Jellinghaus v. New York Insurance — 21 N.Y. Super. Ct. 281

Majority

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William Jellinghaus, Respondent, v. The New York Insurance Company, Appellants.

Headnote

1. A marine policy contained the following clause: “ In case of a partial loss by sea, or damage to dry goods, cutlery or other hardware, the loss shall be ascertained by a separation and sale of the portion only of the contents of the packages so damaged, and not otherwise.” Upon a loss occurring, the agent of the company instructed an auctioneer to sell the" goods, which was not objected to by the assured. The auctioneers failed before paying over all the proceeds. ; Held, that the company were liable for the proceeds unpaid, if it could be shown that the assured gave up the goods to the company to be sold by them, and the company assumed the sale and control of the goods as their own, and caused them to be sold on their own account, or if it could be

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shown that they were delivered upon an arrangement that the company should take the goods and make the sale at their own risk; but otherwise the company were not liable.

2. Held further, that it was for the jury to say upon the whole evidence in this case whether the arrangements alleged by the plaintiff were made, and the assistant or vice-president had authority, or whether the acts of the vice-president were ratified, approved, and sanctioned by the company.

3. The vice-president of an insurance company does not, merely by virtue of his office, have authority to receive, from the insured, goods which are injured, and to agree with him that the same shall be the property of the company, or shall be sold under the direction of the company and at their risk, so as to render the company responsible for the solvency of auctioneers employed to sell the goods. Such authority is not necessarily involved in the power to adjust losses.

(Before Bosworth, Ch. J., and Hoffman and Woodruff, J. J.)

Heard, April 9th;

decided, June 1st, 1861.

Appeal from a judgment. This was an action to recover the price which twenty-seven cases of damaged hardware, which had been insured by the defendants, on a voyage from Bremen to Hew York, were sold for, at auction in the Oity of Hew York.

This cause had been twice before tried in this Court. On the first trial, which is reported in 1 Sandf., 18 , it appeared by the evidence that the insurers named an auctioneer to sell the damaged goods, and the insured, at their request, prepared the goods for sale, and sent them to the auctioneer, who sold them, and failed without accounting for the proceeds; and the Court held that the appointment of the auctioneer must be deemed the joint act of the parties, and that'the insurers were not liable for the loss by his failure. On the second trial it was proved that the Vice-President of the insurers accepted the goods; and the court held that his authority to do so was not to be presumed, and that a verdict for the plaintiff could not be sustained, and a new trial was ordered. (6 Duer, l.)^[1]

The third trial was had before Mr. Justice Woodbtjee, and a Jury, on the 24th day of January, 1859. The following facts were admitted by both parties on the trial.

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That on the 20th of October, 1847, an open policy of insurance for $100,000 was made by the defendants with Spies, Christ & Go., of the city of Hew York, merchants, on account of whom it might concern, on merchandise on board vessel or vessels, from Hamburg, Antwerp, Bremen, or Havre.

That in or about July, 1848, forty-six cases of hardware, covered by said policy, and belonging to the plaintiff, were shipped from Bremen to Hew York on board the ship Charlotte Reed.

That the forty-six cases of hardware, on the arrival of the said ship, were delivered to the plaintiff’s agent in Hew York, and that thirty-five of the said cases were damaged by sea water.

That Spies, Christ & Co. assigned to the plaintiff their right to claim under the policy for such damage.

That the amount of damage on eight of the said thirty-five cases was agreed upon between the plaintiff’s agent and the defendants at the sum of $88.84.

That the invoice value of the remaining twenty-seven cases was $2,442.57, and that they were insured to that amount under the policy.

That the net market value of the said twenty-seven cases, if the same had not been damaged, was $4,969.16.

That the said twenty-seven cases were sold at auction, in the City of Hew York, on the 21st September, 1848, and that the proceeds of such sale amounted to $2,357.14.

That the auctioneer’s charges and commissions for selling the said twenty-seven cases amounted to $117.86.

That the expense of cleaning the hardware in the twenty-seven cases, and putting the same in good order for the sale at auction, was $8:98; and that the auctioneer failed to pay over the proceeds of the sale to either party.

The plaintiff claimed that by taking the control and management of the goods, with the consent of the insured, and causing them to be sold in their own name, and for their own account, the defendants became responsible to the plaintiff for the proceeds of the sale.

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The defendants claimed that the sale was made in pursuance of a clause in the policy, which was in these words : “In case of partial loss by sea, damage to dry goods, cutlery, or other hardware, the loss shall be ascertained by a separation and sale of the portion only of the contents of the packages so damaged, and not otherwise; and the same practice shall obtain as to all other merchandise, as far as practicable.”

The evidence offered by the plaintiff was to the effect, that the Assistant President or Vice-President of the defendants, on adjusting the loss, said to the agent of the insured that the Conqiany would require the twenty-seven cases of damaged goods to be sold at auction; that the auctioneers were employed by the defendants or their agent; that the auctioneers rendered their account of sales to the defendants, and that the defendants gave the agent of the insured an order on the auctioneers for payment of the proceeds.

At the close of the plaintiff’s evidence, the counsel for the defendants moved that the complaint be dismissed and the plaintiff be nonsuited; which motion was denied, and the defendants excepted.

The defendants’ evidence went to show, that the auctioneers were designated by the agent for the insured, and that the Vice-President of the defendants reluctantly as sented to employing them instead of the Company’s regular auctioneers.

The Counsel for the defendants, after offering in evidence the charter of the defendants, renewed his motion that the complaint be dismissed; and the Judge refused to grant it, to which decision the defendants’ Counsel excepted.

The Judge charged the Jury as follows:

“The claim made in this case, although it arises out of a policy of insurance, and alleged acts of the parties done in consequence of their occupying to each other the relation of insurer and insured, does not, in strictness, arise on the policy of insurance, nor does it necessarily involve

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questions of insurance law. The Company having, as is conceded, paid the actual loss under the policy incurred by the perils insured against, the controverted question is, whether the defendants are liable to the plaintiff for the proceeds of the sale of twenty-seven cases of the insured goods sent to the auction and sold. The defendants claim that the sale was made in pursuance of the clause in the policy, which is in these words: “In case of partial loss by sea damage to dry goods, cutlery, or other hardware, the loss shall be ascertained by a separation and sale of the portion only of the contents of the packages so damaged, and not otherwise ; and the same practice shall obtain as to all other merchandise, as far as practicable.” If nothing more existed in the case, he further said, than a sale, in pursuance of that provision, it would not, of itself, render the Company liable for the proceeds. That provision pointed out the mode of ascertaining and fixing the amount of loss. Both, in such case, would be interested in the sale; the plaintiff would be interested as owner, the defendants as insurers. * * * * Upon the mere facts that the parties agreed upon an auctioneer to sell the goods, for the purpose of selling these goods in order to ascertain the amount of loss or damage, and that a sale was made for that purpose, the defendants were not liable; and that the evidence in the case was not sufficient to make them liable, upon the idea of an agreement to take these goods, as purchasers, upon a sale by the plaintiff to them of the goods.

“ If the Jury find that the plaintiff gave up the goods to the defendants to be sold by them, and the Company assumed the control and sale of the goods as their own, and caused them to be sold for their own account, or if they were delivered upon an arrangement that the Company should take the goods and make the sale at their own risk—if, in this sense, the goods were abandoned to them and were accepted by them, then they are liable to the plaintiff for the proceeds unless the arrangement was made without competent authority.” * * * * * *

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“ The Jury are not to regard any of the acts of the auctioneer in advertising, cataloguing and otherwise, respecting the goods or their sale,' or accounting for them as evidence of the defendants’ acts, unless the Jury are satisfied that they did so with the defendants’ authority,, or unless they find that the Company ratified such acts.

“The alleged arrangement is said to have been made with the Assistant President or Vice-President, Mr. Satterthwaite. It does not appear that, by virtue of his office, he had any authority to make such an arrangement as is alleged and claimed in this case. Mor can I say, as matter of law, that he had any such authority. Such authority is not necessarily involved in the power to adjust losses.

“It is for the Jury to say upon the whole evidence, whether the arrangements alleged by the plaintiff were made, and the assistant or Vice-President had authority, or whether the acts of the Vice-President were ratified, approved and sanctioned by the Company.. The various circumstances in evidence, beginning with the notices of loss, the action of the Vice-President in adjusting the loss, and the matter of the sale, followed by the reception by the Company of the account of the sales as made up for the account of the Company, and their payment of so much of the loss as appeared due under the policy, and other circumstances, including the evidence in regard to the' interview between the auctioneer and the officers of the Company, are insisted upon by the plaintiff as warranting the inference that the Company authorized or approved the arrangement which the plaintiff alleges was made.”

The Jury found a verdict for the plaintiff for $2,102.13.

Judgment having been entered thereon, the defendants appealed.

R. S. Emmet, for appellants.

B. D. Silliman, for respondent.

The law of the case was, to a great extent, settled when it was before the General Term, in June, 1856. ( 6 Duer, 1 .) The rule declared at a previous term, was recognized, that the plaintiffs could not succeed in the action without showing that the defendants took the goods as their own, and sold them as their own.

The learned Judge, at the trial, charged the Jury in accordance with this view: “ If the Jury find that the plaintiff gave up the goods to the defendants, to be sold by them, and the Company assumed the sale and control of the goods as their own, and caused them to be sold on their own account, or if they were delivered upon an arrangement that the Company should take the goods and make the sale at their own risk—if in this sense the goods were abandoned to them, and Avere accepted by them, then they are liable to the plaintiff for the proceeds, unless the arrangement was made without competent authority.” The learned Judge also charged distinctly, in conformity with the principles established by the General Term, in respect to the authority of Mr. Satterthwaite, and he submitted the case to the Jury as follows: “ It is for the Jury to say, upon the whole evidence, whether the arrangements, alleged by the plaintiff, were made, and the Assistant or Vice-President had authority, or whether the acts of the Vice-President were ratified, approved and sanctioned by the Company.” He called their attention to the evidence tending to establish, or bearing upon one or other of these propositions.

Ho exception was taken to the charge, or any part of it, and no exception for not charging according to either of the requests to charge.

Thus the case is before us upon two exceptions only— one for the refusal of motions to dismiss the complaint; the other as to the admission of evidence relating to explanations of certain receipts.

The first motion Avas made after the plaintiff had rested. The evidence then given by the defendant's was the testi

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mony of Mr. Lyell and of Mr. Sattertliwaite, a stipulation signed by the attorneys, certain acts of the Legislature, and an admission as to the original complaint in the action and its contents.

We are of opinion that there was sufficient testimony before the Jury when the motion was first made, as well as when it was renewed after the defendants rested, to justify the Judge in submitting the questions to the Jury in the manner he did.

The other exception arises in this manner: Receipts of Spies, Christ & Co., signed by Meynen, their clerk, were proven, and one was for $250, in full for balance of par average and per Charlotte Weed. The evidence of Meynen was read from a printed case. He had been asked whether at the time of these receipts, there was not an agreement with the defendants that the receipts of those payments should not prejudice any claim the owner of the hardware had against the Company for the proceeds of the sale at auction. The Counsel of the plaintiff read a stipulation that the testimony of Meynen might be read from the printed case on subsequent trials, with the same effect as if the witness was present, and gave his testimony. An objection was made, overruled, and the defendants excepted.

It appears to us that this point is covered by what has been said by the Court before. ( 6 Duer, 4 .) “ The ruling of the Judge was excepted to, for allowing evidence that the Company had agreed that the receipts given by Meynen, should be without prejudice to the claim upon the Company for the proceeds of the sale at auction. The defendants do not include this exception in their present points, and we apprehend the objection was not entitled to any weight.”

Judgment affirmed, with costs.