New Haven Steamboat Co. v. Providence Washington Insurance

Barrett, J. (dissenting):

The plaintiff’s policy was: “ On Steamer ‘ C. H. Wortham,] * * * or whatever steamer may be employed upon the line in place of said steamer C. H. Northam] by the said New Haven Steamboat Company, said vessel to be employed between New York and New TIaven, Conn., and intermediate ports and places,” etc. The only other material clause as to the nature of the subject of insurance is a later one, which reads: Privilege to substitute and other steamer owned or chartered by the assured to run on said line in place of said steamier ‘ C. H. Northam,] and this policy shall attach to such steamer * * * to the same effect as if this policy were originally and specifically written upon the steamer so substituted, instead of upon said steamer.”

These words leave no doubt as to the precise intention of the parties. The first clause shows that the Wortham was not the absolute subject of insurance during the whole period. The insurance was upon the Wortham,, “ or whatever steamer may be employed upon the line in place of said steamer.” As soon as the Wortham ceases to run, the alternative provision takes effect, and the insurance becomes transferred to the vessel taking her place upon the line from New York to New Haven. But the policy then attaches to the latter steamer “ to the same effect ” as it had to the Worthann, subject, that is, to the same right of substitution in the plaintiff. Thus the plaintiff was entitled to make as many substitutions as it chose of steamers to run in the Wortham's place, and the insurance attached at once - to the vessel so substituted. It is equally plain *285that, should the Wortham resume work, it would again become the subject of insurance, not, however, under the substitution clause, but as the vessel originally insured. In the absence of other provisions, the insurance would have attached to it during the whole of the year from January 4, 1890, to January 4, 1891. The insurance is displaced only in favor of “ whatever steamer may be employed ” in place of it. If, however, there should be no such steamer, if, that is, the Wortham should be doing her own work, then the insurance would be upon her, and this would be true of every hour and minute throughout the whole of the insured period, no matter what prior changes might have been made upon the line. The intention was to indemnify the plaintiff for a year against loss upon the Wortham or upon the doer of the Wortham's work.

So far then the plaintiff’s right to recover seems clear. The only condition that could possibly affect that right will now be stated. The policy, by a clause immediately following the second one above quoted, giving the plaintiff its privilege of substitution, provides for “ Notice of such substitution to be given this insurance company at the time it is made or as soon thereafter as is practical.” The meaning of this is clear. Whenever another steamer is substituted to run for the Worthmn, the defendant is entitled to notice of the fact. Be the substitutes for the Wortham one or many, in each case the notice is necessary. But this provision cannot be tortured into meaning that the defendant must be notified when the Wortham resumes work. It is only in the case of a substitute for the Wortham that the notice is required, and the Wortham can neither be a substitute for herself nor a substitute for a substitute. She is the boat originally and principally insured, the contemplated chief worker on the plaintiff’s line. Other steamers may for a time take her place and do her work, and notice on these occasions is necessary. But to hold that notice is required when the Wortham again takes her place, is to read into the policy something which is not there and to commit a decisive breach of the fundamental rule of law that provisions in policies of insurance are to be construed most strongly against the insurer.

If, however, this construction of the policy were not the true one, the plaintiff was certainly entitled, as it requested, to have the jury decide whether or not it gave the defendant sufficient notice of the *286revocation of the substitution of the Oontinental for the Wortham, and the reinstatement of the latter. On May 10, 1890, as the defendant knew, the Elm Oity was running as substitute for the Continental under other policies upon the latter, amounting in all to precisely the same sum as that for which the Wortham was insured. On this 10th day of May, 1890, the,defendant was notified that the Elm City was entirely withdrawn from the route, and that the Oontinental would resume her place for the season. At this time the Wortham had been running again for nearly a month. The defendant knew that the plaintiff employed three boats on this line, the Wortham, the Oontinental and the Elm Gity, the latter being ordinarily a substitute boat. There is some evasive testimony on the part of Lethbridge, the defendant’s general agent, who executed the policy in suit, as to his knowledge of this fact; but that he did know it is perfectly apparent. Aside from what must have been disclosed to him by the policies and the substitutions made under them, we have his direct statement, on re-direct examination, that “ the line owned three boats and insured only two of them, with the privilege of substituting the other boat in place of the two insured in case they required it.” As the defendant’s policies were on running boats, the plain inference is knowledge on its part that the plaintiff kept two boats constantly running. Hence, a notice that the Elm Gity was to be taken off the route and that the Oontinental was to resume her place, plainly indicated that the Wortham was back at work at the time. Otherwise the plaintiff would have had only one boat running, an unlikely contingency which would have subjected the plaintiff to double premiums for a single insurance. This is apparent when we consider that the moment the Oontinental ceased to be a substitute for the Wortham she was no longer insured as such substitute under the Wortham's policy. She then resumed her insurance under her own policies. Consequently, the two premiums — one upon the Wortham!s policy and one upon the Continental's policies— could not have produced double indemnity to the Continental in case of loss. They would have been wasted; or, rather, one would have been wasted upon the Oontinental!s single indemnity.

The defendants could not have believed, after learning that the Elm Gity was withdrawn from the route and that the Oontinental had resumed her place for the season, that the latter thereafter con-*287tinned to run upon her own independent account and at the same time as a substitute for the Wortham. When the Continental resumed her place for the season, the defendants, therefore, knew at once that she had ceased to be a substitute for the Wortham. What then % The Fl/m City was gone from the route, the Continental was no longer a substitute for the Wortham, but was running independently under her own original policies. And the Wortham ?. What was the plain inference as to her ? Naturally that she, too, had returned to her work; that, like the Continental, she had resumed her place upon the line. What other alternatives were there ? And how do these other alternatives compare in the line of probability with tlie preceding view ? There were but two alternatives which could have entered the defendant’s mind. One that the plaintiff was running its line with but a single boat, the other that the plaintiff had chartered an outside boat to again act as a substitute for the Wortham instead of the Continental. But these were the barest of possibilities and could hardly have been contemplated by the defendant. The most natural inference was certainly that, as the Wortham’s substitute was gone, the Wortham herself had resumed her original place upon the line and under her own policy. How, then, can it be said that the jury might not properly have found that the notice of May tenth, coupled with the defendant’s knowledge of how the plaintiff’s line was equipped and run, did convey to the defendant the information that the Wortham was back at work and had resumed her original place upon the line ? We think that the jury might well have found that this notice, under the circumstances, did substantially convey such information; and, if it did, the requirement, if any, that notice of resumption should be given, was satisfied.

The claim that the action is barred by the provision in the policy that all claims under this Policy shall be void, unless prosecuted within six months from the date of the loss,” is untenable. This six months’ period of limitation does not begin to run until the loss becomes payable under the terms of the policy. (Steen v. Niagara Fire Ins. Co., 89 N. Y. 315, 323.) The policy provides, “ loss, if any, to be paid within thirty days after proof of same.” The proofs of loss were delivered to the defendant on February 3,1891, and the period of limitation did not commence till thirty days after this date, *288or March 3, 1891. Six months from the latter date would be September second and the action was commenced August nineteenth.

The exceptions of the plaintiff should be sustained and a new trial granted, with costs to the plaintiff to abide the event.

Ingraham, 3., concurred.

Motion denied, with costs, and judgment ordered for the defendant upon the verdict.