Case ID: scl_4/html/0352-01.html
Source: Caselaw Access Project
Author: {"author": "Waties, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CONSTITUTIONAL COURT, CHARLESTON,
    JAN., 1810.
    Bixby v. Adams.
    Where by a covenant a ship was to be given up to the defendant as oumef, upon a certain event, he paying the sailing expences, the freight earned by the voyage in question, belongs to the defendant.
    Motion for a new trial. Covenant, tried before Gkimke, J. in Charleston district.
    Verdict for the defendant.
    The motion for a new trial was argued the 8th and 9th of January, 1810, before all the judges except Gkimke, J., absent sick; by Cheves, and Pringle, for the plaintiff; and by Drayton, Pak-kek, and Simons, for the defendant.
    The following questions were debated : 1. Whether insurance be included in sailing expences ? The part of the case to which this question applied was this : The plaintiff was owner of a ship in the port of Charleston, and sold her conditionally to the defendant, to make a voyage to the Havana. An agreement under seal was entered into, in which it was stipulated that the defendant should re-convey the ship, and deliver her up to the plaintiff at the Havana, free from any embarrassment on account of her sailing under Spanish colors, and pay the plaintiff so much; and also, that the defendant should pay the plaintiff every expence that might accrue in consequence of the said ship sailing under Spanish colors. And in case the defendant should fail in performing the stipulation on his part, that then he shoutd pay the plaintiff 6000 dollars specific damages; and the said ship in that case was to be retained by the defendant, and become his property, without paying the sums agreed on in case the ship should be returned to the plaintiff. But in ad. dition to the 60Ó0 dollars, the defendant was to be liable to the plaintiff for all and singular the expences of sailing the ship from, the date of the contract until payment of the 6000 dollars, the same as if he were the otsner.
    
    It appeared that the plaintiff endeavored to effect insurance oa the ship before she passed Charleston bat, in Charleston, without success, and that he thereupon immediately wrote to Boston, where insurance was effected on the best terms; but the premium was very high, in consequence of apprehensions of a war between Spain and the United States. A memorandum, signed by the deferfdant, was given in evidence, which imported that the defendant authorized the plaintiff to insure the ship for his own account and risk, the premium to be settled by himself; the said memorandum being intended to serve the plaintiff in recovering on the policy, as the ship was really his, although nominally the defendant’s; The ship reached the Havana, where the defendant’s agent made his election to take the ship upon the terms of the agreement; but he objected to paying the indurance, which the plaintiff claimed as included in the terms of the agreement, under the agreement to pay the expenses of sailing the ship, from the date of the agreement, until payment of the 6000 dollars, the same as if he were owner. Several intelligent and respectable merchants, proved on the trial, that sailing expenses do, in relation to the owner, include premium of insurance. On the other hand, several other respectable and intelligent merchants declared, that sailing expenses did not, as regards persons hiring, or chartering, vessels, include premium of insurance.
    The judge charged in favor of defendant.
    Another question was, whether the defendant was to be liable to pay the plaintiff for the freight agreed to be paid to him, upon re-couveying the ship to him, in case the defendant took the ship, and paid the specific damages, 6000 dollars, and sailing expenses ?
    For the plaintiff it was insisted, it was evident from the terms of the agreement, if the defendant took the ship and paid the specific damages, he was to be regarded as owner from the date of the agreement, aud in his quality of owner, was liable to the sailing expenses, which, in relation to the owner, include premium of insurance ; and that the memorandum of the defendant, made no difference'in the case, as that was intended to apply in behalf of the plaintiff, to enable him to recover, in case of loss on the policy in the event of his being regarded as owner under the agreement, although the ship had been nominally sold to the defendant. The plaintiff’s counsel did not earnestly contend', that their client was entitled to the freight, as he did not claim as owner under the agree» ment. The premium given for insurance, though very high, was the lowest at which the contract could be made. It appeared to be a'50Ut fifty Per cent. It was accounted for, on the ground of the apprehended risk in case of war, and justified on the ground of the very large profits attending masked voyages. It was stated that if insurance be effected at fifty per cent, it is necessary to insure for double the value of the property, in order to secure an idemnity in case of loss. For example t if the value of the property be $100', insurance must be effected for #200, The premium in that case is 100 dollars, equal to the value of the property. In case of loss, the assured receives #201), which refunds the premium, and indemnifies for the loss of the property: It was on this principle the high premium in the present case was given. The plaintiff’s counsel further insisted, that the evidence proved nothing in fire present case, which went to prove that,, as regards the charterer of a vessel, the premium of insurance is never included in sailing expenses. 2 Comyn on Contracts, 531, was quoted. The construction contended for, on the part of the plaintiff, his counsel contended, resulted not only from an examination of the intrinsic evidence which the written agreement afforded, expounding it either according to the rules of grammar, or by the most liberal rules of legal construction, but it resulted also from the extrinsic evidence given in the case, by co-existent and concomitant circumstances, explanatory of the intent of the parties, show, ing that on the happening of such and such events, the defendant was to be substituted as owner of the vessel, in truth and realiiy, instead of being only quasi owner ; and as owner from the inception of the contract; in which character he was to enjoy all the rights and advantages, and be liable to all the disadvantages attached to the character of owner. The defendant had his election to become owner; orto reconvey the ship to the plaintiff, and im. pose on him the character of owner. In the latter case, the plaintiff would have been liable to pay the expense of sailing the ship, and of course to the expense of insurance. Suppose the vessel had been lost before her arrival at Havana ? In that case, the plaintiff would haye been liable to pay the premium of insurance. But arguments ab inconvenienti prove nothing in this case.
    For the defendants, it was argued, that the plaintiff effected the insurance on his own account and risk, and therefore could not throw the expense on the defendant. That, construing the contract by the rules of gramiriar, the plaintiff was to be regarded, a# owner, and not the defendant, in the event which happened. The defendant became liable to pay the sailing expenses to the plaintiff, as if he, the plaintiff, was owner. That the defendant could be regarded in no other light than as charterer.
   January 13,1810.

Waties, J.,

delivered the unanimous opinion of the court, upon the grounds insisted on for the plaintiff* Freight, however, the plaintiff is not entitled to, as, upon the elec, tion of the defendant to take the ship as real owner, and pay, &c., as owner, he was exonerated from the payment of freight, which was to be paid to the plaintiff in the contemplated event of recon. veying the ship to him. In that case, he would have been regarded as owner from the beginning, and the defendant would not have been liable for the payment of the premium of insurance.

New trial granted.