Marine Insurance v. Walsh-Upstill Coal Co. (68 Ohio St. 469, 1903)

Crew, J.

Whether the judgment of the circuit court was erroneous, is in this case to be determined from, and is dependent upon the interpretation and effect proper to be given to the contract of insurance on which this suit Avas brought.

If, as contended by the defendant in error, the contract in suit is, because of the language therein employed, equally comprehensive with, and in legal effect the equivalent of an open cargo policy containing the phrase, “for themselves or whom it may concern,” whereby the Walsh-Upstill Co. Avas authorized to cover and insure either cargoes OAvned by it or cargoes shipped and insured by it as agent for the consignee but in which it had neither ownership nor interest, then the judgment of the circuit court was right. But if on the other hand the terms and provisions of said policy when rightly construed and interpreted arc such as to limit its application to cargoes of coal belonging to the Walsh-Upstill Co., or to cargoes shipped -by said company in which it had and held some pecuniary interest as owner or agent, then and in that event, the judgment of the circuit court was erroneous. The single question presented here for determination is, was this cargo of coal shipped by the WalshUpstill Co. to the R. P. Elmore Co. of Milwaukee, Wisconsin, covered by the policy of insurance on which this suit is brought? The answer must be found in the proper interpretation of the contract or policy itself.

It is conceded in this case that the Walsh-Upstill Coal Co., at the time it applied for insurance on this cargo of coal, Avas neither the owner of said cargo, nor had it any interest in the same as agent or otherwise. But it is claimed by defendant in error that although it had no ownership in the coal at the time of procuring the insurance, that it was the agent of the Elmore Co. in securing the insurance and shipping the coal and that by the terms of its contract under which the policy was issued, such policy cov.ered as well coal shipped by it as agent as that shipped by it as owner and that the words of the contract “covering all shipments of the following description of articles, viz.: sundry coal cargoes belonging to them and as agents, at risk,” etc., is in effect a contract and agreement to insure such cargoes of coal as should be shipped by it as owner, and also such as should be shipped by it as agent, although when shipped as agent it might be without interest in the cargo shipped. If this provision in said contract is the equivalent of, and carries with it the same legal interpretation as the phrase “for themselves or whom it may concern,” then under this policy the Walsh-Upstill Co. was, as claimed by defendant in error, authorized to cover not only such cargoes as were owned by it, but all cargoes shipped and insured by it as agent, by whomsoever owned. Such, we think, was not the intention of the parties to this contract, nor is such the effect and meaning proper to be given to the terms and provisions of the contract itself when rightly construed and interpreted. That it was not the purpose of the WalshUpstill Co. to procure a general authority to solicit and take risks or to cover by insurance all cargoes of coal that might be shipped by it whether interested therein or not, would seem to be evidenced by the language of its application to said insurance company for insurance. This application, the so-called “contract proposition,” recites that: “Insurance is wanted by the Walsh-Upstill Coal Co. covering all shipments of the following description of articles, viz.: Sundry coal cargoes belonging to them and as agents at risk,” etc. And the policy issued on this application by the Insurance Co. contained the recital that it was issued “on account of the Walsh-Upstill Coal Co. as per contract dated April 1, 1897,” etc. By this application insurance was requested by the Walsh-Upstill Co. only upon “cargoes belonging to them and as agents at risk,” and the policy issued covered only such cargoes. Insurance was not asked by the Walsh-Upstill Co., “for whom it might concern,” nor was it asked for or on behalf of the R. P. Elmore Co., who were the owners of this cargo and who alone were at risk in case of loss, but it was asked and obtained for and on account of the WalshUpstill Co., on cargoes belonging to them and as agents at risk. The parties to this contract of insurance are chargeable with knowledge of the law governing this character of insurance and it is, we think, under the facts of this case, fair to assume they were not without knowledge that in marine insurance it is a matter of common usage to issue policies “for whom it may concern” upon application made for that purpose. If it had been the ' purpose of the Walsh-Upstill Co. to obtain such a policy or to procure authority to act as agent for the Marine Insurance Co. in soliciting and taking risks, and if it had been the purpose of the Insurance Co. to constitute said Walsh-Upstill Co. its agent for that purpose, we may reasonably assume that the application and policy would have taken some such form. But the Walsh-Upstill Co. did not apply for such a policy nor did the Insurance Co. issue such an one, unless the words “belonging to them and as agents” in this policy, carry the same legal interpretation as the phrase “for whom it may concern.” The contract of marine insurance in its essential nature and in all its incidents is purely a contract of indemnity, hence ordinarily an insurable interest of appreciable value on the part of the assured in the subject of insurance is of the very essence of the right to recover upon such contract; if there is no interest there can be no loss, and if there is no risk of loss on the part of the assured there can be no valid contract of indemnity. This policy of insurance is not subject to the same construction and interpretation that might be given it, if the provision in question were made to read “for whom it may concern,” or if the policy were made to run to “A. B., as agent,” or “to C. & L. for the owners;” as was the form of policy in some of the cases cited by counsel for defendant in error, for in such case the policy itself would, on its face, clearly indicate and show that the person intended to be insured thereby, was a person other than the person making the application and to whom and in whose name the policy issued. But the contract we are considering, was not of that character, but was by its terms a personal contract between the Walsh-Upstill Co. and the Insurance Co. whereby the Walsh-Upstill Co. sought and obtained insurance for itself and on its own account, and not generally “for whom it may concern.” That the words “at risk” in this contract are there for some purpose and have some meaning must be presumed, and in the construction of said contract these words may not be omitted or disregarded nor may other words which change or enlarge the meaning of said contract, or change the intendment of the parties thereto, be substituted in their stead. Looking to their place and position in this contract, and taken in connection with the other .language and provisions thereof, we think these words “at risk” must be held to qualify, and were so intended, the words which immediately precede them and in connection with which they are used, viz.: the words “and as agents,” and so construed they are a limitation on the authority of the Walsh-Upstill Co., and restrict the application of this policy of insurance to such cargoes as belong to said Walsh-Upstill Co. as owner, or such as it has some interest and risk in as agent. The Walsh-Upstill Co. was a coal company doing business in Cleveland, Ohio, and engaged in the business of selling and shipping coal. The coal sold by it was sometimes delivered “free on board” vessels at Cleveland or other port of shipment and sometimes delivery was to be made at the port of destination, so that it might very well be in certain cases that the Walsh-Upstill Co., as consignor might have an insurable interest in a cargo of coal, the title to which had by delivery to the carrier, passed to the consignee. And to the extent of such interest it might have insurance under this contract and policy.

The case of Insurance Co. v. Wilson, 6 Ohio St., 553, cited and relied upon by defendant in error, is clearly distinguishable from this case. In that case Wilson & Co. were insurance brokers and were acting for the Protection Insurance Co. The syllabus in that case is as follows: “Insurance brokers, holding an open policy of insurance for themselves and whom it may concern, may, in case of damage to property covered by their policy, maintain, in their names, an action for the use of the owners, although the latter are not named in the policy, if it sufficiently appear that the insurance was procured for their benefit.”

Bowen, J., announcing the opinion in that case, speaking of the authority of Wilson & Co., and the •character of their policy, said: “They had been •agents intrusted with the business of taking risks upon property against the perils of transportation, of fire and of thieves. For the purpose of executing this agency they received from the insurance company an open policy “to themselves or whom it might concern,” etc. So that in this case the policy itself was one “for whom it might concern” and clearly showed that Wilson & Co., in whose name it issued, were not required to have any beneficial interest in property that might be covered by it. While the policy issued to the Walsh-Upstill Co. covered only property belonging to it, or in which as agent it had some risk. We are of opinion that under the admitted facts of this case, the cargo of coal lost was not covered by the policy of insurance on which this suit was brought, and therefore that no recovery can be had on said policy, because of the loss of said cargo.

Judgment of the circuit court reversed and judgment for plaintiff in error.

Spear, Shauck and Price, JJ., concur.

Davis, J.

I concur in the syllabus and in the judgment; but I do not concur in all of the reasoning by which the conclusion is reached in the opinion. The question to be determined in this lawsuit is who is insured, not what is insured. The words “at risk” define the property to be insured and not the person, and they are customarily used for that purpose. I regard it as both bad law and bad grammar to construe this phrase as qualifying the term “agents” instead of “cargoes.” I therefore, for the purposes of this controversy, construe only so much of the application, or, as it is here called, the contract proposition, as precedes and includes the word “agents.” It recites that insurance is wanted for the Walsh-Upstill Co. Expressio unius est exclusio alterius. Therefore insurance was not asked for nor issued for anybody else. It was requested and issued upon cargoes “at risk, etc.,” belonging to the Walsh-Upstill Co. as principal “or as agents;” but when it is a conceded fact that the particular cargo in question did not belong to the Walsh-Upstill Co. as agents or otherwise, it seeras to me to be a very violent construction of the contract which would permit them to insure the cargo which did not belong to them for the use and benefit of strangers to the contract to whom it did belong. And it would in my opinion be a still more violent strain upon the law to allow such owners to recover as beneficiaries in the name of the Walsh-Upstill Co. Such procedure would be essentially a fraud upon the Insurance Co. and is not justified by any fair interpretation of the language of the contract proposition.

Bijrket, C. J., concurs in the above.