Opinion
No. 295.
May 6, 1929.
Appeal from the District Court of the United States for the Southern District of New York.
Action by Simon Gutner and another, copartners doing business under the firm name and style of S. Gutner Bros., against the Switzerland General Insurance Company of Zurich. From a judgment dismissing the complaint, plaintiffs appeal. Affirmed.
The plaintiffs, as partners in business, sold silk yarn in New York. In December, 1924, they had a quantity of such yarn to be shipped from Philadelphia by truck. Before shipment, they procured from the Insurance Company of the State of Pennsylvania a policy of insurance in the sum of $7,500, covering such merchandise in transit. This policy contained the following clause:
"This policy does not cover merchandise otherwise insured, prior or subsequent hereto in date, whether such insurance is fire, marine, inland, floating, specific, or insured bill of lading, excepting for the excess of value beyond the amount of such insurance, and shall not be liable for any loss, unless the amount of such loss shall exceed the amount of such other insurance, which said excess only is declared to be under the protection of this policy."
After such insurance was obtained, and while it was in force, the plaintiffs applied to the defendant for insurance on the same merchandise and had issued to them a binder, which provided for a standard policy of the defendant in the sum of $7,500. After the binder was issued, but before the policy therein provided for was delivered, a truck-load of the merchandise covered by insurance in both companies was stolen in transit. This resulted in a net loss to the plaintiffs of less than $7,500.
The standard policy of the defendant above referred to contained a clause as follows: "It is expressly agreed that this insurance shall not cover to the extent of any other insurance whether prior or subsequent hereto in date, and by whomsoever effected, directly or indirectly, covering the same property, and this company shall be liable for loss or damage only for the excess value beyond the amount of such other insurance."
Some evidence was introduced without objection tending to show that the plaintiffs actually applied for insurance unlimited by the clause just quoted, and that it was understood that the policy of insurance to be issued would not contain such clause. The court expressly found such evidence to be unreliable.
This cause was tried by jury in the United States District Court for the Southern District of New York, where a special verdict was rendered on an issue not involved in this appeal. Both sides moved for a directed verdict. The motion of the defendant was granted, and the complaint was dismissed upon the merits. The plaintiffs appealed.
Pfeiffer Crames, of New York City (Alfred B. Nathan, of New York City, of counsel), for appellants.
Bigham, Englar Jones, of New York City (Arthur W. Clement and Henry J. Bogatko, both of New York City, of counsel), for appellees.
Before MANTON, L. HAND, and CHASE, Circuit Judges.
Since the trial court found unworthy of belief the evidence tending to show that the binder sued upon was not written according to the plaintiffs' application, we need concern ourselves no further with the plaintiffs' claim on argument concerning the effect of such evidence. Without this, it would be well to bear in mind that the plaintiffs have seen fit to bring this suit at law to enforce the terms of the binder as written, rather than to take any appropriate measures to have the writing reformed.
Accordingly, the outcome of this appeal depends upon the effect of the defendant's excess insurance clause on the insurance in suit, in the light of the Pennsylvania policy outstanding when this insurance was obtained. The Pennsylvania policy is not here sued upon, and, while it has been urged that we should consider the possible effect of the defendant's insurance on it, we see no reason for expressing any opinion about that, but confine ourselves entirely to the question of the defendant's liability in this case.
It is not denied that the Pennsylvania policy was valid existing primary insurance when the defendant's insurance was applied for, or that it ever became anything else, unless the new insurance made it so. This existing policy was enough to keep the insurance in suit, by virtue of the defendant's excess insurance clause, from ever taking effect, except as coverage for that part of a loss which exceeded $7,500. Thomas v. Builders' Mut. Fire Ins. Co., 119 Mass. 121, 20 Am. Rep. 317, Sweeting et al. v. Mutual Fire Insurance Co., 83 Md. 63, 34 A. 826, 32 L.R.A. 570.
Since the loss proved was less than $7,500, no liability on the part of the defendant was shown.
Judgment affirmed.