnel with completely negative results, he went down to Newtowne's plant to investigate further the alleged claim of loss. He had a conversation with Newtowne's president Selib. The evidence is in some conflict, but taking the testimony most favorable to Newtowne Selib showed Wilhelm the shipping book, the bills of lading, and the invoices, and gave him photostatic copies of these documents for the purpose of supporting a claim of loss which he had made orally. These documents would of course serve to identify the shipment which was claimed to be lost, the consignee, and the value of the goods in question. Holland had blank forms for the making of formal claims of loss, but Wilhelm did not submit any such form to Selib or request him to put in a written claim. It is undisputed, and was conceded by counsel for Newtowne in the trial, that Newtowne never "made a claim on Holland in writing" demanding payment for the loss. Wilhelm told Selib at the time of their conference, and maintained consistently thereafter, that Holland had never received delivery of the shipment in question, was not responsible for the loss, and would not pay the claim. There was nothing in Selib's testimony to the effect that it was this unequivocal denial of liability on the merits of the claim that led Newtowne to omit the formal step of submitting to the...