Lowenstein v. Lombard, Ayres & Co.

O’Brien, J.:

While there is a sharp and irreconcilable conflict between the plaintiff and Middleton as to just what was said at the interview during which the contract was made,. it having been by the jury resolved in plaintiff’s favor,- we must assume, in disposing" of this appeal, the version given by the plaintiff and his witnesses to be the . correct one. In Leinkauf v. Lombard, Ayres & Co. (12 App. Div. 302), where the action, as here, against the same defendant was to recover the value of a shipment of goods made on the same steamship Vidette, which was lost in transit, much of the testimony included in the record in this case and many of the questions now .presented Were considered and disposed of. The plaintiffs there claimed “ to recover both on the ground of a breach by the defendant of a contract to insure the goods for the benefit of the plaintiffs, and for negligence in shipping them by an unseaworthy vessel.” The respondent insists, however, that this case is to be distinguished in. two aspects: First. That the oral contract between plaintiff’s firm and Middleton was not an- “ exceptional ” one, by which. the plaintiff’s firm sought to secure different and .better terms than were afforded by the usual contract with Mobile shippers, but was the line’s usual contract made at this time, and expressly so stated by Middleton, and that plaintiff had the right to rely upon- Middleton’s representations. Second. That the verdict was a general one, founded upon the whole case, and it is, therefore, to be- assumed that the jury decided in plaintiff’s favor, not only as to the failure to insure, but also upon the ground that the steamship was unseaworthy. An attempt is also made to distinguish the two cases in respect to evidence by third persons of declarations by the agent Middleton as to his manner of transacting business, which upon the former appeal was held to be incompetent.

Without going further, we might base our conclusion upon the ground that the respondent has failed to satisfy us that there is any distinction between the evidence thus introduced upon this trial and that which was expressly held in the Leinkauf case to have been incompetent and prejudicial and as alone requiring a reversal of the judgment.

So too with respect to the'form of the verdict. It is true that we have not upon this appeal the concession made in the Leinkauf case, that the verdict proceeded upon the insurance issue. It appears here, however, as in that case, that the verdict was for the precise amount which the plaintiff claimed on the insurance issue, and whilst the difference in the amount on the one ground and the other is not very large, the transportation charges being-about sixty dollars, the verdict would still be for a different sum. Thus, upon the contract to insure, the judge instructed the jury that they might “ find a verdict in favor of the plaintiff for the sum of $13,072, that being the value of the goods lost, with interest from July 1st, 1887. It is made up of the invoice price, which was. $7,836.23, and ten per cent added, which makes $8,619.85, and interest on this gross amount * * * from July 1st, 1887, down to the present time, making in ail, as I have.stated, $13,072.” The judge further charged : “If yon find that there was no contract to insure, but there was a failure upon the part of the defendant to-perform its duty as common carriers, you may find a verdict in favor of the plaintiff for the value of the goods at the port of delivery,, to wit, Mobile, with interest from July 1, 1887, deducting any amount due for transportation.” As the latter was not the rule applied by the jury, and the amount was that which the court stated the plaintiff was entitled to recover upon the insurance issue, we-must conclude that their verdict was not based upon the breach of duty claim.

The further contention that this was not an exceptional contract is also without force. It is not disputed that the plaintiff’s firm received, notice by the circulars,, etc., of the conditions upon which the defendant would allow insurance free to shippers .; and thus, as held in the Leinkauf case, “ the very fact that they are dealing with an avowed agent is sufficient to put them upon their guard, and, where they have notice sufficient to put them upon inquiry that the agent is transcending the limits of his authority, the principal is not bound by the act of the latter.” It is true that in the Leinkmof case the testimony was directed to showing that the parties, with express knowledge of this condition affixed to insurance, claimed to have contracted with Middleton to have the defendant waive it; whereas, in this case, there was no special mention made of a waiver of' this condition, according to the version given by plaintiff of the interview between his partner and Middleton when, as claimed, the oral contract was made. As the other lines, how-' ever, did not require shippers at the time of shipment to declare the value of goods in order to obtain the benefit of insurance, and as the oral contract, as claimed by plaintiff, was that the defendant would receive the goods upon the same terms and conditions, necessarily, it included the idea that the defendant would not exact the condition of requiring plaintiff to declare the value of the goods before shipment, or stamp the value upon the bills of lading. It will be noticed, therefore, that the terms and conditions accorded to plaintiff upon the shipment in question were the same as those of all the other lines, except the requirement, that in order to obtain the insurance free the value should be stated before shipment :and stamped upon the bills of lading. In this respect we. think the Levnkcbuf case, upon its facts, Was stronger in favor of the plaintiffs’ recovery than in the case, at bar, because, in that case, it was testified that this regulation or condition, after being fully discussed, and as the result of an agreement reached between the parties, was expressly waived in favor of Leinkauf; whereas, here, there was no discussion bearing specifically upon the point as to whether the defendant was to waive the regulation requiring the value to be given before shipment, the contention. proceeding .entirely upon the assumption that, as the regulation or condition was something which the defendant required, and which the other lines did not require, therefore, when the defendant entered into an oral contract to give' the same terms as on the other lines, it was implied that it should impose no such exaction. It might well, however, give rise to a discussion whether the requirement of stating value was or was net a reasonable regulation which it was incumbent upon the plaintiff’s firm to observe in order to obtain the benefit of the oral contract which it made, of getting the same terms and conditions as it would have secured if it had shipped by the other lines.

If, however, we regard this as not weakening in any way the plaintiff’s claim, and assume that it makes his case as strong in this aspect as in the JLeinkauf case, we are brought to the same question there presented, as to whether an oral contract made with the agent at Mobile, which undertook to contract upon different terms and conditions from those contained in the notices sent from the defendant’s main office, and which were received by the plaintiff and the shippers in Boston, was not one which put the plaintiff upon inquiry to determine the extent of Middleton’s authority to vary, change or set aside such conditions in favor of some or all shippers at" Mobile. Whether we characterize the oral contract as an exceptional one or not, it is clearly one. that was in contravention of the express instructions contained in the notices sent from Hew York, and which, according to the evidence of the defendant, Middleton had no authority in any way to alter. It will be seen that we have pro-needed in this discussion with a view to determining whether the Levnltauf case was controlling; because, regardless of what may be the personal views of any member of this court, we are bound by that decision, and having been unable, upon examination, to find any facts so different in the two records as to justify our distinguishing the two cases upon the controlling facts and principles, we think, upon the authority of the Levultauf case, that this judgment must be reversed and a new trial ordered, with costs to the "appellant to abide the event.

Patterson, Williams, Ingraham and Parker, JJ., concurred.

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