Milburn Wagon Co. v. Evans

Diceinson, J.^*

In August, 1877, a contract was entered into in writing between the plaintiff and defendants, by the terms of which the latter were constituted agents of the plaintiff for the sale of its wagons. The agents were to pay freight charges upon wagons shipped to them for sale, and to “take out a policy or policies of insurance in some good and reliable company, in the name and for the benefit of the party of the first part,” (plaintiff,) and “forward the same to its office at Toledo, and pay the expense, of such policy or policies.” They were to make sales and account for the same; receiving for compensation and reimbursement whatever the wagons should be sold for in excess of “list price,” with which they were to be charged by the principal. Any wagons unsold eight months after shipment were to be subject to the order of the principal, by paying freight on the same. Wagons were shippéd to the agents in August, 1877, and two policies of insurance were taken out by them, running, respectively, six and twelve months. The policies were sent by mail to the principal, but do not appear to have ever been received. No other insurance was effected. In August, 1880, some of the wagons still remained in the agents’ possession unsold, and were then destroyed by fire without their fault. The district judge, upon these facts, held that the defendants were not responsible to the plaintiff for the price- or value of the wagons so destroyed.

The only question presented upon this appeal is as to the correctness of such conclusion. We think it was right. The property remained that of the principal, and the contract, did not in terms make its agents insurers of it, or responsible for its destruction. The only ground upon which they can be claimed to be answerable is that, in violation of an obligation imposed by the contract, they failed to maintain insurance upon the property three years after it was consigned to them. The contract did not impose such an obligation. It required the agents, at their own expense, to effect insurance in favor of their principal, but prescribed no period for which it should be effected, or during which it should be maintained. It did not require them to keep the property insured during all the time it might remain in their possession, nor can the contract be fairly interpreted as expressing such an intention, especially in view of the provision which entitled plaintiff, at any time after the expiration of eight months, to retake the property by merely reimbursing the agents the freight which they had paid on the same. The defendants could not take out a policy of insurance for any definite time after the expiration of eight months, without the hazard of paying premium for insurance covering a period beyond that during which they would have possession of the property with the right to sell and reimburse themselves the expense of such insurance, for the plaintiff might retake the property at any time, without rejsaying the costs of the unexpired insurance. The contract cannot be construed as requiring more than that the defendants should effect insurance for a reasonable time, not exceeding eight months. They are not to be held answerable for property destroyed, without their fault, three years after the making of the contract, and the delivery of the property to them under it.

Judgment affirmed.

* Crilfillan, C. J., because of illness, took no part in this case.