Court Opinion

ID: 8830987
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:03:53.496061+00
Date Added: 2024-06-11T17:04:55.517986
License: Public Domain

HOUGH, Circuit Judge
(after stating the facts as above). The inference is almost irresistible that this action was suggested by the fact that the name of the Shipping Board was inserted in the policies. The evidence showed no authority whatever for such mention of defendant ; it was not asked for, never authorized, and seems to us to be almost the whim of a broker employed by Fougner Company. Argument, however, is now made, seeking to justify this suit, had the name of the Shipping Board nowhere appeared in the policies as issued, viz. that Fougner Company was no more than an agent or servant of the Shipping Board in and about the operation of Yard No. 2 and the construction of said ship; so that the Shipping Board was the master in respect of the servants covered by one liability policy, and the principal as to the strangers whose possible demands were covered by the other.
This depends upon the nature of the contract between Fougner and defendant. In its essentials it does not vary from any other agreement to produce a certain result at cost, plus a percentage. There are no unusual terms in; it-requiring consideration except possibly a clause whereby Fougner agreed to insure (inter alia as these policies insure) “in such form and insurance companies as are satisfactory to the” Shipping Board. The cost of such insurance was an item of cost producing the ship, and therefore defendant was under a contractual liability to pay Fougner Company for what these policies cost — not because they were policies of insurance, but because they were items of cost in ship production.
The court below ruled that Fougner Company was an independent contractor, a point upon which we have no doubt. Casement v. Brown, 148 U. S. 615, 13 Sup. Ct. 672, 37 L. Ed. 582, Chicago, etc., Co. v. Bond, 240 U. S. 449, 36 Sup. Ct. 403, 60 L. Ed. 735, and Salliotte v. King, etc., Co., 122 Fed. 378, 58 C. C. A. 466, 65 L. R. A. 620, are conclusive and dispense with further discussion, because it is obvious that the Shipping Board did not retain, obtain, or possess the right to direct, not only how the work should be done, but the results to be accomplished. It follows, from the holding that Fougner Company was an independent contractor, that the Shipping Board had no insurable interest in respect of the subject-matter of these policies.
Judgment affirmed, with costs.