Sun Insurance Office v. Be-Mac Transport Co.

• Decision Date: 29 December 1942
• Docket Number: No. 12300.,12300.
• Citation: 132 F.2d 535
• Parties: SUN INSURANCE OFFICE LIMITED OF LONDON v. BE-MAC TRANSPORT CO., Inc.
• Court: U.S. Court of Appeals — Eighth Circuit

132 F.2d 535 (1942)

SUN INSURANCE OFFICE LIMITED OF LONDON v. BE-MAC TRANSPORT CO., Inc.

No. 12300.

Circuit Court of Appeals, Eighth Circuit.

December 7, 1942.

Rehearing Denied December 29, 1942.

J. H. Cunningham, Jr., of St. Louis, Mo. (Chasnoff, Willson & Cunningham, of St. Louis, Mo., and John W. Fuson, of St. Joseph, Mo., on the brief), for appellant.

Max Sigoloff, of St. Louis, Mo., for appellee.

Before GARDNER, WOODROUGH, and THOMAS, Circuit Judges.

WOODROUGH, Circuit Judge.

This appeal is taken to reverse a judgment for $3,370.07 rendered in favor of plaintiff Be-Mac Transport Company, Inc., against the defendant insurance corporation for a loss sustained by plaintiff found to be covered by an insurance policy issued to it by defendant. The judgment also awarded $737 for vexatious delay and attorney's fees. The case was submitted to the court (without a jury) upon an agreed statement of the facts and certain evidence in documentary form, and the contention of the insurance company was that the insurance policy sued on did not insure against the loss sustained by the plaintiff. Its appeal is predicated on the same contention. Although the trial court made findings of fact appearing in the record, it was not called upon to pass on the credibility of any witness before it and the appeal presents no reason for the application of Rule 52 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, to such findings. There was no conflict in evidence and the appeal imposes on this court the duty of ruling upon the questions of law presented. United States v. Mitchell, 8 Cir., 104 F.2d 343; Flannery Bolt Co. v. Flannery, 3 Cir., 86 F.2d 43.

It appears that at all relevant times in 1937 the plaintiff was operating as a common carrier by motor vehicle in interstate commerce pursuant to an application filed with the Interstate Commerce Commission under the Grandfather Clause of the Federal Motor Carrier Act, 49 U.S.C.A. § 306, and the insurance policy sued on in the action was in full force and effect, having been duly issued by defendant to plaintiff, the premiums being paid. By its terms the policy covered "the legal liability of the assured as a carrier * * * for direct loss or damages for perils insured against on shipments of lawful goods and/or merchandise of every description while in the custody of the assured, for and during transportation by the motor trucks * * * owned and/or operated and/or contracted for by the assured."

"Perils insured against" were enumerated in the policy and a further provision read: "This policy also covers * * * against the risk of theft * * *. Dishonesty by the assured, agents or employees whether occurring during the hours of employment or otherwise, is also excluded."

In the course of its business as a common carrier under the Federal Motor Carrier Act, the plaintiff contracted to transport a shipment of poultry from Shawnee, Oklahoma, to New York, and a shipment of butter from St. Louis to New York. It did not have a truck of its own available to effect the transportation from St. Louis to New York but arranged with one Paul Birkinbine, who owned a truck, to transport the two shipments from St. Louis to New York. It agreed to pay him a flat sum for the haul and advanced him a portion of the money, agreeing to pay the balance after he had completed delivery. Birkinbine did not have a permit as a carrier or other authority from the Interstate Commerce Commission, but, as he stated, operated "under the plates of whoever I haul for." The property which plaintiff had contracted to transport to New York was delivered by it to Birkinbine in St. Louis. He had a helper with him at the time by the name of Chester C. Claus, and they commenced the transportation in Birkinbine's truck. Birkinbine stayed with the load as far as Indianapolis and then sent Claus on with it. Claus on reaching New York state, wrongfully disposed of the cargo and was subsequently convicted under federal law of stealing it. Plaintiff accounted to the shippers for the value and recouped part of it from persons who had received the stolen goods. The balance of the value is the amount for which plaintiff obtained judgment against the insurance company.

The insurance company's defense is that the policy which it issued to the plaintiff did not insure against the dishonesty of the helper Chester C. Claus who stole the cargo entrusted to him. It contends that on the facts shown said Claus must be deemed an agent in the transportation undertaken by the Be-Mac company and that the policy did not cover his dishonesty which caused the loss. It also contends that its insurance against the risks and perils of plaintiff's business as a common carrier by motor vehicle under the Federal Motor Carrier Act must be read in the light of the provisions of the Act and the Rulings promulgated thereunder. Plaintiff's lawful authority to contract as it did with the shippers of the poultry and butter to transport the same in interstate commerce by motor vehicle over the highways from points in Oklahoma and Missouri to New York derived from 49 U.S.C. A. § 306. Plaintiff not only assumed responsibility for the entire transportation by its contract with the shippers, but the Act and Rulings of the Administrator forbade it to make an interchange of the shipment with motor vehicle carriers designated contract carriers under the Act. Administrator's Ruling No. 13, Bureau of Motor Carriers, August 21, 1936.¹ E....