Case ID: mass_3/html/0416-01.html
Source: Caselaw Access Project
Author: {"author": "Sewall, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* William Faris and Ebenezer Stocker versus The Newburyport Marine Insurance Company.
    
      i t insurance “ on the cargo or freight of a ship, both or either to the amount injured, valued at the sum insured,” is an insurance of freight, or of cargo, if in the event the assured should have only one of those descriptions of property at risk in the voyage insured; and if he should have both, then it is ah insurance upon both, proportionably to the interest of the assured in the subjects respectively.
    This was an action upon a policy of insurance, dated June 8th, 1800, whereby the defendants undertook, for a premium of 30 per cent., to insure the plaintiffs “7500 dollars on the cargo or freight of the ship America, at and from Teneriffe, to the port of discharge in the West Indies, or Spanish America, and at and from thence to the port of discharge in the United States, with liberty to proceea from the West Indies or Spanish America to Europe ; both or eithei to the amount insured, valued at the same sum; the ship to sail undei any papers whatever.”
    
    From a statement of facts agreed between the parties, and from papers therein referred to, it appeared that afterwards, in the autumn of the same year, when the arrival of the ship at La Vera Cruz in Spanish America, under Spanish papers, the discharge of her cargo, and a subsequent seizure of it by the Spanish government, were fully known to the parties concerned, a memorandum was added in the margin of the policy in these words:—“ The company agree to continue the risk on the sum insured in the policy, at and from Vera Cruz to the Havanna, either on board the America, or on board a government ship or ships of war of not less force than twenty guns ; and at and from the Havanna to the United States, on board any American vessel or vessels, on which the same may be shipped, to take an equal proportion of each shipment, as the sum insured bears to fhe whole interest of the assured
    
    It further appeared from the deposition of Keyran Walsh, master of the America, and which is referred to in the case stated, that the ship sailed in December, 1800, from La Vera Cruz, with about 1000 dollars, part of the proceeds of her outward cargo, and with merchandise on freight, under Spanish colors, bound for the Havanna ; and that in the passage, the ship and cargo were captured by an English vessel of war, and condemned as Spanish property, war then existing between * Great Britain and [ * 477 ] Spain, which is the loss demanded in this action. It was agreed that the freight which would have accrued to the owners of the ship, in her voyage from La Vera Cruz to the Havanna, and which was lost by her capture, would have amounted to 6000 dol lors; in which it is agreed that the plaintiffs were interested to the amount of two thirds. The plaintiffs, having received on a prior policy an indemnity for the - loss on the cargo, demanded in this action their loss in the freight of the ship when captured.
    The case was argued at the last July adjourned term, in Suffolk, before Sedgwick, Sewall, Thatcher, and Parker, justices, by Liver more and Otis, for the plaintiffs, and Dexter and Prescott, for the defendants.
    
      For the plaintiffs, it was contended that, under the words of the policy and memorandum in this case, the assured had their election to apply the insurance to cargo or freight, as the facts might give occasion ; and it was believed that this would not be denied as to the expressions in the original policy; but, perhaps, it might be argued by the defendants that the language of the memorandum has narrowed the right of the assured in this respect.
    When a memorandum is added to a policy of insurance, and intended as a part of the original contract, such a construction ougli/ to be given as shall make the whole consistent and operative, if possible ; and this, notwithstanding a strictly technical interpretation, might give it another aspect. The intention of the parties in this transaction is very clear. When the assured found -that their cargo was under seizure at La Vera Cruz, and were uncertain of its release, or whether the ship would tarry until a decision should be had, they desired to secure any freight which the ship might be entitled to, in case of her leaving the cargo behind, and at the same time to protect the proceeds of the cargo, in whatever vessel they might be shipped, and to guard against the effects of a deviation in case the property should be returned to the United States by the way of the Havanna.
    
    On what ground can it be presumed that they intended to secure a cargo of trifling value, and to neglect a freight of a much grcatei amount ? The company agree in the memorandum [ * 478 ] * to continue the risk in the policy; which must mean the same risk, viz., on cargo or freight. Ignorant what would be the ultimate course of the business, the plaintiffs desired to secure themselves from loss in any event, to cover their interest in every supposable case. This freight was not insured in any other policy; the defendants have received the premium for it, and they ought to respond for its loss.
    
      For the defendants, it was argued that, but for the memorandum, the voyage to the Havanna would have been a deviation fatal to the insurance; and that the memorandum took the insurance wholly from the freight, and, by necessary construction, confined it to cargo. No freight could accrue to the plaintiffs upon property shipped on other vessels than their own. They must in such case have paid, not received freight. The phrase on board, which is three times repeated in the memorandum, shows dearly that property or cargo was intended to be assured, and not freight, to which the phrase is never applied; so also the expression to take an equal proportion of each shipment, necessarily confines the contract to cargo.
    Under this memorandum, if the plaintiffs had afterwards shipped the proceeds of their outward cargo in other vessels, which had been lost, and the America had arrived in safety, it would not lie in the mouth of the company to say they were not liable for such loss, The very terms of their contract would rebut them.
    It is agreed that the words “ continue the risk,” of themselves must mean the same risk; but the words added necessarily lead to another interpretation. The risk is agreed to be continued to the same amount, but not on the same objects.
   The action was continued nisi for advisement, and the opinion of the Court was delivered at Boston, March term, 1808, by

Sewall, J.,

[who, after a brief recital of the facts in the case, and observing that the plaintiffs having been paid on a prior policy for their loss in the cargo, now proceed for their loss in the freight of the ship when captured, proceeded.] The defendants resist this demand on the ground that for a loss happening in a voyage from La Vera Cruz to the Havanna, * they are [ * 479 ] not liable on the terms of the original policy; and if at all liable in this action, it must be by force of the memorandum annexed to the original policy engaging a continuance of the risk. And they contend that this engagement respected only such shipments as should be made at La Vera Cruz, in the manner stipu lated by the memorandum for account of the proceeds of the ship America’s outward cargo. Those shipments, it is admitted, have all arrived in safety, excepting the amount captured, for which the plaintiffs have been paid.

Since the decision by this Court in the action brought by these same plaintiffs against Abel Harris , upon a policy of insurance of the same vessel and voyage, the construction of the original policy in the case now under consideration has been taken to be settled ; and in the argument it seems to have been understood that the outward voyage of the ship America finished at La Vera Cruz, and that the voyage from thence to the -Havanna was not protected by the policy, as it stood without the memorandum.

The case at bar has been argued upon this extension and continuance of the original contract. That expressly included a risk of freight as well as goods or cargo. The words we agree to continue the risk on the sum insured on the policy, seem necessarily to revive the insurance on both subjects. The subsequent provisions, though applicable to the risk of goods only, do not, by any necessary construction, exclude a risk on freight, where the same stipulations were not requisite. And upon the whole, the opinion of the Court is, that the memorandum, annexed to the original policy, continued the risk of freight, as well as the risk of goods or cargo originally undertaken.

To construe this insurance, at the election of the assured after the event, to be of the freight only, exclusive of the cargo, would establish a very unequal contract between these parties. This, construction, for which the plaintiffs contend, is inadmissible, unless it appeared to be the unavoidable import of the words of the con tract; which is far from being the case in this instance. The alternative in the original policy, * especially con- [ * 480 ] necting with the words freight or cargo, the words or either to the amount insured, which are separated by the description of the voyage, and have no meaning but in the proposed connec tian, more naturally imports an insurance of freight or cargo as interest shall appear. In this view of it, the contract may be explained, an insurance of freight or of cargo, if, in the event, the insured should have only one of those descriptions of property at risk in the voyage insured; and if he should have both descriptions at risk, then it is an insurance upon both proportionably to the in terest of the insured. . .

This was the construction in the case of Amory vs. Rogers , somewhat analogous to this. I may cite, also, in support of this construction, the authority of Emerigon, who, speaking of insurances in the alternative, particularly of one where the words of the policy were, upon a certain ship, to be either upm the vessel or the cargo, observes that at first view the insured might appear to reserve to himself, by a clause of this kind, a power of determining after the event what was the risk of the insurers, and to place it upon the cargo or the vessel at his election. Such a power, he says, would be odious, and an opening to many frauds. And he expresses his opinion to be, that by such a stipulation the policy is to attach, according to the interest of the assured, either upon the one or the other subject; and if he shall be found to have an interest in both the subjects mentioned, then the alternative is to be construed as a copulative .

The goods, which were the proceeds .of the America’s outward cargo, finally shipped at La Vera Cruz for the insured and others concerned, amounted, according to their value there, to the sum of 13,647 dollars; and the freight lost in the America was, according to Capt. Walsh’s deposition, 6000 dollars at the least. The whole funds of the concerned are to be considered as amounting to 19,647 dollars within the description of this insurance, in which the insured, the plaintiffs in this action, were interested two thirds, or 13,098 dollars, of which four thirteenths nearly was freight. The same proportion of the sum insured, as the freight bears to the [*481 ] amount of *the funds collectively, is, therefore, recoverable in this action as a total loss of the freight insured, with interest upon the amount from the time when it became due by the terms of the policy. And the plaintiffs are to have judgment accordingly.

Judgment was accordingly entered up, pursuant to the foregoing opinion, as of this term.

The Chief Justice was formerly of counsel, and for that '•easoi did not sit in the cause. 
      
      
        Stocker & Al. vs. Harris, ante, page 409.
     
      
       1 Esp. Rep. 207, cited Marsh. 531.
     
      
      
        Emerig. 290, ch. 10. |