Court Calendar for Wednesday, June 30, 1869
United States Circuit Court – Southern District
Before Judge Blatchford
Insurance – Notice of Loss.
Francis M. Clement et al vs. The Phenix Insurance Company of Brooklyn, N.Y. – This action was tried before the Court without a jury. It was brought on a policy of insurance issued by the Phenix Insurance Company of Brooklyn, N.Y., to A.H. Cardozo & Co., “on account of whom it may concern” for the sum of $15,600, on the 8th of August, 1867, on fifty-two hogsheads of tobacco, lost or not found, valued at $300 per hogshead, on transportation by steamer and railroad from Dycusburg, Ky., to New-York, being the property described in a bill of lading therefor, dated July 22, 1867. The tobacco belonged to the plaintiffs, who resided at or near Dycusburg. On the 22d of July, 1867, they placed in charge of one McCoy, at Dycusburg, who by a written and printed agreement then signed by him, in the shape of a receipt or bill of lading, and in which he described himself as contracting agent, contracted to deliver it at New-York to A.H. Cardozo & Co. The tobacco was shipped by McCoy at Dycusburg for Paducah, where it was shipped on a steamboat called the Mary Erwin, to be carried up the Ohio River to Cincinnati. The bill of lading was forwarded from Dycusburg to the plaintiffs to A.H. Cardozo & Co. at New-York and was received by them on the 2d of August. The insurance was effected at New-York on the 8th of August. The Mary Erwin struck a log or snag in trying to back off from a reef on which she had grounded on the 1st of August, about forty miles west of Cincinnati, and sank. The tobacco in question was submerged and damaged by water. It was rescued and taken to Cincinnati and sold there at auction under the direction of an average adjuster and netted the sum of $812.11. The defendants set up as a defence that A.H. Cardozo & Co. were advised of the loss of the tobacco before they procured the insurance by a letter written and mailed by McCoy at Cincinnati on the 5th of August, addressed to A.H. Cardozo & Co., at New-York, and they introduced evidence to prove the fact that a letter written by McCoy at the same time to R.L. Maitland & Co., of New-York informing them of the loss of some property of theirs on the Mary Erwin, was received by them at New-York as early as the 8th of August. They gave, also, evidence to as to the regularity of the mail communication between Cincinnati and New-York, and the fact that a letter mailed at Cincinnati for New-York on the 5th of August ought to have reached New-York in due course not later than the 7th of August, and relied upon these facts to induce the conclusion that A.H. Cardozo & Co. must have received the letter. No copy of the letter was put in evidence. The defendants also claims that as McCoy had notice in Cincinnati as early as the 5th of August of the loss of the tobacco; and as he was the agent of the plaintiffs to transport it to New-York, and as they had put it in his custody, to be retained therein at least till it reached Cincinnati, he was bound to communicate notice of the loss to Cardozo & Co by a telegraph dispatch; that whether he did or did not communicate with Cardozo & Co. by writing to them, he was advised of the receipt, bill of lading or contract which he entered into at Dycusburg, that the tobacco was to forwarded to Cardozo & Co. at New-York, and that he was bound immediately on hearing of the loss to adopt the most speedy means of communication known to the commercial world for imparting information of the loss to the consignees, in order to guard against a possibility of their effecting an insurance after the loss had happened and in this way notice to McCoy became in law notice to Cardozo & Co. In support of this view the case of Proudfoot vs. Montefiore, 2 Eng. Law Rep. Q. B., 511, was cited.
Held by the Court—That the defence that Cardozo & Co had notice of the loss before they effected the insurance was not satisfactorily made out. That the evidence relied upon to establish that fact being entirely circumstantial, is not sufficient as against the positive denial by the members of the firm when examined on that point. That the burden of showing that such a letter was sent, as well as that it was received was on the defendant, and that they had failed to make out either point. As to the second defence, founded on the agency of McCoy. That the case cited was undoubtedly on the facts exists in this case; that McCoy was not the agent of the plaintiffs for any purpose connected with procuring insurance on the tobacco. That hence, in accordance with the doctrine held by the Supreme Court in General Interest Insurance vs. Ruggles (12 Wheat, 408), a knowledge of the loss on the part of McCoy would not affect the plaintiffs and vitiate the policy. That McCoy was merely an agent or his implied legal obligation through the plaintiffs to the underwriters was not of such nature as to make his failure to communicate by telegraph to the plaintiffs operate as vitiation of the policy.
Decree for the plaintiffs for $16,543.57, of the 9th of June 1869.
For the plaintiffs, E.W., Stoughton; for the defendants, Scudder & Carter.
Source: New York Times, June 29, 1869