Gargano v. Home Insurance

YORK, P. J. By the instant action, plaintiffs seek to recover under a policy of so-called “cargo” insurance issued by defendant company on June 6,1944, whereby the latter agreed to insure plaintiffs up to $5,000 for loss of property upon any one automobile, truck, trailer, or vehicle, or any one semitrailer operated by plaintiffs, whether owned, leased or rented by them, against loss resulting from plaintiffs’ liability to others for loss or damage to general merchandise caused by various perils enumerated in the policy, including collision or overturning of said vehicles, while such goods and merchandise were in the custody and control of plaintiffs and in due course of transit.

The loss for which plaintiffs seek recovery arose from an accident occurring on August 18, 1944, in Lake County, California, on the road between Kelseyville and Yuba City, when a tractor and a semitrailer owned by one E. W. Brown and leased from him by plaintiffs under an oral agreement, went out of control and overturned on a curve, thereby damaging [255]to the extent of $2,160 a cargo of pears which was being carried on said semitrailer. The pears were being shipped by plaintiffs from Kelseyville to Tuba City under contract with the shipper, Kelseyville Packing Company.

Following the accident, plaintiffs paid the shipper for the loss of the pears and made claim therefor against defendant insurer under the policy of cargo insurance heretofore mentioned. Defendant denied liability on the sole ground that plaintiffs had breached the insurance contract and forfeited their right to recover thereunder, for the reason that they had agreed with B. W. Brown to make the protection afforded by such policy available to him, thus impairing defendant’s right of subrogation against said E. W. Brown.

The trial court found with respect to this issue as follows: “It is true that three or four weeks before said accident and damage to said pears which occurred on August 18th, 1944, the plaintiffs and B. W. Brown made, executed and entered into an oral agreement wherein and whereby the plaintiffs promised and agreed to make available to the said B. W. Brown the protection, benefits and insurance coverage afforded by said policy of liability insurance No. TM 330197 issued by The Home Insurance Company on or about June 6, 1944. It is further true that as part of said agreement, said B. W. Brown promised to pay to plaintiffs the premiums required for said policy of insurance, in consideration of the plaintiffs’ promise to make the protection, benefits and insurance coverage of said policy available to said B. W. Brown.