Case Name: AUGUST SCHROEDER et al. v. SCHWEIZER LLOYD TRANSPORT VERSICHERUNGS GESELLSCHAFT
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1882-05-26
Citations: 60 Cal. 467
Docket Number: No. 6,844
Parties: AUGUST SCHROEDER et al. v. SCHWEIZER LLOYD TRANSPORT VERSICHERUNGS GESELLSCHAFT.
Judges: 
Reporter: California Reports
Volume: 60
Pages: 467–481

Head Matter:
[No. 6,844.
In Bank.]
May 26, 1882.
AUGUST SCHROEDER et al. v. SCHWEIZER LLOYD TRANSPORT VERSICHERUNGS GESELLSCHAFT.
Marine Insurance—Change of Ship—Transshipment of Cargo.—It is an implied condition of a policy of marine insurance that the ship named in it shall not, after the commencement of the risk, be changed without necessity or the consent of the underwriters; for such unnecessary or nnsanctioned change of the ship would produce an alteration of the risk run by the underwriters, and therefore exempt them from their liability.
Id.—Id.—Id.—Connections.—Plaintiff’s wheat was insured by the defendant on the steamer Colorado and connections. The customs and usage of the steamship company, with reference to cargoes to Hong Kong and Batavia, was for the ship taking the cargo at San Francisco to carry the same to Hong Kong without transshipment; but in this case the cargo was transshipped in Yokahama (without necessity,) to other ships of the Company, and by them carried to Hong Kong where it was lost.
Held: The “connections” referred to in the policy were the regular connections of the company only, and the term was not intended to include a casual, unusual and unanticipated connection with a ship substituted for the occasion upon a state of things temporary in its nature, and unknown at the time that the contract was made. The loss at Hongkong occurred subsequent to the change of ship, and under the terms of the policy the defendant was not responsible.
Appeal—Reversal of Judgment—Hew Trial—Practice.—Extreme caution ought to be exercised in refusing new trials where judgments are reversed. The discretion of the appellate Court should be exercised in that direction only in cases where it is plain, either from the pleadings or from the nature of the controversy, that the party against whom the reversal is pronounced cannot prevail in the suit.
Held, accordingly in this case (Thornton, J., dissenting), that the cause should be remanded for a new trial.
Appeal from a judgment for the plaintiffs and from an order denying a new trial.
Milton Andros and Charles Page, for Appellant.
The general rule is, that the right to tranship cargo from the original vessel does not exist, except in case of some accident to that vessel which renders her innavigable, or with the consent of the shipper, or, in case it is insured, with that of the underwriter. (1 Arnold on Ins. 331; Lees’ Laws of Shipp, and Ins. 412.) The rule as above stated is recognized not only in the earliest laws of the sea, but has continued to be down to the present time. (Emerigon on Ins. 339; Ordonnance de la Marine, Liv. III, Tit. 6, § 27; Marshall on Ins., Book 1, Chap. 7, § 3; Chap. 11, § 2; 2 Parsons on Ins. 2; Park on Ins. 611; 1 Phillips on Ins. § 983; Hildyard on Ins. 139; Pierce v. Columbian Ins. Co. 14 Allen, 320; Bold v. Bother am, 8 Ad. & El. N. S. 797; Paddock v. Commercial Insurance Co., 2 Allen, 93-100; Troth et al v. Wood, 1 Gallison, 442.)
It is from the use of the word "connections” only, that such consent if given, is to be implied. This word, when construed in connection with the usage stated in the tenth finding, as it must be, raises no implication of such consent, but, on the contrary, negatives the proposition that the underwriter consented to or contemplated a transshipment at Yokohama.
The word “connections” is general and indeterminate, and its meaning may be explained by the known usage of the Pacific Mail Steamship Company, with reference to the usual and customary course pursued by its line of steamers plying between San Francisco and Hong Kong, and carrying cargo destined to that port or Batavia. (1 Duer on Ins., 195, § 42; Coit v. Commercial Ins. Co., 7 Johns. 385; S. C., 7 Am. Dec. 282; Houghton v. Gilbart, 7 C. & P. 701; 1 Phil, on Ins., § 137 et seq.; Astor et al. v. Union Ins. Co., 7 Cow. 202; Dow v. Whetten, 8 Wend. 160; 1 Park on Ins. 89; 2 Phil, on Ev. (Cow. & Hill’s Notes), 724; Brough v. Whitmore, 4 Term R. 210; Pelly v. Royal Exchange Ins. Co., 1 Burrow, 345; 1 Duer on Ins., 276, §§ 69, 70; id. 195, 196, §§ 42, 49, 44 et seq.; Crosby v. Fitch, 12 Conn. 422; 3 Addison on Cont., § 1158; 2 Parsons on Cont., 356, 535; 2 Phillips on Ev. 787, 788; Preston v. Greenwood, 4 Doug. 28, 32; 1 Park on Ins., 48,49; Clark v. United F. and M. Ins. Co., 7 Mass. 365, 369; S. C., 5 Am. Dec. 50; Loring v. Heptune Ins. Co., 20 Pick. 411,414; 1 Duer on Ins. 179, § 31; 184, § 34; Consequa v. Willings, 1 Pet. C. C. 225, 229,230; Abbott’s Trial Evidence, 485; 2 Duer on Ins., 668,669, § 17: 6; Lowry v. Russell, 8 Pick. 360, 362; Van Santvoord v. St. John, 6 Hill, 157; F. and M. Bank v. Champ. Trans. Co., 18 Vt. 131, 140; Barksdale v. Brown et al., 1 Nott & McC. 517, 519; S. C., 9 Am. Dec. 720; Vallance v. Dewar, 1 Campb. 505, 506; Civil Code of Cal., §§ 1566,1646, 1649; Wadsworth v. Pac. Ins. Co. 4 Wend. 34.)
Sidney V. Smith & Son, for Respondents.
A policy of marine insurance protects the insured property from loss by a peril insured against during the whole transit, on the land as well as upon the sea. (Pelly v. Royal Exchange Assurance Co., 1 Burr, 341; Boehm v. Combe, 2 M. & S. 172 ; Brough v. Whitmore, 4 T. R. 206; Coggeshall v. Ins. Co., 3 Wend. 283; Devaux v. J‘Anson, 5 Bingh. N. C. 519; Fletcher v. Ins. Co., 18 Mo. 193; Dunlap v. Allen, 9 Faculty Decisions, 371; Underwriters’ Agency v. Sutherlin, 55 Geo. 266.)
The transshipment at Yokohama was provided for by the broad language of the policy, the words “connections” in its natural import including all transshipments, wherever made. (G. O. P. § 1861.) The principles of law in regard to deviation and change of risk have no application to this case. The language of the policy includes all connections of the Colorado, even one which might be a departure from the usage of the steamship company. Proof of that usage could, therefore, affect the express stipulations of the contract. (1 Arn. Ins., §§ 44, 45; 1 Phil. Ins. § 980; O. 0. P. § 1870, par. 12; The Schooner Reeside, 2 Sumn. 567; Blackett v. Assurance Co., 2 Cr. & J. 244.) There is nothing in the case to show that the usage of the steamship company was known to the community or understood by the plaintiffs; but proof of this sort is necessary to establish a usage which shall be taken to have been a part of the contract. (1 Arn. Ins., § 43; 1 Phil. Ins., § 135; 2 Pars. Mar. Law, 57.) The understanding of the insurer as to the point where the first transshipment would be usually or probably made can not qualify the terms of the policy. {New York Fire Ins. Co. v. Roberts, 4 Duer. 141; Armett v. Innes, 4 J. B. Moore, 150; Hunter v. Leathley, 10 B. & 0.858.)
The language of the policy, being unambiguous, can not be controlled by proof aliunde of its meaning. The explicit word “connections” is not open to explanation. (1 Arn. Ins., § 137, p. 361.) All doubt as to. the meaning of the words “perils of the sea” or “connections,” and as to the construction of the limitation of the insurer’s liability to total loss only, is to be resolved in favor of the insured and against the insurer. (1 Duer on Ins., 161; Wilkins v. Ins. Co., 30 Ohio St. 317; Palmer v. Ins. Co., 1 Sto. 360; Hoffman v. Ins. Co., 32 N. Y. 413; Ins. Co.’s v. Wright, 1 Wall. 468; 0. 0. § 1654.)
Sidney V. Smith & Son, for Respondents. (Rehearing in Bank.)
Department No. 2 ordered judgment to be entered in favor of defendant.
We think that under the circumstances of the case more complete justice would be done by granting a new trial, and the propriety of granting a new trial is the only point which we desire to present by this petition.
That the granting of a new trial upon the reversal of a judgment is within the discretion of this Court, follows from the language of Section 53 of the Code of Civil Procedure. (Argenti v. San Francisco, 30 Cal. 463; Ryan v. Tomlinson, 39 id. 464).
In New York, under a statute similar to our own above cited, it has been held that the granting of a new trial upon reversal was discretionary with the appellate Court, and that to order the new trial was a better exercise of discretion than to order judgment to be entered against the winning party in the Court below. {Griffin v. Marquardt, 17 N. Y. 28; Corning v. Troy Iron and Nail Factory, 34 Barb. 485 ; Burlchardt v. McClellan, 1 Abb. App. Dec. 266; Foot v. Aetna Life, Ins Co., 61 N. Y. 577; Enriehs v. DeMill, 75 id. 374; Edmonston v. McLoud, 16 id. 543; Guernsey v. Miller, 80 id. 183.)

Opinion:
Ross, J.:
The opinion delivered by Department Two in this case is here approved and adopted, but we think that instead of directing judgment to be entered for the defendant on the findings, the cause should be remanded for a new trial.
The power so to do is expressly conferred on the Court by Section 53 of the Code of Civil Procedure, which declares: "The Supreme Court may affirm, reverse or modify any judgment or order appealed from, and may direct the proper judgment or order to be entered, or direct a new trial or further proceedings to be had." (See also Argenti v. The City and County of San Francisco, 30 Cal. 463; Pollard v. Putnam, 54 id. 630.)
Of course this power must be exercised in a proper case; and the appellant here contends, as was contended in Enrichs v. DeMill, 75 N. Y. 375, that as the findings of fact were not excepted to, they are to be taken as absolutely true, and as assented to by both parties. But to this we answer, as did the Court of Appeals of New York, in the case cited, that it must be remembered that the plaintiff obtained judgment in the trial court upon the findings as they stood, and was not called upon to except to them, or to insert the evidence in the case to show that they were controverted. And we also agree with the same Court, where it says, in another case—Griffin v. Marguardt, 17 N. Y. 28—" that extreme caution ought to he exercised in refusing new trials where judgments are reversed. The discretion of the appellate Court should he exercised in that direction only in cases where it is plain either from the pleadings or from the nature of the controversy, that the party against whom the reversal is pronounced, cannot prevail in the suit."
In the present case, the counsel for the respondent asserts that when the findings were settled they objected to the finding in respect to the custom and usage of the Pacific Mail Steamship Company with reference to the voyages of their steamships between San Francisco and Hong Kong, and that if judgment had been against the plaintiff, they would have impeached it by bill of exceptions, bringing up the evidence. As that usage and custom is an important fact in the case, we are of the opinion that the cause ought to be remanded for a new trial.
Judgment reversed and cause remanded for a new trial.
Morrison, C. J., and McKee, Myrick, and Sharpstein, JJ., concurred.