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Utica Canning Co. v. Home Ins. Co.

Supreme Court of New York, Appellate Division

May 5, 1909

UTICA CANNING CO.
v.
HOME INS. CO.

Appeal from Trial Term, Oneida County.

Action by the Utica Canning Company against the Home Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Spring, J., dissenting.

A fire policy issued by defendant covered merchandise, the property of the assured, or held by them in trust or on commission, contained in their warehouse. Plaintiff sold goods to assured, but the sale was rescinded, on condition that no claim should be made against plaintiff for breach of contract, and also on condition that assured would store the goods for such reasonable time as would enable plaintiff to resell them; the only charge to be made by assured being for cartage and freight in case of resale. Held, that assured were bailees for hire as to plaintiff's goods, and that the same were covered by the policy.

[116 N.Y.S. 935] Jones, Townsend & Rudd, for appellant.

Merwin & Merwin, for respondent.

Argued before McLENNAN, P. J., and SPRING, WILLIAMS, KRUSE, and ROBSON, JJ.

MCLENNAN, P. J.

The material facts are not in dispute, and are stated in the opinion.

In August, 1907, Lewis De Groff & Son, wholesale grocers, jobbers, and warehousemen, doing business in the city of New York, entered into contracts with the plaintiff for the purchase of all the No. 1 and No. 2 refugee beans which the plaintiff had packed or would pack up to and including August 16 and 17, 1907, the date when shipment was agreed to be made, and De Groff & Son agreed to pay therefor $1.75 a dozen for the No. 1's and $1.40 a dozen for the No. 2's, f. o. b. New York. The Sauquoit Canning Company, made a party defendant upon the trial (it being agreed that the complaint and answer should be amended accordingly), was engaged in the same business and was under the same management as the plaintiff, and the contract of purchase made by De Groff & Sort was understood to include the beans owned by the Sauquoit Company, as well as those owned by the plaintiff, although the title to the same was separate and distinct. The sale was not made by sample, but was a sale of a well-known trade article by a trade-name. Pursuant to the agreement of purchase so made between De Groff & Son and the plaintiff, beans belonging to the plaintiff of the value of $816.20, and beans belonging to the Sauquoit Company of the value of $621.80, were shipped to De Groff & Son under such contract of purchase, where they arrived prior to August 22d, and were by De Groff & Son received and placed in their warehouse in the city of New York. The beans thus shipped were stored as one lot, practically as if purchased from a single seller, both lots being alike and not distinguishable from each other. A few days after the beans had been received by De Groff & Son and placed in their warehouse, they made complaint to the plaintiff that the beans were not of such quality as they supposed they were buying, and, in substance, that they did not fulfill as to quality the requirements of the contract of purchase, and De Groff & Son indicated their desire or purpose of repudiating or canceling such purchase by them. Thereupon such negotiations were had between De Groff & Son and the plaintiff that it was consented by the plaintiff that the contract of purchase might be rescinded, upon condition, however, that no claim should be made by De Groff & Son against the plaintiff as for breach of contract, and also upon condition that [116 N.Y.S. 936] De Groff & Son would continue to store the beans in their storehouse, without cost to the plaintiff, for such reasonable time as would enable plaintiff to resell the same. The only charge to be made by De Groff & Son in case of such resale and upon receiving orders of shipment from the plaintiff was the cartage and freight charges. Under such stipulation and agreement the matter of dispute between De Groff & Son and the plaintiff was settled, and the beans were permitted to remain in the warehouse of De Groff & Son under and pursuant to such agreement. Thereafter, and on the 23d day of September, and, while the beans in question were thus being stored in the warehouse of De Groff & Son, a fire occurred in such warehouse which resulted in injury to the beans owned by the plaintiff in the sum of $737.43 and to the beans owned by the Sauquoit Company in the sum of $542.82, and the question presented by this appeal is whether or not the plaintiff is entitled to recover the loss sustained by it because of such fire.

At the time of the fire Lewis De Groff & Son were insured against loss by fire in the amount of $140,000 by policies issued by 16 different insurance companies; defendant being one of them. The defendant had issued to De Groff & Son two policies of $5,000 each. All of the policies so issued and in force at the time of the fire were the standard New York policies and were exactly alike, except as to the names of insurers and amounts, and each had a typewritten slip pasted thereon and which was made a part thereof, indicating the risks which the policy covered, which was as follows:

" On merchandise hazardous, not hazardous and extrahazardous, including boxes, labels and other supplies, the property of the assured, or held by them in trust or on commission, or sold but not removed, contained in the brick building situate No. 75 Beach street, and Nos. 386-388 Washington street, borough of Manhattan, city of New York."

The whole loss on the contents of the warehouse owned by De Groff & Son was $88,325.11, and settlement was made upon that basis with all of said insurance companies, each paying its proportionate share. Such settlement was made by the defendant with actual knowledge on the part of each of said insurance companies of plaintiff's claim. The plaintiff and the Sauquoit Company served proofs of loss in proper time and on the 18th day of November, 1907, upon the defendant and upon each of the other insurance companies, and the loss sustained by De Groff & Son was not settled, and payment was not made therefor until December 30, 1907. Upon the payment to De Groff & Son of the amount of their loss by the defendant and by all the other companies they consented to the cancellation of the policies issued by them and gave their receipt, which was indorsed upon each of such policies, and were exactly alike, except as to name and amount, as follows:

" $3,154.47. New York, December 30, 1907.
" Received of Home Insurance Company of New York three thousand one hundred fifty-four and 47/100 dollars in full for loss and damage by fire of 23rd September, 1907, to property covered by this policy, and policy is ...

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