Kesslen Shoe Co., Inc. v. Philadelphia Fire & Marine Ins. Co.

• Decision Date: 02 July 1936
• Citation: 295 Mass. 123,3 N.E.2d 257
• Parties: KESSLEN SHOE CO., Inc., v. PHILADELPHIA FIRE & MARINE INS. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

295 Mass. 123

3 N.E.2d 257

KESSLEN SHOE CO., Inc., v. PHILADELPHIA FIRE & MARINE INS. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

July 2, 1936

Report from Superior Court, Suffolk County; Walsh, Judge.

Action of contract by the Kesslen Shoe Company, Incorporated against the Philadelphia Fire & Marine Insurance Company which was heard without a jury. On report from the superior court.

Judgment for defendant.

F. T. Leahy, of Boston, for plaintiff.

M Wambaugh, of Boston, for defendant.

PIERCE, Justice.

This is an action of contract by the insured, Kesslen Shoe Company Inc., upon an insurance policy covering theft of entire shipping packages, to recover the value of certain leather lost in the course of transportation by Wing's Motor Transportation, owned by one Leonard Wing. This action was tried in the Superior Court without a jury, in conjunction with a suit in equity brought by Dietz Kid Inc., the seller of the leather, against the Kesslen Shoe Company, Inc., the buyer, and an action at law by Dietz Kid Inc. against Leonard Wing, the carrier. In the equity suit the seller of the leather sought to recover the purchase price from the buyer, and to reach and apply the claim of the latter against the carrier for the loss of the goods.

In the equity suit the trial judge found for Dietz Kid, Inc., but found that there was no obligation on the part of the carrier which could be reached by the plaintiff in that action. In the law action against the carrier, he found for the defendant. In the case at bar he found for the defendant insurance company.

In this action the defendant resists payment on the ground that the plaintiff, in violation of the terms of the policy, entered into an agreement with the carrier to give the latter benefit of insurance, or otherwise impaired the liability of the carrier to the plaintiff, and also on the ground that a proper detailed proof of loss in compliance with the policy was not filed by the plaintiff.

By stipulation of the parties the following facts were agreed on: ‘ (1) That Dietz Kid, Inc. and the Kesslen Shoe Company on or about November 26, 1932, entered into an agreement, an oral agreement, for the purchase and sale of certain leather. (2) That the Dietz Company shipped this leather by Wing's express from Boston, Massachusetts, to Kennebunk, Maine, a shipment of the leather having first been made by Hapgood's Express from Lynn to Boston; that on December 1, 1932, Hapgood delivered the leather to Wing at Boston and collected $6.00 for his freight charges from Lynn to Boston; that the leather at that time placed upon Wing's Express truck was contained in six packing cases and two wrapt bundles. It consisted of the following: * * * [named items]. Total invoice price $4007.88. (3) While Wing's truck on which this leather was loaded was in Plaistow, New Hampshire, certain of this leather, namely, three of the packing cases and the two wrapt bundles, and some of the leather out of a fourth packing case, was stolen from the truck; the leather was then in transit from Boston to Kennebunk, Maine. (4) Two whole packing cases and a part of a third case were delivered to the Kesslen Company and a receipt was signed by an employee of the Kesslen Company, it being agreed that this receipt may be introduced in evidence as Exhibit 1, and that this was paid for. (5) Two memoranda of agreement dated August 18, 1932, between Wing and Saxe will be admitted in evidence as Exhibit 2. It is agreed on that date Saxe was president of the Kesslen Shoe Company. (6) It is agreed by the insurance company, that the insurance policy was in force at the time of the loss, unless the policy had been voided by acts of the insured in breach of warranties and conditions as set forth in the insurance company's answer. It is further agreed that the loss was duly reported to the insurance company within the terms of the seventh article of the policy, and that a proof of loss which the insurance company claims was inadequate was filed within the four months. (7) It is agreed in the case brought by Dietz against Kesslen Shoe that if Dietz is entitled to recover, he shall recover the amount of $2396.78, with interest from January 10, 1933.’

In addition, there was evidence from which the following facts could be found: The plaintiff is a corporation engaged in the business of making women's shoes, with a factory at Kennebunk, Maine. Samuel Saxe was president and active manager of the corporation, and had entire charge of the trucking department. Wing, the carrier, had been doing the trucking for the plaintiff for about four years prior to the loss. Beginning July 1, 1932, he did the plaintiff's trucking under an oral agreement with the plaintiff, made by Saxe, whereby the carrier was to receive a flat sum of $200 per week for his work. In June of 1932, Wing had agreed to pay premiums on a policy of insurance to be issued June 30, 1932, which could be identified as the policy in suit.

On or about August 18, 1932, Wing and Saxe executed the following agreement to go into effect September 1, 1932: ‘ The Wings Motor Transportation will do all the trucking for the Kesslen Shoe Co. under the following terms: * * * [schedule of prices] It is further agreed that the premium for policy covering loss of any merchandise shall be paid by The Wings Motor Transportation. This agreement can be terminated by either party Thirty days after presentation of written notice.’

Saxe testified that the ‘ Memorandum’ or written agreement dated August 18, 1932, contained the entire agreement; that the agreement was with himself personally, that his ‘ associates' in the plaintiff corporation had authorized him to contract on his own responsibility for all the trucking to be done for the plaintiff, and had agreed that he individually should receive from the plaintiff the amount, if any, by which the amount of $800 per month theretofore paid in July and August, 1932, to Wing, under the contract of July 1, 1932, should exceed the expense for trucking under his personal contract; that the agreement that Wing should pay a premium on a policy of insurance did not refer to any particular policy, but that the policy now in suit was the only policy covering goods carried for the plaintiff; and that in the first instance the premium of $250 on the policy was paid by the plaintiff under date of July 7, 1932, and the plaintiff charged the amount of the premium against its account with Wing. Wing testified, in substance, that he did not observe when he signed the contract, that it was made with Saxe, and there was no evidence that prior to the loss the defendant had knowledge of the terms of any agreement between Wing and Saxe or between Wing and the plaintiff, or knowledge of conditions under which the premium was to be paid by Wing.

There was evidence admitted without objection to the effect that the writing did not represent the whole agreement of carriage, and that Saxe, prior to the drawing up of the writing, said to Wing with reference to the payment of the premium by the latter, ‘ In paying the premium that protects you and it protects me.’ ‘ You have nothing to worry about and I have nothing to worry about, and if we have a loss, you report it to me and I will report it to the insurance company.’ There was further evidence from which it could be found that the premium paid by the carrier was upon the policy of insurance upon which the plaintiff sues in this action, that said policy was the one contemplated by the parties to the writing, and that it went into effect on June 30, 1932, which was prior to the date of the writing. There was evidence that all bills rendered by Wing, either before or after the writing, were credited to Wing's running account with the plaintiff corporation, or were paid, if paid at all, by checks upon the plaintiff's account. After the loss, Saxe asked Wing to sign a memorandum, drafted at the plaintiff's request by attorneys for the defendant, to the effect that payment by Wing of the premium upon the policy now in suit should not operate to release Wing from any liability. Wing refused to sign the memorandum. The plaintiff made no claim against Wing on account of the loss.

The pertinent provisions of the policy on this point are as follows: ‘ Benefit of Insurance. (6)...