Court Opinion

ID: 5843809
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:39:22.691033+00
Date Added: 2024-06-11T08:43:51.607156
License: Public Domain

Silverman, J. (dissenting).
I would modify the order appealed from to the extent of granting summary judgment in favor of plaintiff as to all transactions, except with respect to shipments made to Graupner in Germany. The action is for premiums on a marine open cargo policy of insurance; the liability for premiums depends on whether the policy covered the particular transactions here involved. The policy contains a general coverage clause covering all shipments consigned to or shipped by the defendant assured (Schlesex) "and in which the Assured may have an insurable interest”. Excluded are "shipments sold by the Assured on F.O.B., F.A.S., Cost and Freight or similar terms whereby the Assured is not obliged to furnish ocean marine insurance and excluding shipments purchased by the Assured on terms which include insurance to final destination”. Except for the Graupner transactions, defendant acted as agent for a principal (perhaps undisclosed) who was purchasing the goods. The goods were billed to defendant, the seller relying on the defendant’s credit. Defendant would then rebill its principal. Thus the defendant was liable to the sellers for the price of the goods. True the defendant’s principal was obligated to reimburse defendant; but there is always the risk that the principal may become insolvent or may simply breach its contract, a risk which may increase if the principal never receives the goods due to loss or damage en route. As defendant was liable for the purchase price of the goods to the seller, it was at risk. Therefore, defendant had a "lawful and substantial economic interest in the safety or preservation” of the property and thus an insurable interest. (Insurance Law, § 148.) The remaining exclusions are inapplicable. The exclusion relating to shipments on F.O.B., etc., terms applies only to shipments "sold by the Assured.” A purchasing agent who causes the goods to be delivered to its principal is not selling the goods. Vis-á-vis his principal, the relationship is purely one of principal and agent and not buyer and seller. In this view, it is unnecessary to consider whether the phrase "or similar terms” is limited to delivery terms like the immediately preceding phrases, F.O.B., F.A.S., cost and freight. If this action were by the assured against the insurance company to recover on the policy, the coverage clause would clearly be interpreted to cover these transactions. Considering the defendant assured as purchaser of the shipments, there is no contention that the shipments were purchased by the assured "on terms which include insurance to final destination.” With respect to the Graupner transactions, the statement is made that these were sales by the assured on an F.O.B. basis and thus excluded from coverage on the policy. While defendant should have furnished some documentary evidence to support this view instead of relying on the unsupported affidavit of one of its officers, I think an issue of fact has been raised as to those transactions.