Young v. Leary

• Decision Date: 29 November 1892
• Citation: 32 N.E. 607,135 N.Y. 569
• Parties: YOUNG v. LEARY.
• Court: New York Court of Appeals Court of Appeals

135 N.Y. 569

32 N.E. 607

YOUNG

v.LEARY.

Court of Appeals of New York.

Nov. 29, 1892.

Appeal from supreme court, general term, third department.

Action by Edwin Young, as executor, etc., against James D. Leary, to recover for the loss of a vessel which defendant's principal had hired under a charter party from plaintiff's assignor. From a judgment of the general term, affirming the judgment of a referee entered in favor of plaintiff, (20 N. Y. Supp. 788,) defendant appeals. Reversed.

John Berry,(Esek Cowen, of counsel,) for appellant.

Edwin Young, (A. T. Clearwater, of counsel,) for respondent.

PECKHAM, J.

The questions in this case arise out of a charter party executed on the 17th of October, 1884, by the Washburn Steamboat Company and one McKay, for whom the defendant became surety. The company on the day mentioned let, and McKay hired, the steam propeller called the Alicia A. Washburn, of which the company was the owner, for the term of 12 months from October 17, 1884, to be employed in lawful trade between Key West and other points on the West Florida coast, on the terms and conditions mentioned in the charter party. Among other provisions thereof was one by which McKay agreed to procure a fire and marine insurance policy for $27,000 for one year on such boat, in the name of the company, and to pay the premium thereon as an additional consideration of the charter. McKay also agreed to pay a certain rent per month for the use of the boat, commencing on the 17th of October, 1884; and also agreed that on the termination of the charter he would ‘deliver the said steam propeller to the Washburn Steamboat Company, or their legal representatives, in New York harbor, in the same good condition as she is now in, ordinary wear and tear excepted.’ Another provision in the charter party was as follows: ‘That said McKay hereby assumes all fire, marine, and other risks of damage that may happen to said vessel, and also assumes all liability of every kind and nature, for which said propeller or its owners may be responsible during the term of this charter, which is not covered by fire and marine insurance hereinbefore mentioned.’ McKay procured in the name of the company a fire and marine policy of insurance upon the vessel for $27,000, for one year from October 17, 1884, and paid the premium thereof as he had agreed to do in the charter party. The vessel was burned at sea in January, 1886. The defendant subsequent to October 17, 1885, but prior to the time when the vessel was sent north, caused her to be insured against loss by fire for the sum of $17,000, and the vessel when destroyed by fire was insured in favor of defendant for that sum, which he thereafter collected and has since retained for his own use and benefit. The defendant claims that by reason of certain facts, which will be hereafter adverted to, the plaintiff or his assignor waived the exact fulfillment of the agreement of McKay to deliver the vessel to the company on the 17th of October, 1885. The company duly demanded of the defendant that he should cause the vessel to be delivered to it or pay the value thereof, which defendant omitted to do. The company then assigned its claim to Thomas Cornell, who commenced this action to recover from the defendant the value of the vessel because of the failure of McKay to deliver it to the company on the 17th of October, 1885, as he had agreed to do. Subsequent to the commencement of the action Cornell died, and it was thereupon duly revived in the name of the plaintiff, as executor of the will of Cornell. The action was tried before a referee, who gave judgment in favor of the plaintiff for the value of the vessel, $23,000, and interest thereon from the 17th of October, 1885, and also the sum of $1,232.34, with interest from same date, being the amount due and unpaid for the use and hire of the vessel. The judgment having been affirmed at the general term, the defendant has appealed here.

Before adverting to the facts which occurred while the vessel was in the possession of McKay, the charterer, it will be convenient to determine the nature and extent of his obligations by virtue of the charter party. He agreed that he would procure a fire and marine insurance policy for one year in the name of the steamboat company for $27,000, and pay the premium thereon. It is conceded that he did so. This policy expired by its terms on the 17th of October, 1885, and it was not renewed. There is no provision of the charter party providing for any renewal of such a policy. He also assumed during the term of the charter all fire, marine, and other risks of damage that might happen to the vessel, not covered by fire and marine insurance, as thereinbefore mentioned; also all liability during the same term, of every kind and nature, for which the vessel or its owners might be responsible. Thus during the period of the running of the charter party the risks of McKay, as assumed by him, were only such fire, marine, or other risks of damage as were not covered by the fire and marine insurance which he had already agreed to, and which in fact he did procure. What such risks were is not very material, although there are risks not covered by such a policy. At any rate, as McKay procured the policy which he agreed to procure, and for the period agreed upon, no liability for the loss of the vessel attaces to him under this clause of the charter party. The cause of the loss we may assume was from one of the risks which would have been covered by the fire and marine policy, had that policy been in force. It had expired by its own limitation, and McKay was under no obligation to renew it. He had never in terms assumed a liability to refund for a loss of this kind. His agreement to respond for losses not covered by the insurance policy spoken of was limited to the period included in the charter party, one year from October 17, 1884. Thus, from whatever cause the loss occurred, the liability of McKay (and consequently of defendant) must be sought from some other clause of the charter party than the one now spoken of.

Another obligation assumed by McKay was to pay the rent as mentioned in the agreement, but there is no materiality in that liability so far as this question is concerned. The remaining obligation of McKay under this charter party is contained in that provision by which he agreed, in the language already quoted, to deliver the vessel to the company in New York harbor. It has been claimed on the part of the plaintiff in the courts below, and it is now urged here, that this promise to deliver was on its face an absolute and unconditional one, and a failure to fulfill it would not be excused by the entire destruction of the vessel before breach, and without fault on the part of the charterer. It is true that the vessel was not destroyed at the time when by the terms of the original promise McKay had bound himself to deliver it in New York harbor. The question is whether the contract to deliver was absolnte, and only to be complied with by an actual delivery within the time agreed upon, or whether a destruction of the thing hired, before breach, and without the fault of him who hired it, would not absolve the latter from his contract. If it would, there is the further question whether the facts herein do not show a waiver of the contract to deliver at the specified date, and an implied extension of the time for such delivery, and the destruction of the vessel within the time thus extended, without the fault of the hirer; or, at least, whether the facts proved were not enough to permit a finding of the fact of such waiver and extension. The case of Harmony v. Bingham, 12 N. Y. 99, is one of the leading cases of that class which must have controlled the judgment of the courts below in the case at bar. It was there reiterated, as a principle well founded in the law of contracts, that inevitable accident or any unforeseen contingency, not within the control of the party promising, was no defense to an action founded upon the express promise to do the thing and a failure of performance. An act of God, it was said, would excuse a party from performing a duty created by law, but not where such party had unconditionally engaged by express contract to perform. It is argued that here is an express promise to deliver this vessel in the harbor of New York, and, as the promise was not fulfilled, the promisor is liable, and hence the liability of the defendant as his surety. We do not think that the law applicable to the class of cases of which that of Harmony v. Bingham, supra, is a conspinous example, applies here.

The contract in this case comes, as it seems to us, under another class, which relates to the hiring for use of the thing hired, and where an express contract is made to redeliver the article hired upon the determination of the term of hiring. Even in such cases of express contract, there is implied a condition of the continued existence of the thing which is the subject of the contract, and if it perish without any fault of the hirer, so that redelivery becomes impossible, the hirer is excused. If a horse be delivered to one under an express promise to redeliver when demanded, and the horse die before demand and without fault on the part of the bailee, he is excused. Williams v. Lloyd, W. Jones, 179; Sparrow v. Sowgate, Id. 29. Mr. S. Martin Leake, in his Digest of the Law of Contracts, (at page 706,) says: ‘The authorities establishthe principle that where, from the nature of the contract, it appears that the parties must, from the beginning, have known that it could not be fulfilled, unless when the time for the fulfillment of the contract arrived, some particular specified thing continued to exist, so that when entering into the contract they must have contemplated such continued existence as the foundation of...