45 N.Y. St. Rptr. 578

Marcus B. Heilner, Resp’t, v. The China Mutual Insurance Co., App’lt.

(New York Superior Court, General Term,

Filed March 14, 1892.)

1. Insurance (marine)—Waiver of proofs of loss.

A refusal to pay on the ground that the policy has been cancelled excuses the assured from presenting full proofs of loss.

3. Same—Approval of risks.

An open policy of marine insurance provided that it should cover such risks “ only as may be approved and endorsed thereon.” No risks were endorsed on the policy, but it was the custom to enter the risks in a book furnished by the company and the company signified its approval by "writing an initial in the column headed “ Approved.” Held, that the appearance in such book of the initial against the risk sued for authorized a finding that it had been approved by the company.

8. Same—Cancellation.

The receipt of premiums on other risks after a loss has occurred is proof of the pendency of the policy, notwithstanding a prior notice that the company intended to cancel it. If such premiums were received under a mistake, they should he returned with notice of the mistake to prevent a continuance of the policy.

4. Same—Seaworthiness of vessel.

Testimony of the captain of a vessel that she was seaworthy and fit for the voyage, and of the owner as to repairs and 'that before the voyage in question she was thoroughly overhauled is sufficient prwna/aeii! proof of seaworthiness.

5. Same—Salvage—Expenses of defense of action.

Where the insurer after notice fails to defend an action for salvage services, it is reasonable for the assured to defend to prevent an unjust recovery, and may recover the expenses so incurred of the insurer.

<8. Same—Pleading.

Where the policy provides for payment of the loss in thirty days after proof thereof, a complaint which alleges that proofs of loss were exhibited, but does not allege when they were presented, is insufficient.

*579Appeal from, judgment entered upon report of referee.

Glarlc & Bell, for app’lt; Joseph A. Welch, for resp’t.

Sedgwick, Ch. J.

—The action is upon an open policy of marine insurance issued by the defendant. The action was referred and the plaintiff had judgment. The subject of the insurance was a cargo of coal.

It is objected by the defendant that before the referee there was not after the loss presented by the plaintiff the proof of loss intended by the policy. The words of the policy are 11 proof of loss, proof of interest and adjustment.” It may be admitted that the insured did not present, at least in full, the proofs named in the policy. The company, however, took the position that it was not liable because they had cancelled the policy. This, if it did not announce, yet it necessarily involved an intention not to require or not to receive proof of loss, which would be a transaction that would signify that the policy was not cancelled. Moreover, on the facts of the case a finding would be sustained that the acts, and declarations would justify the insured in thinking that the defendant did not require formal proof of loss to be made.

It is also argued by the learned counsel for defendant that the risk upon the cargo had not been approved, as the policy required. By the policy, it was to cover such risks “ only as may be approved and endorsed thereon.” In fact, the policy being with the insured, the company never approved or endorsed upon it the risks they took. When the policy was issued and given to the insured a memorandum book was given. According to the testimony of the agent of the defendant, the approvals and endorsements intended by the policy were made and to be made in this book, for he testified that when the entries of the book were filled in the book would be sent to the office, and then in case of approval the initials, “B. & P., atty’s,” would be placed in the column of the book headed “ approved.” There were no such initials in book opposite the name “John A. Post,” a boat which carried the coal insured. On the trial the plaintiff relied upon another entry made in the book, in the column “ approved.”

When it was intended to load boats with coal, and in advance of loading, the plaintiff would enter in the book the name of one or more boats and send the book to the defendant’s office. After being examined by the company it would be returned with the initial D in the column “ approved.” Such had been the course of business during the running of the policy. A referee would be sustained in finding that such initial signified to an insured that there had been an approval by the company, and as to the matter of approval, in fact, and the method in which it was regularly made, the evidence of the agent was not conclusive, and on the whole a referee could find for the plaintiff on this subject. This ground shows no reason for reversal.

It is insisted that the policy was definitely cancelled before the coal was put in the boat, the risk under the policy beginning at the loading of thp cargo. There was sent before the risk began a letter which announced the intention of the company to cancel *580the policy. To effect the cancellation it was necessary that some act should accompany this intention. The burden of proving this act was upon the defendant. It was not absolutely or incontrovertibly shown here. Whether or not it was done depended upon inferences that were conflicting and upon the comparative credibility of the witnesses. The referee has found upon enough evidence that there was not a cancellation.

On this point also the receiving of premiums was proof that the policy was pending within the intention of the defendant. It was received as to other coal after the loss in this case. The policy was an entire contract, and it all existed or no part of it did. It may have been the fact that the company’s officers believed that the risks paid for were pending at the time of the supposed cancellation, and, therefore, not affected by the cancellation. Such, however, was not the case, and to prevent the continuance of the policy beyond the time of the cancellation as claimed by the company, there should have been a return or an offer of return, with notice of the mistake of fact. Nothing of this kind was •done.

Sufficient prima facie proof of the seaworthiness of the boat was given by the plaintiff. The captain testified that the boat was seaworthy and fit for the voyage. The owner testified as to repairs to the boat from time to time ; that before the voyage she had been thoroughly overhauled, and that to him she appeared to be right.

On the trial it appeared that after the boat and cargo had been sunk in the bay they were raised by one Baxter, who sued the plaintiff in admiralty for the salvage services. The plaintiff notified the defendant of the pendency of this suit, and required that they should defend it.. The defendant did not defend. The plaintiff defended, and judgment was entered against him. On the present trial the plaintiff recovered, beside the amount of the-judgment in the admiralty suit, the costs of that suit, certain disbursements made in it, and also counsel fees to .counsel for services in the suit. The defendant contend that it is not liable beyond the amount of the judgment, arguing that the other expenses were' unnecessarily incurred, or, in other words, that the plaintiff should have prevented the admiralty suit by paying Baxter’s bill, or should not have defended the suit.

While between themselves the defendant was bound to pay the wrecking expenses, and to indemnify the plaintiff in that regard, yet in the admiralty salvage action the plaintiff would be bound primarily to pay the claim. Therefore when the defendant omitted to defend, it was reasonable that the plaintiff should appear by counsel to prevent any other recovery against him than .such as was just and in accordance with the facts. The referee was correct in allowing the amounts referred to.

It is necessary, however, that there should be a new trial. The defendant moved to dismiss the complaint on the following ground, among others, that it did not contain any allegation that proof of loss was exhibited to the defendants thirty day before the commencement. The complaint alleges that by the policy, in case of *581loss such loss, to be paid in thirty days after proof of loss and interest. It further alleges that the plaintiff caused to be exhibited to the defendant due proof of the said loss and damage, but that no part of the same has been paid, etc. There is an omission to allege that the proof was exhibited thirty days before the beginning of the action. Therefore it did not appear by the complaint that the loss was payable.

Judgment reversed, order of reference vacated, and a new trial ordered, with costs to abide the event.

Dugro and G-ildersleeve, JJ., concur.

Heilner v. China Mutual Insurance
45 N.Y. St. Rptr. 578

Case Details

Heilner v. China Mutual Insurance
Decision Date
Mar 14, 1892

45 N.Y. St. Rptr. 578

New York



Nothing yet... Still searching!

Referenced By

Nothing yet... Still searching!