Muller v. Globe & Rutgers Fire Ins. of New York

246 F. 759 | 2d Cir. | 1917

HOUGH, Circuit Judge

(after stating the facts as above). [1,2] It is to be noted that respondents do not complain of concealment in the sense of suggestio falsi, nor allege that there was suppressio veri, in the sense of maintaining silence as to any subject of investigation. The assertion is that Muller failed in the active duty, incumbent upon him as an applicant for insurance, of disclosing every fact material to the proposed contract, which as a matter of business and fair dealing ought to have been disclosed. Such is the legal obligation of the assured, though the materiality of any fact not disclosed is as much a question of fact, as is that of disclosure or nondisclosure. Blackburn v. Vigors, 12 A. C. (1887) 531; Maryland Ins. Co. v. Ruden, 6 Cranch, 338, 3 L. Ed. 242; McLanahan v. Universal Ins. Co., 1 Pet. 170, 7 L. Ed. 98; Royal Ins. Co. v. Martin, 192 U. S. 149, at 163, 24 Sup. Ct. 247, 48 L. Ed. 385.

We will assume (but not decide) that under the circumstances existing Muller’s nationality was a material fact. We nevertheless incline to the opinion that disclosure was actually made. Such seems the necessary implication from the brief memorandum filed by the trial judge, and such is the evidence of two witnesses. The sum of their story is that Muller was shipping a great deal of cotton, taking out much “war risk,” and other insurance and that the agent who accepted the “binder” application herein had been told repeatedly that Muller was an Austrian. This the agent denies, but we find the balance of evidence against him, largely from consideration of the binder itself. That document as prepared by libelant’s broker for presentation to the underwriter, stated in substance that Muller would not warrant his nationality as neutral. That any sensible man, looking at such an application from a Max Muller, could have believed him an American, when insurance with warranty was cheaper, is something of a tax on credulity. We'cannot accept appellee’s contention that the insertion in the binder of the phrase “No warranties” relieved Muller as a matter of law from the duty of disclosure: but we do hold, as triers of the facts, that the language quoted is potent evidence to sustain libel-ant’s claim that when the binder was accepted, the underwriter knew that Muller did not want insurance with warranties, because he could not honestly give them.

[3-6] The second contention herein raises ultimately the question of proximate cause, of which, after centuries of litigation, the "Squib Case still remains the best and classic example. That the Canadia and her cargo was seized, arrested, and; detained within the meaning of the policy we think too plain to require more than mention; the sole query is whether her loss proximately resulted therefrom.

Counsel have, we think, collated all the reported cases whose facts are suggestive;¹ but it should be remembered that, however desirable is the exercise of ordered thought and arrival at a logical result, proximate cause is a question for the jury, unless there is but one inference possible from the settled facts. Therefore decisions of judges are rarely precedents in the same way as are legal rulings. Donegan v. Baltimore, etc., R. R., 165 Fed. 869, 91 C. C. A. 555; Erie R. R. v. Russell, 183 Fed. 722, 106 C. C. A. 160. Of the cases noted below, the Ionides decision best serves as text or starting point. From that ruling it is argued that, if (as was there held) going ashore at a notoriously dangerous point (Hatteras), whose lighthouse had been extinguished as a war measure, was not a "consequence of hostilities,” but a sea peril, neither was a stranding on the unlighted Fair Isle proximately caused by any action of “kings, princes, and people,” arid more especially the British cruiser Hilary.

The contention is not unattractive, and we fully recognize it as a rule of law, supported by reason and the authorities quoted, that a mere increase of sea peril, by removal for belligerent purposes of all or any aids to navigation, does not per se afford ground for recovery under such “war risk” as this, in respect of a loss due to the absence of accustomed assistance. Such act, indeed, no more than restores the dangers of the seas to their normal.²

But the problem still remains whether the Canadia’s loss was proximately due to sea peril, and solution primarily depends on the meaning of "proximate,” as construed by judicial commentators. That cause is proximate which sets the other causes in motion; only when causes are independent is the nearest in time looked to. Insurance Co. v. Boon, 95 U. S. 117, 24 L. Ed. 395, a case whose facts are instructive and interesting. If there is an unbroken connection between act and injury, the act causes the injury;' an intervening act is not the proximate cause of injury, unless it is efficient to break the causal connection (Milwaukee, etc., R. R. v. Kellogg, 94 U. S. 469, 24 L. Ed. 256).³

These rules are guides to ascertaining whether, as matter of fact, the Hilary’s seizure of the Canadia caused the loss of the latter, and here both the facts and reasoning of British, etc., Co. v. The King, 33 Times R. R. 520, are illuminating. There a merchant vessel, chartered by the crown .as a transport and insured substantially against war risks, was compelled to navigate without lights in the Mediterranean, and while so doing was rammed and sunk by a French man of war. Rowlett, J., held in substance that the obligation, imposed by military necessity, of doing so dangerous a thing as to run at night without lights, made such obligation the proximate cause of collision.

We entertain a similar view in this cause. The Hilary did not say to the Canadia, “Go to Kirkwall, as you intended; the lights are out, and you must pick your own way,” but compelled her to pursue an imposed and dangerous route, and especially to go by night in charge of a naval officer whose local knowledge was perhaps deficient, and certainly not useful. Not only did a belligerent’s necessity create the peril of unlighted seas, but by “acts of kings, authorized in prosecution of hostilities,” the Canadia was forced to run risks that even in time of war she could and would have escaped under the uncontradicted evidence. Furthermore, the very purpose of compelling such navigation was to prevent aid and comfort reaching enemies of Great Britain; therefore the insured cotton was lost in the continuing process of detaining the ship that carried it, for purposes of search, and seizure, too, if the facts found had warranted it.

Thus we find no intervening cause, breaking the causal connection between the control assumed by the Hilary’s boarding party, and the loss of the ship. There was no time when the shipmaster was left to navigate his own ship in his own way; she was lost while he was doing what he had to do. A workman compelled to handle familiar tools with one eye blindfolded, and injured by his own blundering use of them, is in truth injured by the person who put compulsion upon him.

For these reasons, the decrees appealed from are affirmed, with costs.

1 Anderson v. Masten, A. C. (1908) 334; Livie v. Janson, 12 East, 648; Green v. Emslie, 1 Peake (N. P.) 278; Hagedorn v. Whitmore, 1 Starkie, 157; Ionides v. Universal, etc., Ass’n, 14 C. B. (N. S.) 259; Magoun v. New England, etc., Co., 1 Story, 157, Fed. Cas. No. 8961; Schieffelin v. New York, etc., Co., 9 Johns. (N. Y.) 21; Patrick v. Commercial Ins. Co., 11 Johns. (N. Y.) 14; Coolidge v. New York, etc., Co., 14 Johns. (N. Y.) 308.

2 Sed quaere, if a belligerent not only removed the civilized aids of peace, but set np false beacons or the like?

3 To the same effect are our own decisions in Boston, etc., R. R. v. Miller, 203 Fed. 968, 122 C. C. A. 270; The Anchoria, 83 Fed. 847, 27 C. C. A. 650; Long Island R. R. v. Killen, 67 Fed. 365, 14 C. C. A. 418; The Portia, 64 Fed. 811, 12 C. C. A. 427.