Henning v. United States Ins.

11 F. Cas. 1132 | U.S. Circuit Court for the District of Eastern Missouri | 1872

DILLON, Circuit Judge.

Upon consideration, we decide:

1.That the first count of the declaration sets forth a verbal contract by the defendant to insure this specific cotton; that.in the absence of any restraining provisions in the charter of the defendant, or in the laws of the state applicable to the defendant, a parol contract of insurance is valid; that the laws of the state respecting corporations, so far from prohibiting, allow parol contracts to be made, and recognize the validity of implied contracts by corporations (St. 1845, p. 232, § 8); that the charter of the defendant, construed in the light of the general law, does not disable it from making a binding contract of insurance without writing. The charter directs that “all the conditions of policies issued by the company shall be printed or written on the face thereof,” and that certain named officers “shall sign the policies or contracts made by order of the board of directors;” but these provisions, especially when viewed in connection with the general law of the state, cannot be held to prevent the company from making oral contracts of insurance, nor from being held liable upon implied contracts of insurance in accordance with the general and established principles of law.

2. If the decision of the supreme court of Missouri, when this cause was before it (47 Mo. 425), is to be considered as holding an opposite view, it is not conclusive upon this court, although entitled to great respect and consideration. The contract alleged is one relating to general commercial law, and in such cases the federal courts, when their power is judicially invoked, must determine for themselves, both as to the power to make the contract and its true construction. Butz v. Muscatine, 8 Wall. [75 U. S.] 584; Bank v. Skelley, 1 Black [66 U. S.) 436, 443; Gelpcke v. Dubuque, 1 Wall. [68 U. S.] 175, 205; Leffingwell v. Warren, 2 Black [67 U. S.] 599; King v. Wilson [Case No. 7,810].

In this view, as to the effect of the decision of the state court, KREKEL, J., concurs, but TREAT, J., differs, he holding that it is conclusive upon the federal court as to the power of the corporation to make the contract. The demurrer to the first count is therefore overruled.

3. The second count alleges the contract to insure this specific cotton to be in writing. And if (as the demurrer admits) the aver-ments thereof are true, the plaintiffs have a cause of action. We do not now determine whether the entries appearing on the books annexed to the open policy establish the truth of the averment that there was such a contract in writing as this count sets forth. The statements in this count as to the legal effect of the written policy of June 1, 1855, as to termini of shipments, are, in our opinion, erroneous, for the reasons stated in the ruling upon the third count of the declaration.

4. In substance, the third count is one upon the original policy of June 1, 1855, which, it is alleged, covered by its own terms an.; effect (“as understood, construed, and intended to be understood and construed,” by the parties), tbis shipment of cotton in 1864 by Butler & Co. to themselves, from the mouth of Red river to Cairo. The allegation is that the original policy, when properly construed as intended, extends to and covers by its own force, effect, and operation, “all shipments made by said Hening & Woodruff, or by any other parties, in which said Hening & Woodruff had an interest, at and from all ports and places, and to and from all ports and places, upon the Mississippi river, irrespective of the place of shipment or the point of destination.”

NOTE. Subsequently, at the September term, 1872, the cause was tried before Mr. Justice Miller, and Treat, J. and a jury, which rendered a verdict for the plaintiff for $178,280. To a proposition to reopen the questions of law decided on demurrer in the foregoing opinion of the circuit judge, Mr. Justice Miller is reported as saying, that such a course is not only against the settled practice of the court, — Appleton v. Smith [Case No. 498], — but if the propositions ruled heretofore were now open, he sees no reason to doubt, after what has been said by counsel, that they were ruled correctly.

To this construction of the policy of June 1, 1855, we cannot give our sanction. It cannot mean one thing in 1864 and another in 1855. Where the terms of a policy are not clear, we may resort to usage, and the course of dealing under it the better to enable us to ascertain what the parties meant by the use of such terms, but no further. By its terms we think it plain that St Louis was to be one of the termini of all risks which it was intended to embrace, and that it cannot be held of its own unaided force and effect to extend to a shipment of cotton in the name of other parties from a place on the Mississippi river to the port of Cairo, although Hening & Woodruff may have been interested in such shipment

In this view of the third count, the demurrer thereto is well taken, and must be sustained. Of course, it is not intended to deny that a written contract may be modified, and either enlarged or restricted by a subsequent valid parol agreement But if any such pa-rol agreement was subsequently made whereby a risk was insured which was not embraced in the original contract, the rights of the plaintiff arise under such subsequent parol contract and must be determined by it It is in this event a “new” contract, and it is a “parol” contract, although it may refer for part of its terms to another contract in writing of a similar character existing between the parties; but such reference does not make the new contract a written contract, nor does it alter the meaning, force, or operation of the written contract. Judgment accordingly.