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B-135607, MAY 8, 1963

B-135607 May 08, 1963
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TO SCHINDEL AND COOPER: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 29. WAS INFORMED BY OUR LETTER OF DECEMBER 28. WAS MOVED BY THE RED TOP TRANSFER COMPANY. WAS SUSTAINED ON MAY 1. A MOTION FOR A NEW TRIAL WAS OVERRULED BY THE SAME COURT ON JUNE 22. THE JUDGMENT WAS NOT COLLECTIBLE BECAUSE OF THE FINANCIAL CONDITION OF RED TOP TRANSFER COMPANY. THE POLICY FOR CARGO INSURANCE WAS AMENDED BY THE ATTACHMENT OF INTERSTATE COMMERCE COMMISSION FORM BMC-32. THIS ENDORSEMENT WAS IN EFFECT AT THE TIME OF THE ACCIDENT WHICH CAUSED DAMAGE TO THE PROCESSING BLUEPRINT MACHINE. IS AN UNCONDITIONAL AND ABSOLUTE PROMISE TO PAY ANY LOSS OR DAMAGE. THE COURTS HAVE HELD THAT UNDER FORM BMC-32. THAT "THOUGH THE PURPOSE OF THIS ENDORSEMENT IS TO "ASSURE COMPLIANCE BY THE INSURED WITH SECTION 215 OF THE INTERSTATE COMMERCE ACT (49 U.S.C.A. 315).

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B-135607, MAY 8, 1963

TO SCHINDEL AND COOPER:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 29, 1963, ADDRESSED TO MR. E. M. SINGER, ACTING CHIEF, REPORTS BRANCH OF OUR TRANSPORTATION DIVISION, CONCERNING OUR CLAIM OF $1,692.24 AGAINST THE RED TOP TRANSFER COMPANY, INC.

YOUR CLIENT, APPLETON AND COX, INC., WAS INFORMED BY OUR LETTER OF DECEMBER 28, 1962, THAT THE GOVERNMENT HAS A CLAIM OF $1,692.24 FOR DAMAGE TO 1 BOXED PROCESSING BLUEPRINT MACHINE. THIS MACHINE, WITH THREE OTHER BOXES OF MACHINES, WAS MOVED BY THE RED TOP TRANSFER COMPANY, INC., THE INSURED, FROM DEMOPOLIS, ALABAMA, TO BROOKLEY AIR FORCE BASE, ALABAMA, UNDER GOVERNMENT BILL OF LADING NO. AF-3434105 DATED JULY 22, 1954.

THE LIABILITY OF THE CARRIER FOR THE DAMAGED MACHINE, IN THE AMOUNT OF $1,692.24, WAS SUSTAINED ON MAY 1, 1959, BY A JUDGMENT IN THE SUM OF $5,230.07, RENDERED BY THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA, WESTERN DIVISION, IN CIVIL ACTION NO. 883. A MOTION FOR A NEW TRIAL WAS OVERRULED BY THE SAME COURT ON JUNE 22, 1959. THE JUDGMENT WAS NOT COLLECTIBLE BECAUSE OF THE FINANCIAL CONDITION OF RED TOP TRANSFER COMPANY, INC.

OUR RECORD SHOWS THAT YOUR CLIENT, UNITED STATES FIRE INSURANCE COMPANY, NEW YORK, NEW YORK, A/C APPLETON AND COX, INC., THE INSURERS, FILED WITH THE INTERSTATE COMMERCE COMMISSION, BUREAU OF MOTOR CARRIERS, THE MOTOR CARRIER CARGO LIABILITY CERTIFICATE OF INSURANCE (COPY ATTACHED), PERTAINING TO RED TOP TRANSFER COMPANY, INC., ON APRIL 14, 1954. THE POLICY FOR CARGO INSURANCE WAS AMENDED BY THE ATTACHMENT OF INTERSTATE COMMERCE COMMISSION FORM BMC-32, ENDORSEMENT FOR MOTOR COMMON CARRIER POLICIES OF INSURANCE FOR CARGO LIABILITY UNDER SECTION 215, INTERSTATE COMMERCE ACT, 49 U.S.C. 315. THIS ENDORSEMENT WAS IN EFFECT AT THE TIME OF THE ACCIDENT WHICH CAUSED DAMAGE TO THE PROCESSING BLUEPRINT MACHINE.

THE FORM BMC-32 ENDORSEMENT, BY ITS TERMS, IS AN UNCONDITIONAL AND ABSOLUTE PROMISE TO PAY ANY LOSS OR DAMAGE, PURSUANT TO SECTION 215, MOTOR CARRIER ACT OF 1935. WILLIAM ATKIN CO. V. NATIONAL LIBERTY INSURANCE CO. OF AMERICA, 5 N.Y.S.2D 863. THE COURTS HAVE HELD THAT UNDER FORM BMC-32, THE INSURANCE COMPANY AGREES TO PAY ANY SHIPPER OR CONSIGNEE FOR DAMAGE TO PROPERTY BELONGING TO THEM COMING INTO THE POSSESSION OF THE INSURED FOR TRANSPORTATION FOR WHICH THE INSURED MAY BE HELD LIABLE (I. ZUCKER'S SONS, INC., V. AUTOMOBILE INSURANCE COMPANY OF HARTFORD CONNECTICUT, 23 N.Y.S.2D 83), AND THAT

"THOUGH THE PURPOSE OF THIS ENDORSEMENT IS TO "ASSURE COMPLIANCE BY THE INSURED WITH SECTION 215 OF THE INTERSTATE COMMERCE ACT (49 U.S.C.A. 315)," THE AGREEMENT BY THE COMPANY "TO PAY ANY SHIPPER" IS UNEQUIVOCAL, UNCONDITIONAL AND NOT RESTRICTED TO INTERSTATE SHIPMENTS.' DAVE LEVINE AND CO. V. WOLF'S PACKAGE DEPOT, 138 N.Y.S.2D 427, 432; AFFIRMED 150 N.Y.S.2D 543; MOTION FOR APPEAL DENIED 151 N.Y.S.2D 601.

IT IS NOTED THAT THE AFFECT OF THE ENDORSEMENT IS TO MAKE THE SHIPPER OR CONSIGNEE A THIRD PARTY BENEFICIARY TO THE INSURANCE CONTRACT AND, HENCE, THE SHIPPER CAN BRING AN ACTION DIRECTLY AGAINST THE INSURANCE COMPANY UPON THE POLICY. CHAPIN OWNE CO., INC., V. NEWMAN, 107 N.Y.S.2D 941. MOREOVER, IT SEEMS CLEAR, ALTHOUGH YOU STATE THE LOSS WAS CAUSED BY AN ACCIDENT WHICH WAS NOT COVERED UNDER THE TERMS AND CONDITIONS OF THE POLICY, THAT BY EXPRESS TERMS OF THE ENDORSEMENT, FORM BMC-32, NO TERMS OF THE POLICY MAY BE READ INTO IT, INSOFAR AS SHIPPERS AND CONSIGNEES ARE CONCERNED YORK-BUFFALO MOTOR EXPRESS, INC. V. NATIONAL FIRE AND MARINE INS. CO., 63 N.E.2D 61; BOLTA RUBBER CO. INC., V. LOWELL TRUCKING CORP. 23 N.E.2D 873; LOWELL TRUCKING CORP. ET AL. V. NIAGARA FIRE INS. CO., CERTIORARI DENIED, 309 U.S. 690. ALSO, IF YOUR CONTENTION THAT THE ACCIDENT WAS NOT COVERED BY THE TERMS OF THE POLICY IS BECAUSE THE VEHICLE IN WHICH THE SHIPMENT WAS BEING TRANSPORTED WAS NOT IN CONTACT WITH THE ARTICLE CAUSING THE DAMAGE, THE WEIGHT OF AUTHORITY ON THAT QUESTION APPEARS TO BE TO THE CONTRARY. SEE GARFORD TRUCKING V. ALLIANCE INSURANCE CO. OF PHILA., 195 F.2D 381 (2ND CIR.); C. AND J. COMMERCIAL DRIVEAWAY, INC. V. FIDELITY AND GUAR. FIRE CORP., 242 N.W. 789; JORGENSON V. GIRARD FIRE AND MAR. INS. CO., 38 N.W.2D 209; BUCKS CTY. CONST. CO. V. ALLIANCE INS. CO., 56 A.2D 338; GOULD-MORRIS ELECTRIC CO. V. ATLANTIC FIRE INS. CO., 50 S.E.2D 295.

IN THE CIRCUMSTANCES WE ARE UNABLE TO COMPLY WITH YOUR REQUEST TO WITHDRAW OUR CLAIM AGAINST YOUR CLIENT, THE INSURER OF RED TOP TRANSFER COMPANY, INC., SINCE YOUR CLIENT IS LIABLE UNDER THE ENDORSEMENT ATTACHED TO THE POLICY WHICH GIVES THE SHIPPER A DIRECT RIGHT OF ACTION AGAINST THE INSURANCE COMPANY. MICKEY FINN CLOTHES, INC. V. YALE TRANSPORT CORPORATION, 23 N.Y.S.2D 84. THE INSURANCE COMPANY'S REMITTANCE, MADE PAYABLE TO THE UNITED STATES GENERAL ACCOUNTING OFFICE, SHOULD BE SENT HERE PROMPTLY TO AVOID FORMAL COLLECTION PROCEEDINGS.

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