Wheeler v. Aetna Ins. Co.

• Decision Date: 11 December 1933
• Docket Number: No. 79.,79.
• Parties: WHEELER et al. v. ÆTNA INS. CO.
• Court: U.S. Court of Appeals — Second Circuit

68 F.2d 30 (1933)

WHEELER et al. v. ÆTNA INS. CO.

No. 79.

Circuit Court of Appeals, Second Circuit.

December 11, 1933.

Crowell & Rouse, of New York City (E. Curtis Rouse, J. Dexter Crowell, and George L. Varian, all of New York City, of counsel), for appellants.

Single, Atkins, Middleton & Tyler, of New York City (Loring R. Le Craw, of New York City, of counsel), for appellee.

Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judges.

MANTON, Circuit Judge.

Appellants built and sold motorboats, having a plant in Brooklyn, N. Y., and a factory branch, dock, and showroom at Syracuse, N. Y.; also a dock and repair shop 14 miles from Syracuse, at Brewerton, N. Y. They built a 40-foot double cabin motorboat, known as Hull 304, in the Brooklyn yard, exhibited it in January, 1930, at a motorboat show, and then launched and demonstrated it in New York Harbor until May 6, 1930, when it was prepared for a trip to Syracuse to be shown, for disposal, in appellant's factory branch. The trip was started on the evening of May 6th, but, before reaching Albany on May 7th, it stranded, causing damage to the engines and propeller. It managed to navigate to Albany, and was later taken to Watervliet, N. Y., where partial repairs were made, and then it was taken to appellants' shipyard at Brewerton for further repairs. Here one engine was removed, overhauled, and replaced, and on testing it was found to have a bad knock. After these major repairs, it was necessary to navigate the vessel to try out the engine by running it for 30 or 40 hours at slow speed. This test was recommended by the mechanic. It was considered necessary before the boat could be demonstrated or offered for sale. At this time there were college boat races at Ithaca, and the appellants had loaned a 36-foot motorboat to the regatta committee to be available for these races. The No. 304 made its test run by accompanying the 36-footer to Ithaca. The two boats proceeded slowly, reaching Baldwinsville at the end of the first day. At that place the captain of the No. 304 took on board his wife and two friends. It was not a demonstration trip. After arrival at Ithaca, the motorboat was taken out on the lake and then back into an inlet, on May 24, 1930, to load a supply of gasoline. After loading the gasoline, the captain attempted to start the engine, and the boat blew up and became a total loss except a salvage value of about $1,000.

A policy of insurance was issued against this risk in November, 1929. Originally it was for one month, but was extended by indorsements from time to time and the payment of additional premiums. The insurance was for $11,500, and was built up by riders and indorsements on the basic form. This basic form, known as "A. I. A. Inland Vessel Form," had a rider attached known as the "Builders' Risk Form No. 50." On May 6, 1930, an indorsement was made to cover the trip from Brooklyn to Syracuse; on May 16, 1930, while the vessel was still at Brewerton, another indorsement was made extending the policy another month, and gave the same coverage as obtained while in Brooklyn. This indorsement carried the same premium as the original policy and prior indorsements for use about Brooklyn.

Among the clauses of the policy was a provision voiding the policy if any other insurance was made upon the interest insured. It was "Warranted by the assured limited to the navigation and use of the ____ as per form attached ____ Wheeler Shipyard for account of themselves * * * commencing November 12, 1929 at noon New York time and ending December 12, 1929 at noon, New York time, or until delivery at Brooklyn, New York if delivered at an earlier date. * * * this policy may be extended at pro rata monthly additional premium provided notice of extension be given to this Company prior to December 12, 1929. * * *

"Touching the adventures and perils which we, the said assurers, are contented to bear and take upon us, they are of the Seas, Man-of-War, Fire, * * * barratry of the Master and Mariners, and all other perils, losses and misfortunes that have or shall come to the hurt, detriment or damage of the said ship, &c., or any part thereof. * * * With leave to sail with or without pilots, to tow and be towed, and to assist vessels and/or craft in all situations and to any extent, and to go on trial trips. With liberty to discharge, exchange and take on board * * * passengers, and stores wherever the vessel may call at or proceed to. * * *

"This Insurance is also to cover all risks, including fire, while under construction and/or fitting out. * * *

"This insurance is also to cover all risk of trial trips, loaded or otherwise, as often as required, and all risks whilst proceeding to and returning from the trial course but warranted that all trials, and proceedings to and returning therefrom shall be carried out within a distance by water of 100 nautical miles of the place of construction or held...