New York, New Haven and Hartford R. Co. v. Gray
Decision Date | 16 January 1957 |
Docket Number | No. 86,Docket 24187.,86 |
Parties | NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY, Libelant-Appellant, v. William Stanger GRAY, one of the Lloyd's underwriters, and Orion Insurance Company, Ltd., Insurance Company Member of the Institute of London Underwriters, Respondent-Appellees. |
Court | U.S. Court of Appeals — Second Circuit |
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Kirlin, Campbell & Keating, New York City, Edward L. Smith, New York City, for libelant-appellant.
Dow & Symmers, New York City, for respondent-appellees, Daniel L. Stonebridge and Raymond W. Mitchell, New York City, of counsel.
Before CLARK, Chief Judge, and FRANK and LUMBARD, Circuit Judges.
The trial judge denied recovery because he held that the loss incurred was not caused by any "peril of the seas." As his findings show, the loss occurred as follows: The "sea" (i.e., water from the river) leaked into the carfloat; this caused the vessel to list and settle; this, in turn, caused some of the railroad's cars and their cargo to slide into the river; then the vessel lurched and other cars and their cargo also fell into the river. The judge held that railroad's employees had been guilty of "gross negligence" which was "the immediate cause and the only cause of the accident." The "gross negligence" consisted of taking a chance that the carfloat could be towed in spite of its known condition.
The loss resulted from a "peril of the seas." 1 That the sea is calm makes no difference.2 Negligence, whether or not "gross,"3 but for which the accident would not have occurred, will not serve as a defense to such a policy. Only "wilful misconduct," measuring up to "knavery" or "design," will suffice; and neither the evidence nor the judge's findings of fact show such conduct. True, the judge, in the last paragraph of his opinion, referred to the gross negligence as if it constituted wilful misconduct. There we think he erred. In Orient Insurance Co. v. Adams, 123 U.S. 67, 8 S.Ct. 68, 31 L.Ed. 63, the master, before his vessel had steam up, negligently gave orders to cast off into the current of a river; as a result, the vessel was carried over a waterfall and sank. In affirming a judgment, on a verdict in favor of the plaintiffs, under a policy insuring them against "perils of the seas," the Court said, 123 U.S. at page 73, 8 S.Ct. at page 71: See also Dudgeon v. Pembroke, 2 A.C. 284; Trinder, Anderson & Co. v. Thames and Mersey Mar. Ins. Co. (1895), 2 Q.B. 114; Waters v. Merchants' Louisville Ins. Co., 11 Pet. 213, 221-223, 9 L.Ed. 691.
In Olympia Canning Co. v. Union Marine Ins. Co., 9 Cir., 10 F.2d 72, 74, the court said: .' "
A determination by a trial judge of the existence of negligence is not a finding of fact but a legal conclusion.4 So, too, is a determination as to "wilful misconduct." Accordingly, the judge's statement as to such conduct is not binding on us. And, as this is not a tort action, the horrendous niceties of the doctrine of so-called "proximate cause," employed in negligence suits,5 apply in a limited manner only to insurance policies.6
We do not agree with the trial judge that the libelant's gross negligence was the sole cause of the accident. Nor do we agree with his conclusion that the "loss was inevitable" because of the way the carfloat was loaded and of her condition.7 The evidence shows a concatenation of fortuitous circumstances (including misunderstanding by the dispatcher of some of the reports made to him about the vessel's listing).
Cases cited by appellees are inapposite: Union Ins. Co. v. Smith, 124 U.S. 405, 8 S.Ct. 534, 31 L.Ed. 497, related to a policy which expressly excepted perils "consequent upon" and "arising from" or "caused by incompetency of the master" or "want of ordinary care and skill in navigating said vessel," and "all unseaworthiness."8 Diethelm & Co. v. The Flying Trader, D.C.S.D.N.Y., 141 F. Supp. 271, involved no insurance policy; it was a suit against an ocean carrier which defended on the ground that bills of lading excluded damage due to perils of the sea (and which was nevertheless required to pay for damage to cargo injured in a moderate gale). In Chicago S.S. Lines v. U. S. Lloyds, D.C.N.D.Ill., 2 F.2d 767, affirmed, 7 Cir., 12 F.2d 733, the policy contained an express warranty against the master's negligence.9 Henjes v. Aetna Ins. Co., 2 Cir., 132 F.2d 715, 720, also related to a breach of an express warranty.
Western Assur. Co. of Toronto, Canada v. Shaw, 3 Cir., 11 F.2d 495, a case cited by the trial judge, concerned a policy...
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