125 Misc. 395 | N.Y. App. Term. | 1925
Under what is known as the Inchmaree clause in an insurance policy taken out on the steamboat Rensselaer plaintiff has recovered the cost of replacing the starboard paddle shaft of that steamer upon the following facts:
Plaintiff is the receiver of the Hudson Navigation Company which since 1909 owned and operated the steamer Rensselaer on the Hudson river between New York and Albany. On or about March 4, 1924, the starboard shaft, after about fifteen years of service, was found to be fractured. Although there was testimony given as to the collision of the steamer with another vessel in June, 1923, the chief engineer of the steamer testified that she sustained no damage during the year 1923 that would have caused the breakage of the shaft; and the trial judge found that the fracture developed after December 1, 1923, on which date the policy sued on was taken out* in the defendant company, from a latent defect in the casting of the shaft, and that the loss incurred by the necessary replacement of the shaft was a loss due to a latent defect within the meaning of the clause in the policy providing that “ This insurance also specially to cover (subject to the free of average warranty) loss of, or damage to hull or machinery, through the negligence of Master, Charterers, Mariners, Engineers, or Pilots, or through explosions, bursting of boilers, breakage of shafts, or through any latent defect in the machinery or hull, provided such loss or damage has not resulted from want of due diligence by the Owners of the Ship, or any of them,” etc. Judgment was accordingly given in favor of the plaintiff for the cost of replacing the shaft.
The House of Lords decided the Inchmaree case in 1887, and the first reported decision construing the Inchmaree clause seems to have been that in Cleveland & B. Transit Co. v. Insurance Company of North America, decided by Judge Adams in the District Court for the Southern District of New York (115 Fed. 431). In that case the vessel was a new vessel constructed by a builder of the best reputation. At the end of one of her first voyages the engine bed plate was found to be cracked, and it subsequently became necessary to replace it. The injury was due to a latent defect in the casting not discoverable until it was broken up, which the evidence tended to show was brought to the surface, fracturing the plate, by an unusual shock to the engine caused by a small quantity of water getting into the cylinders.
In deciding in favor of the plaintiff the court said (p. 436): “ It would seem that under the English rule, recovery would be allowed in a case of this kind, and when the origin of the [Inchmaree] clause is considered and its adoption in this country, without alteration in any particular, that a similar liability would follow, unless there is something in the policy of our law which would create a difference. * * * The fact of water getting into the cylinder was but a slight accident and indicates that the loss was practically due to the inherent weakness caused by the cold shut. Nevertheless, as I find that the policy attached, it seems clear that the loss is directly within its terms, providing that the insurance should cover loss or damage to the hull or machinery through any latent defect.”
The rule laid down by the English cases construing the Inchmaree clause, and which were not decided until after the decision of Judge Adams in the Cleveland case, is not in accord with the view expressed by the American judge.
In Oceanic Steamship Co. v. Faber (11 Com. Cas. 179) it appeared that in 1891 a new end was welded onto the tail shaft of the steam
The above views of Walton, J., were expressly approved by the King’s Bench Division in Hutchins Bros. v. Royal Exchange Assurance Corporation (L. R. [1911] 2 K. B. Div. 398, 408). In a concurring opinion in the latter case Fletcher Moulton, L. J., said (pp. 410, 411): “It is suggested that this was a ‘ loss of or damage to hull through a latent defect in the hull ’ within the meaning of the Inchmaree clause. It was in my opinion nothing of the kind. It was not loss or damage caused by a latent defect, but a latent defect itself. To hold that the clause covers it would be to make the underwriters not insurers, but guarantors, and to turn the clause into a warranty that the hull and machinery are free from latent defects, and, consequently, to make all such defects repairable at the expense of the underwriters. There are no words in the clause which warrant such an interpretation. The fact that it begins with the word ‘ insurance ’ negatives, in my opinion, the possibility of its being so interpreted.”
An illustration of the kind of loss which is recoverable under the Inchmaree clause is referred to in Arnould on Marine Insurance and Average (Vol. 2 [11th ed.], § 861-a) as afforded by the facts of the case of Wills & Sons v. World Marine Insurance, Ltd., reported in the Times March 14, 1911. There the insurance was on a dredger; a link of the hoisting chain of the bucket ladder gave way, the ladder and buckets fell, doing damage to the hull and machinery. There was a latent defect, in the welding of the link which would otherwise have been strong enough. Scrutton, J., held that inasmuch as the link broke not from wear and tear but through the latent defect, the underwriters were- liable under the clause for the damage to the hull and the machinery and for certain other consequential damage, although the latent defect had in fact existed long before the commencement of the policy.
Assuming that upon the actual facts in the Cleveland case, decided by Judge Adams, there is a conflict between that decision, wherein the court purports to follow the English rule, and the decisions of the English courts construing the Inchmaree clause, we are called upon to determine which rule we shall follow. In The Eliza Lines (199 U. S. 119, 128) Mr. Justice Holmes says: “ Of course it is desirable, if there is no injustice, that the maritime law of this country and of England should agree; ” and again in Queen Insurance Co. v. Globe & Rutgers Fire Insurance Co. (263 U. S. 487, 493): “ There
As it is desirable that in a case of this kind the decisions should harmonize, and as we deem the construction of the Inchmaree clause by the English courts the more persuasive, we conclude that the plaintiff’s loss in this case was not covered by the policy and that it was error to award him judgment.
Judgment reversed, with thirty dollars costs, and complaint dismissed on the merits, with costs.
All concur; present, Bijur, McGoldrick and Levy, JJ.