Before Waterman, Moore and Smith, Circuit Judges.
Plaintiffs, Sidney I. Greene, Noel Goldblatt and Lionel Goldblatt, of Chicago, Illinois, copartners doing business as Morris Fisheries Co. and as HO-MA Packing Company, purchased three shipments of frozen catfish fillets from the Grimsby Frozen Products Co. (Grimsby) of Grimsby, England. The three shipments were shipped aboard three separate vessels. Grimsby insured the shipments against loss or damage. The fillets were transported by truck overland from Grimsby, England to the ports of departure. Two of the vessels, the Bassano and Marengo, departed from Hull and the third, the Media, from Liverpool. The three vessels arrived in New York harbor on August 27, 1952, September 13, 1952, and September 25, 1952. When the fillets arrived they were warehoused at the Harborside Warehouse in Jersey City, N.J. Ihere was evidence to the effect that in October 1952, two prospective buyers refused to purchase the fish, and that then the plaintiffs discovered that some of the fillets were probably unfit for sale. On November 6 and November 8, 1952, plaintiffs transferred the fish to the Riverside Warehouse in Tiverton, R.I., where, on February 4, 1953, the Food and Drug Administration began an examination that resulted, on February 26, 1953, in the condemnation of the fish as unfit for human consumption. During this period, between February 4 and February 26, the plaintiffs notified the insurance underwriters of the action of the FDA. This was the first notice of the condition of the fish that was given the underwriters. They denied liability.
Thereupon plaintiffs sued in the United States District Court for the Southern District of New York and recovered judgment against defendant Geoffrey Cheetham, as the representative of Grimsby's insurance underwriters, for the loss plaintiffs incurred as a result of the condemnation. Defendant appeals.
We are of the opinion that the court below erred in its construction of the insurance contract involved here, and that this error precluded the taking of evidence that in our judgment is essential to the just disposition of the controversy. Consequently we reverse the judgment below and remand the case for a new trial.
The underwriters issued two floating cover policies to the shipper, Grimsby, which provided coverage for frozen fish shipments to be made by Grimsby, as follows:
"From any port or ports and/or place or places in the United Kingdom (including risk from warehouse in interior of the United Kingdom if required) to any port or ports and/or place or places in the World. Via any route and including transhipment if required.
"On: - Frozen Fish * * *"
These are typical open-cover policies similar to those which this court only recently construed in Hamdi & Ibrahim Mango Co., Ltd. v. Reliance Insurance Co., 2 Cir., 1961, 291 F.2d 437. The assured binds the insurer by issuing a certificate of insurance for each specific shipment and inserting therein the valuation of the shipment, the name of the vessel, and the route for which coverage is to be had. The certificate is negotiable and normally is transferred to the consignee or purchaser. A copy of the certificate is forwarded to the underwriter, who then computes the premium based on the coverage desired. In computing the premium the insurer takes into consideration the nature of the goods shipped, their declared valuation, the method, route, and estimated length of time of transportation, whether warehousing as well as port-to-port transportation is to be covered, and other relevant factors. This procedure facilitates the use of insurance by businesses concerned with the transportation of goods and is a vast improvement over separate-shipment insurance.
In this case Grimsby executed three certificates of insurance under its open coverage policies to cover the three shipments. Loss, if any, was to be payable to the plaintiffs herein, the purchasers of the shipments. This made the entire open coverage policies applicable to the shipments but applicable only to the extent embraced within a reasonable interpretation of the insured's intent as found from the language it used in the certificates. See Industrial Waxes v. Brown, 2 Cir., 1958, 258 F.2d 800, 802, certiorari denied, 1959, 358 U.S. 931, 79 S. Ct. 319, 3 L. Ed. 2d 304. The certificates contained a broad reference to coverage, similar to that set out in the main policy quoted above, as follows:
"* * * from warehouse at any port or ports, place of places in the United Kingdom to warehouse at any port or ports, place or places in the World."
However, in the place left for the assured's declaration of coverage the assured inserted from "Hull" to "Chicago via New York" for two of the shipments and from "Liverpool" to "Chicago via New York" for the third.*fn1 Therefore, if the more restricted statement of coverage made in each declaration of coverage is to control, it follows that the overland transportation leg, the leg from Grimsby, England to the English ports, was not covered.*fn2
The crucial question in this case is whether the language of the main policy or the language chosen by the assured for insertion in the certificates defines the extent of the coverage against loss, for the parties stipulated at the trial that there was no change in the condition of the fish after the fish were stowed on board ship at the English seaports until they were condemned at Tiverton, Rhode Island. The court below construed the insurance contract to cover the overland leg and discovered no ambiguity between the general coverage clause in the main policy and the specific declaration of coverage in the certificates.*fn3 However, we do not find the problem as clear cut as the trial court found it. We think that, in such a conflict, ordinarily the more specific declaration of coverage would be binding instead of the all-inclusive provisions of the policy, and think it so particularly when, as here, the assured may delineate the extent of his own coverage. See Hamdi & Ibrahim Mango Co., Ltd. v. Reliance Insurance Co., ...