Globe & Rutgers Fire Ins. Co. v. Winter Garden Co., 9 F.2d 227 (2d Cir. 1925)

*228 *229 Davies, Auerbach & Cornell, of New York City (Martin A. Schenck and Murray C. Bernays, both of New York City, of counsel), for plaintiff in error.

Max D. Steuer, of New York City (William Klein and Samuel Gottlieb, both of New York City, of counsel), for defendant in error.

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

HOUGH, Circuit Judge (after stating the facts as above).

Insurance Company's position at this bar is, virtually, that it was a violation of the above-quoted policy clauses for Garden Company to transport the insured property without obtaining from the acting carrier an assumption of liability such as is imposed on common carriers by tradition or statute, or at least what remains thereof over the lawful exceptions in such carriers' "ordinary" bill of lading. We cannot agree to this, and notwithstanding able argument for plaintiff in error, believe that Garden Company's right of recovery rests on simple propositions of law, after a plain reading of the policy language.

It is urged with truth by defendant in error that, if there be any ambiguity in this contract, it is to be resolved contra proferentem, and that any policy of insurance should, if possible, be so construed as to grant indemnity to the assured. But it is not necessary to dwell upon these canons of construction.

There is, however, another principle of insurance law that simplifies decision. It has never been better stated than by Lord Mansfield, in Noble v. Kennoway, 2 Doug. 510, viz. that "every underwriter is presumed to be acquainted with the practice of the trade he assures." Many citations amplifying and illustrating this proposition may be found in 14 R. C. L. p. 936, and 26 C. J. p. 78. We have heretofore recognized it in Globe, etc., Co. v. Moffat, 154 F. 13, 83 C. C. A. 91.

Thus it may be assumed that, when this insurer issued the policy in suit, it did so with a presumed knowledge on its part, that Garden Company intended to do, in respect of transporting its property, exactly what it did do and long had done; also that every other theatrical troupe proprietor of any importance in North America had done and would do the same thing. If the policy be read in the light of the proven usage, it is noticeable that "goods in transit" are covered. Disjunctively, goods "in the custody of any railroad" are covered a phrase evidently intended to provide for periods of waiting for lading after delivery to a carrier, and for removal from terminal after unlading. But the transit during which the goods are covered is generally stated.

It is next observable that no obligation rests on the insured to ship in any particular manner; the goods might move by rail or by truck; indeed, we see nothing to exclude any form of transit on land. Further there is no obligation to ship under bills of lading. It is plain that, if the persons constituting Garden Company's troupe had taken their the-atrical properties in their hands or on their backs into the cars which transported the men and women of the troupe, the policy would have attached.

Doubtless, when a carrier assumes the care and custody of baggage, it prima facie assumes the liability of a common carrier in respect thereof. Hutch. Carriers, (3d Ed.) § 1241. But it is equally clear that, if passengers retain in their own custody their own baggage, to the exclusion of the carrier's control, the latter is liable only for losses occasioned by his own negligence. Id. § 1264.

In our opinion this case presents the last legal situation. Garden Company bought so many passage tickets that the railroad furnished it three cars, upon which it loaded its own baggage and "props," and expected on arrival at destination to do its own unloading as well. The railroad had nothing to do with transport, except to haul the cars. In legal effect those entitled to travel on Garden Company's passage tickets took their baggage with them, in what for the time being were their own cars; they never handed over the insured property to the care or custody of the Railroad Company. Consequently the Railroad Company was liable for negligence alone; yet plainly this method of transportation was within the letter of the agreement made; that it was within the spirit thereof is shown by the custom now sufficiently alluded to.

Nor was there any obligation upon an insured that chose to carry his own baggage in his own car, just as if he were carrying it in his own hand, to pay for negligence liability on the part of the Railroad Company above and beyond the figures or values normally fixed by the tariff. There was no such obligation, because it is not specifically created by the policy, and what was done was in the trade insured usual and regular.

*230 In sum, the policy nowhere requires the insured always to make some carrier responsible for the insured value so that the insurer may (theoretically) always have a second string to his bow. The insured need only abstain from making "special agreements" that release carriers from their normal liability; but there is no obligation to choose that style of transport, which secures more than normal liability; having regard to the custom of the insured trade.

Much is made by plaintiff in error of cases such as Chicago, etc., Co. v. Wallace, 66 F. 506, 14 C. C. A. 257, 30 L. R. A. 161, which call contracts for transporting circuses and shows "special contracts." In one sense such agreements are special i. e., not usual because, as compared with the general run of transportation contracts, one for moving a troupe of any kind is rather rare or special. But in no sense was this an extraordinary, unusual or strange method of moving such a troupe as this with its property. It was indeed usual, common and almost universal long before this policy was written.

We conclude that plaintiff's method of transporting the insured goods from Toronto to Montreal was legally identical with going on board the train carrying the insured goods in its hand; it was the usual thing to do, and it was thoroughly customary. Therefore it was a lawful thing to do.

There remains the method of assessing damages. Most of the insured property had been specially made for this play or a similar production. Such goods can hardly be said to have a market value. Under the circumstances shown, we agree with the court below that the proper method of ascertaining damage was to discover the reasonable original cost less depreciation. The theory of proof was correct.

As both parties moved for verdicts, both affirmed that there was in the record no disputed question of fact that could control the question of law presented. Fleischman Co. v. Irwin (C. C. A.) 5 F.(2d) 167. But the trial judge was unwilling, or unable, to go into the minutiae of proof along the lines indicated, so he designated an auditor and continued the trial.

After this reasonable exercise of discretion, it was not competent for the parties to agree upon a figure, subject to whatever error might be discovered in arriving thereat. This would be an easy method of manufacturing error; for we are substantially asked to examine the evidence tentatively taken, but sent to an auditor, in order to ascertain whether technical error was committed in tentatively admitting that upon which the trial judge refused to pass. We think such practice impossible, and hold that plaintiff in error, after having moved for a verdict and then refused to go before the auditor, is not in a position to complain of the evidence tentatively taken.

Judgment affirmed, with costs.

[*] Certiorari denied 46 S. Ct. 352, 70 L. Ed. ___.