Olympia Canning Co. v. Union Marine Ins. Co.

• Decision Date: 04 January 1926
• Docket Number: No. 4679.,4679.
• Citation: 10 F.2d 72
• Parties: OLYMPIA CANNING CO. v. UNION MARINE INS. CO., Limited.
• Court: U.S. Court of Appeals — Ninth Circuit

10 F.2d 72 (1926)

OLYMPIA CANNING CO. v. UNION MARINE INS. CO., Limited.

No. 4679.

Circuit Court of Appeals, Ninth Circuit.

January 4, 1926.

W. H. Bogle, Lawrence Bogle, and Frank E. Holman, all of Seattle, Wash., for plaintiff in error.

S. Hasket Derby and Carroll Single, both of San Francisco, Cal., and Bruce C. Shorts, of Seattle, Wash., for defendant in error.

Before GILBERT, HUNT, and McCAMANT, Circuit Judges.

GILBERT, Circuit Judge (after stating the facts as above).

We accept the finding of the trial court upon the evidence in the case as conclusively establishing that the sinking of the vessel was caused by her being in so topheavy, unstable, tender, and unfit condition, due to the improper manner in which the cargo taken on at Tacoma was stowed, as to be unable to withstand the effect of certain well-known tidal currents, together with a current caused by the waters of the Puyallup river emptying into the bay. The question presented is whether or not the loss was caused by "perils of the seas," within the terms of the insurance contract.

The policy provided that adjustment and settlement should be made in conformity with the laws and customs of England, and it is admitted that said provision is controlling here. Rule 7 of the first schedule of the English Marine Insurance Act of 1906 provides: "The term `perils of the seas' refers only to fortuitous accidents or casualties of the seas. It does not include the ordinary action of winds and waves." Section 55 of the act provides that the insurer "is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew." The act also provides: "In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure." It is admitted in the pleadings that the vessel was seaworthy at the beginning of her voyage from Olympia.

The plaintiff in error contends that if a vessel is seaworthy when the policy attaches, and thereafter some unexpected and unforeseen event occurs during the course of the voyage, which changes her condition, which event, in connection with the action of the sea, even if the latter is calm, causes the vessel to founder, the loss occurs from sea perils, and that in the present case the negligent overloading of the vessel was the occurrence of such an unforeseen event. In The Xantho, 12 App. Cas. 507, a collision case, Lord Herschell said: "I am unable to concur in the view that a disaster which happens from the fault of somebody can never be an accident or peril of the sea, and I think it would give rise to distinctions resting on no sound basis if it were to be held that the exception of perils of the seas in a bill of lading was always excluded, when the inroad of the sea which occasioned the loss was induced by some intervention of human agency." In Arnould on Marine Insurance, § 822, it is said that, in order to enable the plaintiff to recover, "the proximate cause of loss must appear to have been a peril of the sea," and in section 784 it is said: "The maxim as to causa proxima as applied in practice has a twofold operation — partly to limit and partly to enlarge the underwriter's responsibility. It acts in the latter mode in all those cases where it has been decided that the underwriter shall be liable for all losses that are proximately caused by the perils insured against, though they may be remotely occasioned by the acts of negligence of the assured or his agents."

In Redman v. Wilson, 14 M. & W. 477, where cargo on a ship insured against the perils of the sea was negligently loaded by natives on the coast of Africa, and the ship in consequence shortly afterwards became leaky and, being pronounced unseaworthy, was run ashore in order to prevent her from sinking and save the cargo, it was held that the insurers were liable for a constructive total loss; the immediate cause of the loss being perils of the sea, although the cause of the unseaworthiness...