S. S White Dental Mfg. Co. v. Delaware Ins Co. of Philadelphia

• Decision Date: 31 December 1900
• Docket Number: 68.
• Citation: 105 F. 642
• Parties: S. S. WHITE DENTAL MFG. CO. v. DELAWARE INS. CO. OF PHILADELPHIA.
• Court: U.S. District Court — Eastern District of Pennsylvania

105 F. 642

S. S. WHITE DENTAL MFG. CO. v. DELAWARE INS. CO. OF PHILADELPHIA.

No. 68.

United States District Court, E.D. Pennsylvania.

December 31, 1900

Jos. C Fraley, Henry N. Paul, and Richard C. Dale, for libelant.

Edward S. Sayres and John G. Johnson, for respondent.

J. B McPHERSON, District Judge.

There is not much dispute concerning the material facts of this case, and the following findings, although taken largely from the argument of libelant's counsel, are, therefore, in the main, either admitted or not denied by the respondent. Where a controversy exists, I have not always been able to adopt the libelant's view.

Facts.

(1) The S.S. White Dental Manufacturing Company is a Pennsylvania corporation, engaged in the manufacture and sale of dental instruments and supplies. Its business was founded by S. S White, in Philadelphia, many years ago, where it has been conducted continuously ever since. The Delaware Insurance Company of Philadelphia is also a Pennsylvania corporation authorized to make marine insurance, and having its office in Philadelphia.

(2) The libelant exports to foreign countries large quantities of dental goods of its own manufacture. All such foreign shipments (with the exception about to be noted) for over 30 years have been insured with the respondent, the insurance having been effected under a policy that was in force prior to 1867, and has been continuously renewed since that time. The last renewal was on January 1, 1895. The only exception from this insurance was the goods of certain customers, who, having their own open policies, instructed the libelant not to insure shipments to them; and of this exception the respondent had notice.

(3) The policy referred to was an ordinary marine cargo printed form. When some slight variance of phrase in the different renewals, it insured the libelant on 'goods for account of whom it may concern per vessel or vessels and/or usual conveyances, * * * lost or not lost, at and from ports or places of loading to ports or places of destination. ' It contained the following written clauses: 'No risk to attach to the policy until the amount and description of the same shall be approved and indorsed thereon by the company, and to be valued at the sum so indorsed. ' 'Premiums as may be agreed upon at the time of indorsement, and to be settled monthly in cash.'

(4) Libelant's business has increased greatly since the writing of the original policy by the respondent. For some time the amount insured under this policy has regularly exceeded a quarter of a million dollars each year, and the number of individual insurances has likewise increased. For example, during the month of July, 1897, seventy-one separate shipments were insured, an average of nearly three for each working day.

(5) Libelant's foreign forwarding was done through Healy & Earle, shipping brokers, of New York. The name of the vessel by which any particular shipment had gone forward was not known to libelant until the receipt from Healy & Earle of advices by mail containing the bill of lading. These were usually not received until after the vessel had left port. All of libelant's forwarding was done by vessels of regular lines, concerning whose seaworthiness no question was likely to arise. So far as appears, no risk reported by the libelant had ever required consideration, or been referred to one of the executive officers of the respondent.

(6) With the increasing volume of business transacted under this policy, and perhaps in recognition of the changed requirements of the business, there were established the following departures from what was no doubt originally contemplated when the written clauses of the policy were framed, over 30 years before:

(a) Instead of providing a place on the policy itself for indorsements, the respondent printed blank books (called 'pass books') bearing on the cover in gilt letters:

'The S. S. White Dental Manufacturing Co.

'Open Policy with The Delaware Ins. Co. of Philadelphia.'

These pass books were ruled into columns headed as follows: 'Date,' 'Name of Vessel,' 'Place of Shipment,' 'Place of Destination,' 'Description of Goods and for Whose Account Insured,' 'Amount to be Insured,' 'Rate of Premium,' 'Amount of Premium,' 'Date of Approval,' 'Signature.' At first the policy was folded, and pasted opposite the inside of the front cover of the current pass book; and, a few pages further on, the following indorsement was printed: 'It is hereby agreed that all approved indorsements on this book are to apply in all respects to policy No.-- -- -- - the same as if indorsed on said policy, and not otherwise. ' Afterwards the policy was left pasted in one of the old books filled with indorsements, and new pass books were issued without any policy being attached thereto.

(b) Instead of premiums 'as may be agreed upon at the time of indorsement, ' the parties specially agreed by written schedules upon certain fixed rates to all points to which libelant made shipments. The last of such agreements is embodied in a letter from the respondent, dated November 8, 1897. Inter alia, this fixed the rates to European ports at one-fourth, net.

(c) Instead of requiring libelant to fill in a description in the first column of the pass book for each risk to be insured, and then immediately to bring the book to the insurance office for indorsement of the premium and approval, the respondent furnished the libelant with blank insurance orders (called in the record 'slips'), made up into pads. The blank form of the slip is as follows:

Philadelphia, . . ., 18 . . . .

The Delaware Insurance Company of Philadelphia

Insure under open policy No. . . ., $ . . ., on . . ., valued at $ . . ., per . . ., at and from . . . to . . . .

$ . . . at . . . %, $ . . . .

(d) Libelant could not, and did not attempt to, fill out these slips until after receipt of information from New York which enabled it to fill in the name of the vessel. The slips, thus filled in, were sent to the respondent at intervals, often in batches of a half dozen or more, and usually through the mail. By the time these slips reached the respondent, the vessels containing the shipments reported had usually been at sea some days. Not infrequently the vessel had arrived at its destination, and this arrival had been published in the shipping news of the New York Herald before the slips reached the respondent. Premium was charged by the respondent and paid by libelant on almost all risks at the full stipulated rate, irrespective either of the diminution of the premium at the time of the report to the respondent by reason of the vessel having sailed some days previously, or of the expiration of the risk by reason of the vessel having previously arrived at its port of destination. On two occasions,-- one in 1886 and one in 1888,-- when the respondent learned that it had been requested to insure after the ship had actually arrived, it notified the libelant of this fact, and refused to charge any premium.

(e) Instead of immediately entering in the pass books the amount and the description of each risk notified to the respondent as given in the slips, and filling in the columns for the rate and amount of premium, the marine clerk of the respondent to whom the approval of its marine risks was usually intrusted indorsed on each slip, when it was received from libelant, the rate and amount of premium in accordance with the stipulated rate, and laid the slip inside a box on his desk.

(f) Instead of indorsing approval of the risks on the pass book, the respondent regularly omitted making any indorsement for several weeks at a time. Both the respondent and the libelant used the pass book rather as a bill than as a policy.

At the end of each month, or perhaps a week or two later, the respondent sent to the libelant's office to obtain the pass book. The marine clerk of the respondent then transcribed in the pass book from the slips in his possession the amount, description, and premium for all of the risks contained on the slips that had been received during the preceding weeks. This transcription occupied the first eight of the columns of the pass book. The column headed 'Date of Approval' was then filled in by an assumed date, and the signature column was signed once on each page by the marine clerk, with a bracket to indicate that the signature applied to all the risks on the page.

The marine clerk always made these assumed dates of approval correspond to the dates of the respective slips. His alternate clerk dated the approval according to the actual date of entry in the book. Upon payment, the premium column was receipted by the respondent, the book was returned to the libelant, and was not sent for until the end of the next month.

(g) For at least the past 10 years the libelant, under this changed system of business, reported to the respondent on slips every foreign shipment sent by them, except the shipments to such customers as carried their own insurance. The respondent charged and received full premium on nearly all these risks, whether reported before or after the arrival of the vessel. There is no evidence that any risk reported by the libelant had ever been objected to.

(h) No notice of the acceptance or approval of any of the risks reported upon the slips that were thus sent by the libelant to the respondent was ever given to the libelant, but, if any risk had been disapproved, notice of disapproval would have been given at once to the libelant.

(7) In addition to the above course of dealing, which was fully known to both parties, the following course of business was adopted by the respondent concerning these risks, the facts of which were not known by the libelant:

(a) In July, 1895, the

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