Reliance Marine Insurance v. Herbert — 3 A.D. 593

Majority

p. 593

The Reliance Marine Insurance Company (Limited), Appellant, v. Henry L. Herbert and Gilbert I. Herbert, Composing the Firm of H. L. Herbert & Co., Respondents.

Headnote

Marine insurance — a suppression of the fact that the insured, the owner of the merchandise, is the charterer of the vessel avoids the policy.

It is a fact material to the risk in marine insurance that the owners of the property shipped upon a. vessel are also the charterers of the vessel.

If the insured suppresses this fact when the risk is taken the policy is void, and if the insurer pays the loss while still in ignorance of this fact, he is entitled to recover the money paid.

Appeal by the plaintiff, The Reliance Marine Insurance Company (Limited), from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 3d day of September, 1895, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 20th day of June, 1895, denying the plaintiff’s motion for a new trial made upon the minutes.

The action was brought to recover moneys paid by plaintiff under a mistake of fact for a loss under a marine insurance policy. The policy was issued March 1,1891, to the Lehigh and Wilkesbarre Coal Company, on account of whom it might concern, insuring coal

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laden on board vessels, boats or barges, against perils of the sea, etc. Thereafter, and about November 5,1891, the coal company shipped 461 tons of coal on board the barge Macy, to.be carried from Port Johnson across the bay to Fifty-third street, East river, and there delivered to the defendants. The defendants, from the time the coal was loaded on the barge, were to be the owners of the coal. November 6,1891, plaintiff accepted this coal as one of the risks covered by ' the policy, and insured thé same in the sum of $1,900, and on the same day, while the barge was being towed across the bay to New York, it capsized, and all the coal excepting thirty-four tons was lost. Only thirty-four tons were delivered to.the defendants. About November 13, 1891, the coal‘company made proofs of loss of the coal, and thereafter, and March 2,1892, the plaintiff paid' to the coal company on account of the loss $1,156.14, and the coal company paid the money so received to the defendants. At the time the plaintiff paid the money to the coal company the coal company assigned and transferred to the plaintiff all their right, title and interest in-the coal lost, and the proceeds thereof, and all that could in any way be made, saved or realized from the damage or loss, with full power to take and use all lawful ways and means to so make and save and realize said property or its proceeds.

At the time the coal was shipped and at the time it was lost the defendants were the charterers of the barge which carried it. It is claimed by the plaintiff that it was not informed, at the time the risk was taken, that the owners of the coal were also the charterers of the barge on which it was shipped, and that the policy was, therefore, void. It is claimed by the defendants that the plaintiff was informed of this fact immediately after the loss, and that. the payment of the money was, therefore, a voluntary payment, made with knowledge of this fact, and that the money cannot, therefore, be recovered back on the ground that it was paid under a mistake of fact.'

The court charged the jury that the fact that the owners of the coal insured were also the Charterers of the barge was a fact material to the risk, and that the plaintiff was entitled to be informed of this fact at the time the risk was taken, and that if such information was not given, but the fact was suppressed, then, the plaintiff had the right to repudiate the policy. The agent of the plaintiff, who-

p. 595

issued this policy, testified that this information was not given him at the time the risk was taken.

No evidence was given in the case tending to show that such information was given to the agent. The court, nevertheless, left to the jury, under the objection and exception of the plaintiff, the question of fact whether such information was given, or whether the fact was suppressed. There was conflicting evidence as to whether this information was given to the plaintiff after the loss and before the money was paid.

W. W. MaoFarland, for the appellant.

L. B. Adams, for the respondents.

There seems to be no dispute as to the law charged by the trial court, that the suppression of the fact, when the risk was taken, that the owners of the coal and the charterers of the barge were the same persons rendered the policy void and enabled the plaintiff to repudiate it, and if the plaintiff paid the amount of the loss while still in ignorance of this fact, it was entitled to recover back the money paid. Nor does there seem to be any dispute but that if the plaintiff acquired knowledge of this fact after the loss and before the money was paid, it was a voluntary payment, was not paid under any mistake of fact and could not be' recovered back. The rights of the parties were, therefore, dependent upon the determination of the question as to when, if ever, the plaintiff acquired the knowb edge of this fact. There was evidence on both sides and quite con-' flicting as to whether the plaintiff was informed of this fact after the loss and before the payment of the money, and the finding of the jury upon this branch of the case should be conclusive upon us.

There was no conflict of evidence as to the question whether the plaintiff was informed of this fact at the time the risk. was taken. This question was, therefore, improperly submitted to the jury. The plaintiff excepted to its submission. The court said that there was no direct evidence of the fact that the only witnesses in that connection were those of the defendants, and he left the question to be determined by the jury. The court permitted the shipping clerk of the coal company to testify that he knew of the fact in question at the time the risk was taken, and his books were produced and

p. 596

put in evidence. ■ This evidence, however, did not tend to show that the jfiaintiff had any knowledge of the fact in question. It appeared that the hooks were shown to the plaintiff’s agent when the risk was taken, but that gave no information as to the fact in question. This is the only evidence to which the court could have referred in the charge, and the jury may very well have been misled by this evidence, and the charge of the court, and may have based their verdict-upon a finding that information of this fact was given to the plaintiff when the risk was taken. We do not think, in view of the meagre evidence to support a finding that information of this fact was given to the plaintiff after the loss and before the money was paid, that we can say that the jury based their verdict upon the finding of a voluntary payment rather than the finding that the fact was not suppressed at the time the risk was taken.

. This error of the court calls for a reversal of the judgment and a new trial.

•• The judgment should be reversed and a new trial granted, with costs to the. appellant to abide event.

Van Brunt, P. J., Patterson and O’Brien, JJ., concurred.

Judgment reversed and new trial ordered, with costs to the appellant to abide the event.