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Purofied Down Products Corp. v. Travelers Fire Insurance Co.

decided.: May 4, 1960.

PUROFIED DOWN PRODUCTS CORP., PLAINTIFF-APPELLEE,
v.
TRAVELERS FIRE INSURANCE COMPANY, DEFENDANT-APPELLANT.



Author: Magruder

Before SWAN, MAGRUDER and LUMBARD, Circuit Judges.

MAGRUDER, Circuit Judge.

An insurance company takes this appeal from a judgment by the district court in favor of the insured, in the sum of $8,418.37, on a marine insurance policy. We have determined that we should affirm the judgment under review, with a slight modification, 172 F.Supp. 472.

The insured, Purofied Down Products Corporation, hereinafter called "Purofied," is engaged in the business of importing feathers and processing them for use in the manufacture of pillows, comforters and sleeping bags. In November, 1949, the Travelers Fire Insurance Company, hereinafter called "Travelers," issued to Purofied an open or floating marine insurance policy. This contract was "valued"; that is, the parties stipulated in advance the amount to be paid the insured in the event of total loss. Because the insured could not know at the time it took out the policy the exact value of the subsequent shipments to be covered thereunder, the parties agreed upon a basis of value, rather than upon a specific figure:

"7. Valued premium included, at amount of invoice including all charges therein, plus any prepaid and/or advanced and/or guaranteed freight not included in the invoice, plus 10%, foreign currency to be converted into dollars at bankers' sight rate of exchange applicable to each invoice and/or credit and/or draft."

The policy contained other provisions relevant to the issues in this case:

"19. This insurance shall not be vitiated by any unintentional error in description of vessel, voyage or interest, but any such error must be reported to this Company as soon as known to the Assured, and additional premium paid if required."

"26. (A) It is a condition of the liability of this Company that all risks hereunder be reported as soon as known to the Assured and amounts declared as soon as ascertained; and should the Assured fail to report risks covered hereby, then this policy as to all subsequent risks, shall become null and void if this Company shall so elect;

(B) The Company is entitled to premiums, at rates of this Company, on all risks covered herein whether reported or not;

(C) This Company shall have the privilege, at any time during business hours, to inspect the records of the Assured as respects shipments coming within the terms of this Policy."

"27.It is a condition of this Policy, and it is hereby agreed, that the Assured's brokers, Buhler Service Corp. * * * shall be deemed to be exclusively the agents of the Assured and not of this Company in any and all matters relating to * * * this insurance. Any notice given or mailed by or on behalf of this Company to the said brokers * * * shall be deemed to have been delivered to the Assured."

Also, by endorsement in 1952, a term was added to the contract in the nature of a limitation, as follows:

"No suit or action for recovery of any claim arising under this Policy shall be sustainable in any court unless such suit or action shall have been commenced within 12 months next after notice ...


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