Virginia-Carolina Chemical Co. v. Chesapeake Lighterage & Towing Co.

• Citation: 279 F. 684
• Decision Date: 18 January 1922
• Docket Number: 53.
• Parties: VIRGINIA-CAROLINA CHEMICAL CO. v. CHESAPEAKE LIGHTERAGE & TOWING CO. et al.
• Court: U.S. Court of Appeals — Second Circuit

279 F. 684

VIRGINIA-CAROLINA CHEMICAL CO. v. CHESAPEAKE LIGHTERAGE & TOWING CO. et al.

No. 53.

United States Court of Appeals, Second Circuit.

January 18, 1922

Libelant either imported or bought from the importer certain 'kainit.' The steamship Main, which brought the kainit, arrived at Baltimore, and libelant employed the Chesapeake Company to take the kainit upon one of its barges for carriage to Seawell, Md. The laden barge, according to the libel, 'sprang a leak and sunk * * * as a result of perils of the sea,' whereby libelant's cargo became a total loss. Except for the above quotation, the libel contains nothing that can be called an allegation of fault against the Chesapeake Company.

Libelant did, however, allege that when the lighterage contract was made it was agreed with Chesapeake Company 'that all goods lightered (including, of course, this kainit) while on the lighters of Chesapeake, etc., Company, were to be insured by the (Chesapeake Company) up to the sum of $6,000, provided there was no prior insurance' thereon. In point of fact there was before and at the time when the kainit was laden on Chesapeake Company's barge, and apparently for some months prior to that date, insurance attaching (according to its terms) to said kainit. It was expressed in a policy issued by Federal Insurance Company to the concern which apparently sold the kainit to libelant, and was in favor of said vendor corporation 'on account of whom it may concern. ' and it concerned the libelant apparently as holder of bills of lading for the kainit at the time it was unladen from the Main and put aboard Chesapeake Company's barge.

This insurance, available to libelant, covered the kainit from the time of shipment on the Main until its delivery at destination, and specifically included 'all risks of lighterage'; but such general assumption was limited by the following exceptive provision: 'Warranted by the assured free from any liability for merchandise in the possession of any carrier or other bailee, who may be liable for any loss or damage thereto, and for merchandise shipped under a bill of lading containing a stipulation that the carrier may have the benefit of any insurance thereon, and that any insurance granted herein shall not cover where any carrier or other bailee has insurance (whether prior or subsequent in date to this policy) which would attach if this policy had not been issued.'

At and before the time when Chesapeake Company agreed to carry libelant's kainit, it had a policy in the Fireman's Fund Insurance Company, which by its terms covered 'merchandise and property on which the (Chesapeake Company) have agreed with the shippers to provide insurance also their legal liability in cases where they have not agreed to provide insurance. ' This Fireman's Company policy applied specifically to the barge which carried the kainit, and contained the exceptive provision: 'Warranted by the assured that any insurance granted herein shall not cover where the assured or any carrier or other bailee has insurance which would attach if this policy had not been issued.'

Upon the loss of the kainit libelant received from the Federal Company what would have been its loss under that company's insurance policy, but only 'as a loan, and repayable only to the extent of any net recovery (Federal Company) may make from any carrier, bailee, or others on account of loss (of the kainit), or from any insurance effected by any carrier, bailee or others on said' kainit. The receipt for this loan contained the usual agreement on the part of libelant to prosecute suits as required by Federal Company, but 'at the expense and under the exclusive direction and control' of said Company.

Thereupon this action was begun, with allegations as above set forth only against Chesapeake Company, but with an averment that 'by reason of the said policy of insurance taken out (with Fireman's Company) said Fireman's Company is liable to it under and by virtue of the terms of its said policy with ' Chesapeake Company. The Chesapeake and Fireman's Companies appeared by the same proctors, denied the allegation last quoted, but admitted that, when Chesapeake Company agreed to carry said kainit, it further agreed that it 'would be insured by the Chesapeake Company while on its lighters, provided said cargoes were not otherwise insured.'

At trial the only evidence beside the two policies of insurance and the receipt for the loan made to libelant by Federal Company was a stipulation that whatever agreement to insure was made by Chesapeake Company was evidenced only by talk between a representative of libelant and of Chesapeake Company, and that if such representatives were called as witnesses each would swear exactly as their respective employers had pleaded. On this record the trial court gave decree to libelant as against the Fireman's Insurance Company only, but dismissed the libel as against Chesapeake etc., Company. Whereupon the Fireman's Fund Insurance Company appealed.

William Harison,...