#### John Welles and Another *versus*William R. Gray.

Where the supercargo of a ship, captured and libelled as prize, made a reason able compromise with the captors, giving up a part of the property and retaining the remainder, it was holden that the underwriters on the cargo were bound by such compromise, and that, in the adjustment of the loss, no regard was to he had to the higher price which the part saved produced at the port to which tire *51vessel was carried, compared with the value of the same at her port of destination.

Where a policy of insurance was effected in the names of A, B, and C, on merchandise owned by them as follows, viz., A owned five eighths thereof, B two eighths, and C one eighth; and other policies on the same adventure were afterwards effected by A alone; and it was understood that, if the first policy was appropriated according to the respective interests of A, B, and C, in the subject of insurance, A would be over-insured, otherwise not; — it was holden, that A had a right to appropriate the several policies, so as to cover the property insured belonging to the whole concern, and that the underwriters on the last policy were liable for a loss incurred.

This was an action of the case upon a policy of insurance upon the cargo of the brig *Caroline,*at and from *Boston*to the Island of *Sicily,*effected in the office kept by *Charles Bradbury,*on the 30th of March, 1809. The policy was effected in the names of the plaintiffs, for 14,500 dollars, and the defendant subscribed 3,500 dollars.

The action was tried on the general issue, November term, 1811, before *Parker,*J., from whose report it appears that the vessel and cargo, on the voyage to *Messina,*in *Sicily,*were seized and taken possession of by a *French*privateer, and carried into *Naples,*a place within the control and under the influence of the *French*government.

* The captors had instituted their process against vessel [ * 43 ] and cargo in the imperial council of prizes in *Paris,*the vessel and cargo remaining at *Naples. Ralph J. Reed,*who went out in the vessel as supercargo, and was owner of one fourth part of the same, proceeded to *Paris*to look after the property, and, while there, believing it to be for the interest of all concerned, he made a compromise with the captors, by which he was to receive back the vessel, allowing the captors two thirds of the estimated value thereof at *Naples,*and was to receive one third of the value of the cargo, estimated at 33,000 ducats; certain proceedings of the council of prizes having been gone through for the purpose of executing more perfectly the contract between the parties. The said *Reed*actually received on the said compromise the whole of the vessel, and 32,000 ducats, for the use of the owners of the cargo, and also the private adventures of the master and others.

This action was brought to recover two thirds of the sum insured by the defendant, and also his proportion of expenses, consequent upon the capture, and in effecting the compromise.

It was in evidence from a person who was in the *Mediterranean*about the time of this voyage, that the market was very high, at *Naples,*for such articles as composed the cargo of the *Caroline,*and that in *Sicily*they were very low, so that the same articles would bear no profit.

*52A verdict was taken for the plaintiffs, which was to be set aside or altered, as the Court should determine the right to recover upon the facts reported. A question was also reserved, whether all the interest of the plaintiffs had not been insured by prior policies, and prior subscribers to this policy, before the defendant subscribed, which depending in some measure upon a question of law, it was agreed that it should be determined by the Court; and for this purpose, all other policies upon this cargo were to be considered as in the case.

* There were three policies, including that on which this action was brought. The first was effected in the name of the plaintiffs, the said *R. J. Reed*and *David Sawyer,*for 10,000 dollars, dated March 28. The second was effected in the name of the plaintiffs only, for 8,500 dollars, dated March 29. The third, being the one in question, was also effected in the name of the plaintiffs alone, for 14,500 dollars, dated March 30, to which the defendant was the last subscriber.

It also appeared that the plaintiffs had received the whole of the money, which became due for the loss on the two policies first above mentioned; they being interested five eighths, the said *Reed*two eighths, and the said *Sawyer*one eighth, of the vessel and cargo. And as the plaintiffs refused to produce their books, to show how they had appropriated this money, the defendant contended that this was evidence, from which it was to be presumed that the plaintiffs had retained a proportion of it, according to their interest in the subject insured. The judge reserved this, also, as a question of law

The cause was argued at this term by *Amory*and *Dexter*for the plaintiffs, and *Prescott*for the defendant.

*Prescott*contended that *Reed*had no authority to enter into this compromise, so as thereby to bind underwriters. It is a very dangerous power to intrust with supercargoes, and particularly so, when, as in the case at bar, they are part owners of the property at risk. But if this loss be properly chargeable on the underwriters, it is a general average, to be apportioned on the ship, her freight and cargo, including the private adventures. The cargo, in adjusting this average, is not to be estimated at its value in *Naples,*but either by its original invoice price, or by its value at *Messina,*the port of destination. If two thirds were given up to save the remainder, it availed also to procure for that remainder the high prices at *Naples.*

* Further, the defendant contends that the plaintiffs were over-insured. The first policy must be presumed to attach according to the respective interests of the assured. If it were otherwise, their books, which they refused to produce at the *53trial, would show it. If it be so, then the plaintiffs were fully insured previous to the defendant’s subscription.

*Amory*and *Dexter,*for the plaintiffs,

agreed that if the first policy is necessarily to be appropriated according to the respective interests of the assured, the defendant is discharged. But on this point they cited and relied on the case of *Lee*vs. *Massachusetts Fire & Marine insurance Company,*(1) as establishing their right to apportion the sum insured among themselves, provided that the whole amounted to no more than an indemnity.

That a compromise, *boná fide*made with captors, binds underwriters, is seen in the case of *Berens*vs. *Rucker.*(2)

This was a partial loss of two thirds of the vessel, and also of the cargo. The underwriters have nothing to do with the markets. One third of the cargo being restored to the insured, they had a right to dispose of it where they pleased. The underwriters were bound to restore to the assured the part which they had lost, and this at *Naples,*where the loss accrued. Yet they claim to have the loss considered as a general average, to which it bears no resemblance.

*Prescott,*in reply.

This was in nature of a ransom, by which two thirds were given up, to save the remainder, which is piecisely the foundation for a general average. The compromise was induced by the high prices obtainable at *Naples,*and the assured realized, in fact, from the one third saved, as much as the whole would have been worth at *Messina.*Yet they claim a loss of two thirds of the whole adventure. The utmost they can be entitled to is the invoice price, or the value at *Messina.*This case may well be compared to that of a cargo owned by * two £ * 46 ] in severalty. The moiety of one of the owners is thrown overboard for the preservation of the other, which at market pro duces 100 per cent, advance. The owner of the part lost would be entitled to a moiety of the proceeds of the part saved.

(1)

6 *Mass. Rep.*208.

(2)

*Marsh*430. —1 *W. Black.*313, S. C.

*By the Court.*

We have no doubt of the authority of the super cargo, in the circumstances the property was found to be in, to make the compromise; and a reasonable compromise, so made, is binding on the underwriters, (a)

As to the question of over insurance, we are of opinion, that the plaintiffs have a right to appropriate the several policies so as to cover the property insured, belonging to the respective persons concerned. The defendant’s claim to an allowance on this ground is, therefore, not supported, *(b)*

*54The loss, in this case, is to be considered as a partial loss of two thirds of the vessel and cargo, in the adjustment of which no respect is to be had to the high prices at *Naples,*or the lower comparative value at the original place of destination.

*Judgment on the verdict.*

ADDITIONAL NOTE.

[See, as to the parties to a policy, *Flemming*vs. Marine, &c., 4 *Whart.*59. — *Rider*vs. Ocean, &c., 20 *Pick.*259. — *Robinson*vs. Gleadow, 2 Scott., 250.

As to the rights and duties of parties in case of capture, *Covering*vs. *Mercantile*&c., 12 *Vick.*348.— Maryland, &c., vs. Bathurst, 5 *Gill. & J.*159. — F H ]

(a)

 [Hughes, 225. — *Parks,*109. — 2 *Marsh.*503. — Ed.]

(b)

 [The facts are not sufficiently reported to raise this question- It does not an *54pear what was the amount in value of the property insured. The counsel for the olaintiff, however, admitted, as it appears from the report of the argument, that “ if the first policy was to be appropriated according to the respective interests of the assured, the defendant would be discharged.” The rule, adopted by the court in the above case, was probably considered as having been established by a former decision in *Lee & Al.*vs. *The Massachusetts Fire & Marine Insurance*Company, (6) *Mass. Rep.*217. In delivering the opinion of the Court in this case, Sewall, J., said, The right in the assured to apportion their insurance among themselves puts an end to the questions raised in the case at bar; and that they have this right, when not restricted by any circumstances in their mode of insurance, or any declared intention or previous agreement among themselves, and to the extent requisite to give validity to both contracts, [ can have no doubt; and this even after a loss is known.” The learned judge refers to *Kewly*vs. Ryan, (2 *H. Bl.*347,) as being a case in point. But neither this case, nor *Henchman*vs. Offey, therein mentioned, nor any other case to be found in the books, maintains any such doctrine. These cases decide only that, in case of divers polic.es on merchandise to be shipped in any “ ship or ships,” the insured, before the risk commences, may apply or appropriate the insurance to merchandise in whatever ship or ships he thinks proper, within the terms of the policy. There is no analogy between these cases and the case before us. If there had been but one policy in this case, namely, the first, wherein insurance liad been made for several persons interested in the merchandise, in case of a loss, each would have been undoubtedly entitled to receive a part of the amount to be recovered of the underwriters, proportion-able to his interest in the property insured. None could claim any greater proportion. This must have been the implied agreement between all the parties at the time when the contract was entered into. On these principles, in the absence of any express agreement to the contrary, an adjustment between the parties must have been made And there is no reason, from any circumstances in the case, to believe that there was really any other understanding between the parties upon this subject. How, then, could the making of the two subsequent policies for the benefit of two of the several persons insured by the first policy, alter the terms of that policy, or enlarge, or diminish, the interest of any of the persons insured thereby? It cannot be denied that, when the first policy was made, these two persons were principally interested therein ? They had done nothing to divest themselves of that interest when the second and third policies were made for their sole benefit. How could they, then, contrary to the fact, be permitted to say, that they had no interest in the first policy ? If their interest was once coyered by the first and second policies, as would seem to have been the case, how could they legally make any claim upon the last underwriter on the third policy ? As it appeared that the first policy, as well as the second, had been paid, the presumption cer'zimly was, that the moneys had been apportioned among the sev eral persons according to their respective interests therein. There was nothing in tire case to rebut this presumption. But of what consequence was it how the parties chose to apply the money, or divide it among themselves ? The real question was, whether the plaintiffs’ interest in the property had not been covered by tiie two first j olicies when the third was made. This depended upon facts which could not be altered by any appropriation of the moneys recovered on those policies. If the plaintiffs chose to give their share to the others, that could not give them any right to claim to that amount against an underwriter on a subsequent policy. — Ed.]