The Sydney

• Citation: 27 F. 119
• Parties: THE SYDNEY. [1] v. THE SYDNEY and another. THE WORDEN. PROVIDENCE WASHINGTON INS. CO. and another
• Decision Date: 17 March 1886
• Court: U.S. District Court — Southern District of New York

27 F. 119

THE SYDNEY. ^[1] THE WORDEN. PROVIDENCE WASHINGTON INS. CO. and another v. THE SYDNEY and another.

United States Circuit Court, S.D. New York.

March 17, 1886

Edward D. McCarthy, for appellants.

Hyland & Zabriskie, for claimant.

WALLACE J.

The libel in this cause avers, in substance, that the libelants insurance corporations engaged in the business of marine insurance, did by a policy of insurance agree to indemnify Armour, Plankinton & Co., the owners of a certain cargo of wheat on board the canal-boat Worden, upon a voyage from Buffalo to New York, against the usual marine risks and perils of the voyage; that there was a total loss of the cargo upon the voyage, and an abandonment by the owners to the libelants; that the canal-boat Worden, upon the voyage was fastened to the steam canal-boat Sydney, and was entirely dependent on the Sydney for motive power; that both the Worden and the Sydney were owned by the same persons; that the loss occurred by the negligence of the persons in charge of the two boats, in consequence of which the Worden was driven upon the rocks of Esopus island, in the Hudson river and sank; that the libelants became liable to the owners of the cargo in the sum of $9,211.75 as for a total loss, and paid that sum to them as the insurance upon said cargo whereby libelants became subrogated to the owner's cause of action against the vessels. The answer of the claimant admits that he was the owner of both vessels; denies that the libelants insured the owners of the cargo of the Worden; alleges that the policy insured the claimant as carrier of the cargo; denies all averments of negligence; admits that the Worden, while being towed by the Sydney, and while entirely under the control and management of the Sydney, struck the rocks upon Esopus island, and sunk; admits that these were well-known rocks, easily avoidable ordinarily by tow-boats and their tows; and avers that the Worden foundered by reason of the bursting of the boiler of the Sydney, whereby that steamer was unable to control her movements, and was carried by the tide and wind until the Worden struck the rocks. The answer further alleges that the claimant paid the premium to the libelants for the insurance, upon the agreement that the payment of any loss or damage to the cargo in transitu should accrue to the benefit of the claimant, and relieve him from his liability for such loss as a common carrier.

The district court dismissed the libel, and upon this appeal by the libelants the following facts are found:

(1) Prior to the seventeenth day of May, 1883, the libelants issued and delivered to the firm of H. Morse & Co. of Buffalo, New York, a policy of insurance, reciting that 'on account of H. Morse & Co., for whom it may concern, they do insure the several persons whose names are hereafter indorsed on the policy as owner, advancer, or common carrier of goods, merchandise, or produce on his own boat, or boats belonging to others, loaded on commission or chartered, from place to place as indorsed hereon, or in a book kept for that purpose, for the several amounts at the rate and on the goods, merchandise, or produce as specified in the indorsement, beginning the adventure upon the goods, merchandise, or produce from and immediately following the landing thereof at the port or place of the indorsement, and, continuing the same until the goods, merchandise, or produce shall be safely landed at the port of destination. ' The policy, among other things, excepted from the risk all losses arising from want of ordinary care and skill in lading or navigating the boats.

(2) On the seventeenth day of May, 1883, Morse & Co. applied to the agent of the libelants at Buffalo for insurance upon a cargo of wheat, to be carried on board the canal-boat William Worden from Buffalo to New York, and requested the loss, if any, to be made payable to Morse & Co., or order. Thereupon the agent of the libelants entered in the book a memorandum designating Morse & Co. as the persons on whose account insurance was effected, describing the boat, cargo, and voyage, and specifying the amount insured upon the cargo on the voyage, from Buffalo to New York, as $9,875, and the premium as $14.82. At the same time the agents of the libelants delivered to Morse & Co. a certificate certifying that Morse & Co. were insured under and subject to the conditions of the policy before mentioned, in the sum of $9,875 on cargo of wheat on board boat William Worden from Buffalo to New York, loss, if any, payable to assured, or order.

(3) At the time when the foregoing policy and certificates were executed and issued by the libelants, Morse & Co. were doing business at Buffalo as intermediaries between boatmen and shippers of cargo in procuring cargoes to be shipped for a commission. They were applied to by the owner of the canal-boat Worden to procure him a cargo for New York. They thereupon applied to one Meadows, who was an agent for Armour, Plankinton & Co. for a cargo, and agreed with him to transport 7,900 bushels of wheat from Buffalo to New York on the boat Worden, and to insure the same for a freight of five cents per bushel. Thereupon they entered into a contract with the owner of the Worden, evidenced by a bill of lading, in which they were described as shippers of the cargo for transportation of the cargo to New York, and procured the certificate of insurance aforesaid, and indorsed and delivered to the agent for Armour, Plankinton & Co., and at the same time entered into a contract with him for the transportation of the cargo to New York, evidenced by a bill of lading in which they described themselves as carriers, and Armour, Plankinton & Co. as shippers.

(4) At the time Morse & Co. executed and delivered the bill of lading to the agent of Armour, Plankinton & Co. the claimant, as master of the Worden, also executed a duplicate bill of lading, describing himself as carrier, and delivered it to said agent.

(5) By the agreement for the transportation of the cargo between Morse & Co. and the claimant, the latter was to receive five cents per bushel as freight, less the amount to be paid as premium for insuring the cargo, and less a commission of 5 per cent. upon the whole freight money to Morse & Co.

(6) Morse & Co. advanced to the agent of Armour, Plankinton & Co. $200 for prior advances made by the agent upon the wheat, and by the bills of lading the cargo was to be delivered upon payment of this advance and the freight.

(7) At the time of making application for the insurance, receiving the certificate, and signing the several bills of lading, it was understood between Morse & Co. and the claimant that the latter owned the Worden and the Sydney, and intended to tow the Worden by the Sydney on the voyage.

(8) Upon the voyage the Worden was wholly under the control of the Sydney, and both boats were navigated as one vessel practically; and on the twenty-eighth day of May, 1883, while proceeding on the voyage down the Hudson river the Worden struck the rocks on Esopus island, and sunk, and her cargo was damaged to the amount of $6,175.89. These were well known rocks, easily avoidable by vessels.

(9) There is no evidence of any negligence on the part of those in charge of the navigation of the Worden or the Sydney, except such as appears from admissions in the answer of the claimant.

(10) June 26, 1883, the libelants paid to Armour, Plankinton & Co. the sum of $9,211.75 on account of the loss of the cargo insured; and upon an abandonment by the owners to the libelants, and about the same time, they paid to Morse & Co. the sum of $520, in full for their interest in the cargo.

It is to be observed that the cause of action upon which the libel proceeds is for negligence. It is not claimed that the vessels, or either of them, are liable because of a breach of the carrier's contract. The libelants assert that they have succeeded to the rights of Armour, Plankinton & Co., as the owners of the cargo of the Worden, to recover against both boats because of loss sustained by reason of the negligent navigation of the boats. There is no allegation in the libel that the libelants have succeeded to the rights of Armour, Plankinton & Co. by an assignment of the cause of action. The libelants rely purely upon subrogation. The case consequently presents two questions: First, whether upon the facts a cause of action existed in favor of Armour, Plankinton & Co. against one or both of the vessels at the time of the payment to them of the loss by the libelants; and, second, whether the libelants stand by subrogation in the place of Armour, Plankinton & Co. to enforce that cause of action. If Armour, Plankinton & Co. were not entitled to the insurance, as between themselves and the libelants, under the policy and certificate, the libelants cannot recover.

Treating the case as though Armour, Plankinton & Co. were libelants their right to recover against the vessels would not be affected by the fact that they had been paid the full amount of their loss by the insurers. The Monticello, 17 How. 152. If the insured owner has accepted payment from the insurer, the latter may use the name of the assured to obtain redress from the persons whose conduct caused the loss. At law, the insurer, upon subrogation to the rights of the assured by payment of the loss, can only maintain such a suit in the name of the assured. Gales v. Hailman, 11 Pa.St. 515; Hart v. Western R. Co., 13 Metc. 99; Hall v. Railroad Cos., 13 Wall. 367; Mercantile Ins. Co. v. Calebs, 20 N.Y. 173. In admiralty, however, there seems to be no reason why the insurer may not, as in equity, maintain the suit in his own name as the real party in interest. Fretz v. Bull, 12 How. 466; The Monticello v. Morrison, 17...