Cogswell v. Chubb — 72 N.Y. St. Rep. 20

Majority

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William B. Cogswell, App’lt, v. Percy Chubb et al., Resp’ts.

(Supreme Court, Appellate Division, First Department,

Filed January 24, 1896.)

Headnote

1. Insurance—Marine—Warranty.

The breach of an express warranty in a policy of marine insurance, whether material to the risk or not, or whether a loss happens through the breach or not, absolutely determines the policy, and the assured forfeits his rights under it.

2. Same.

Where a stipulation in such a policy, written in between printed portions thereof, is in the following words : “Warranted to navigate only the inland waters of the United States and Canada and not below the Thousand Islands,” going to the open ocean and then returning are a plain breach of the warranty, the consequence of which is to avoid the policy.

3. Evidence—Custom—Marine insurance.

Before usage can be appealed to for the purpose of explaining or giving effect to the meaning of an insurance policy, there must be proof that there really is a usage—something existing and in connection with which the underwriter is assumed to have taken the risk.

4. Same.

Where all that is in evidence on the subject is that it is customary for yachts and other craft, of large and small dimensions, whenever an international yacht race takes place, to accompany the competing boats over an ocean course, it is insufficient to establish a usage of the character to qualify an express warranty.

Appeal from a judgment entered on a verdict directed by the court in favor of defendants.

Everett P. Wheeler, for app’lt ; J. L. Ward, for resp’ts.

—The defendants in this action were underwriters *on a policy of marine insurance on the steam yacht Fie-seen, the property of the plaintiff. The insurance was for the term of one year, beginning April 10, 1893, for $21,000, at which sum' the vessel was valued, and these defendants were, by the terms of the policy to pay the 1-1000 part of any loss or damage occasioned by any of the perils insured against. On the 9th day of September, 1893, while in the lower New York bay, and under way, and in tow of another yacht, she came into collision with a steamship, and was damaged to the extent of about $16,000, and this action was brought to recover the 1-100 part thereof. The trial resulted in a direction to the jury to find a verdict for the defendants, from the judgment entered upon which, and from an order denying a motion for a new trial, the plaintiff has appealed.

A stipulation of the policy, written in between printed portions thereof, is in the following words: “ Warranted to navigate only the inland waters of the United States and Canada and not below the Thousand Islands.” It appears in the record that, on the 9th day of September, 1893, the Fieseqn, before the collision referred to, went out upon the high seas beyond the Sandy Hook and Scotland lightships, and into the open waters of -the Atlantic Ocean; and that fact is set up as a breach of warranty, avoiding the policy, and preventing a recover thereon. There does not appear

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to be any doubt on the evidence, that the vessel, on the 9th of September, had been on the open ocean, at "least ten miles off from the Sandy Hook Lighthouse, to the southward and eastward, as testified by Capt. "Wicks, of the Electra, and she was south and southeast of the Scotland light. Capt. Pressey, of the Vamoose, says the Fieseen raced with the boat commanded by him that day, and that the race began about two miles to the south and east of the Scotland light, and they ran about eighteen miles in varying courses. The witness Bulin says the Fieseen ran about ten miles east from the Scotland lightship. Mr. Stan wood swears she went about twelve miles east-northeast, directly, from Sandy Hook. The effect of the whole evidence is that the vessel went out of inland waters. Such waters are canals, lakes, streams, rivers, water courses, inlets, bays, etc. and arms of the sea between projections of land. That ordinary and accepted signification of the words “inland water ” must be considered the sense in which the parties used them in their contract of insurance, unless, by agreement or understanding, some other was assigned to them; and there is nothing in the record to show that a different or wider meaning was intended to given them. Going to the open ocean, and then returning, was a plain breach of the warranty, the consequence of which was to avoid the policy; for, hard as the artificial rule may be, it is too firmly settled to be questioned that the breach of an express warranty, whether material to the risk or not, whether a loss happens through the breach or not, absolutely determines the policy, and the assured forfeits his rights under it. Chase v. Insurance Co., 20 N. Y. 52 ; Stevens v. Insurance Co., 26 N. Y. 397 ; Day v. Insurance Co., 1 Daly, 13 ; Westfall v. Insurance Co., 2 Duer, 449 ; 1 Phil. Ins. p. 418, § 762.

It is claimed, however, on the part of the appellant, that the words “inland waters,” as used in the policy, are. not limited to their ordinary signification, but that a usage existed, respecting the waters frequented by yachts such as the Fieseen, in view of which usage the policy was written, and that the warranty should be construed by that usage, and a broader meaning applied to the words,—one that would include in the category of inland waters the roadstead outside of Sand Hook, and as far as the yacht went out upon the sea on the 9th of September. Evidence of usage to explain, or rather, to give effect to, the meaning of the policy, is very commonly resorted to in cases of this character; and, as said by Mr. Phillips (1 Phil. Ins. p. 73, § 119), “ the subject-matter of marine insurance and other mercantile contracts makes it necessary to go out of the written instruments in order to interpret them.” But before usage can be appealed to there must be proof that there really is a usage,—something existing and in connection with which the underwriter is assumed to have taken risk. All that is in evidence on the subject is that it is customary for many yachts and other craft, of large and small dimensions, whenever an international yacht race takes place, to accompany the competing boats over an ocean course. This scarcely establishes a usage of the character to qualify an express warranty. International yacht races are of infrequent occurrence. That yachts covered

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by insurance go upon the ocean to follow them does not appear. This policy was written April 11, 1893. It is not shown that an international yacht race was in contemplation for the year during which the policy was to run. Attending the yacht race at Newport, and the custom of yachts to assemble at that port in the summer for the squadron races, do not establish á usage, for the same reasons. All of this testimony is insufficient to prove that the parties contracted for anything other than what is expressed in the plain and accepted meaning of the words of the warranty.

The further contention is made that, the loss happening after the policy attached, and -the breach of the warranty in no wise producing or contributing to the loss, but it being occasioned by independent causes, the plaintiff may recover, notwithstanding the breach. The learned counsel for the plaintiff admits that the English authorities are against this view, as they very decidedly are. The American cases of- breaches of implied warranties of seaworthiness, cited on the argument, and in the appellant’s brief,' do not establish a contrary rule affecting the express warranty contained‘in this policy.

We fail to see the pertinency of the argument made respecting lights carried by certain vessels under the requirements of the navigation laws of the United States. That steamers plying between New York and Newport, and New York and Long Branch, and New York and Coney Island, carry the light prescribed for vessels navigating inland waters, in addition to those of ocean-going steamers, is doubtless true; but they are the same lights required •of coastwise steamers, and those plying between the places mentioned may be, and probably are, classed as such.

The judgment and order appealed from must be affirmed, with costs.

All concur.

Cases cited

Chase v. Hamilton Insurance 20 N. Y. 52 N.Y. p. 21
Stevens v. Commercial Mutual Insurance 26 N. Y. 397 N.Y. p. 21