Case Name: Amos Toppan versus Amos Atkinson
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1807-03
Citations: 1 Tyng 365
Docket Number: 
Parties: * Amos Toppan versus Amos Atkinson.
Judges: 
Reporter: Massachusetts Reports
Volume: 2
Pages: 330–336

Head Matter:
* Amos Toppan versus Amos Atkinson.
A, in expectation of goods to be shipped, on his account and risk, on board a certain vessel, effects an insurance. No such goods are shipped; but certain other goods are consigned to him in the same vessel, on account and risk of the shippers, whose creditor and general agent A is. A partial loss happens. A cannot recover against the underwriter for such loss, but shall have his premium returned.
Where a plaintiff’s expectation of recovering more than four pounds’ damage is founded in a mistake of therlaw, he will recover but one fourth of his damage as costs.
Case on a policy of insurance underwritten by the defendant A statement of the facts was agreed on by the parties, substantially reciting that the plaintiff, on the first of December, A. D. 1802, caused himself to be assured the sum of 2000 dollars on the cargo of the schooner Charlotte, at and from Fredericksburg to the port of discharge in Newburyport. The defendant subscribed the policy for 300 dollars. At the time of effecting the policy, the plaintiff expected goods to be shipped from Fredericksburg, on his own account and risk, on board the said vessel, to the amount of the sum insured ; and the vessel had then sailed from Fredericksburg, bound for Newburyport, having on board goods to the amount insured, shipped by Winchester, Howard, &f Company, on their own account and risk, consigned to the plaintiff for sales and returns. The plaintiff was then the general agent of that company, and their creditor to a larger amount than the value of the goods shipped. But the vessel had no goods or cargo for the plaintiff as his property, and he had received no advice of the shipment consigned to him at the time of making the insurance. The vessel, having met with damage at sea soon after sailing, put into Norfolk, where the goods shipped by Winchester, Howard, Co., were taken out of the vessel, for their account, and by their agents, Murray Co., of Norfolk. After this event was known at Newburyport, where the parties to this action live, and where the policy in the case was made, the plaintiff received a letter from Winchester, Howard, &f Co., advising of their shipment by the Charlotte, and requesting insurance to be made for their account.
If, upon these facts, the Court should be of opinion that the plaintiff .is entitled to recover, it was agreed that referees should be appointed to adjust the amount of the loss, and judgment be entered up according to their report. If the opinion of the Court should be that, the plaintiff is not entitled to recover any loss, he was to become nonsuit, and the defendant recover costs.
*The action was pending in Essex, and was argued at [ * 366 ] the last November term, at Salem, before Sedgwick, Sewall, and Parker, justices, by Prescott for the plaintiff, and Jack son and Little for the defendant. It was continued nisi for advisement, and judgment was to be entered, as of November term, according to the opinion of the Court.
For the plaintiff,
a partial loss was claimed ; and it was argued that, as the general agent of the shippers, he had authority to make this insurance on their account. The insurance, being on the cargo generally, will apply to any goods in which the plaintiff had an insurable interest. As the creditors of the shippers, had these goods come to hand, he would have had a lien upon them for the payment of his debt; and if Winchester, Howard, Sf Co., had failed, this remittance, and the insurance upon it, would have formed his only remedy.
For the defendant,
it was contended that the subject upon which the present loss is claimed is wholly different from that contemplated by the parties at the time of making the contract. Though, as gen eral agent of the consignors, he might have had authority to effect this insurance, yet in that case it was necessary that he make his representation, and have his policy framed, accordingly. The difference of the risk, and consequently of the premium, in the two cases, makes this essential. When a party insures his own goods, in case of a total loss in the technical sense of the words, the underwriter has a right to an abandonment of the goods in their deteriorated state. But the plaintiff, in this case, had nothing to abandon ; in other words, he could give to the underwriters no benefit of salvage. He had no property in these goods until their safe arrival. The consignors might have insured them in Virginia, and an abandonment to their underwriters would have bound the property. These observations show the material difference in the two risks.
It was to protect underwriters from this inconvenience that the ' form of the policy was changed, and the words formerly inserted, “ as well in their own names, as for and in the name * and names of all and every other person or persons, [ * 367 ] to whom the same may appertain,” &c., left out of the contract, as they are in the policy in this case. They are contained in the policies in the cases cited for the plaintiff, and bills of lading had been received; this observation is a sufficient answer to those cases.
As, in an insurance such as this is now contended to be, there can be no partial loss, the plaintiff must recover, if he recover at all, as for a total loss. It will be agreed that, had the goods of the plaintiff been shipped, as at the time of making the insurance was in the contemplation of all the parties, the plaintiff, on the facts agreed, would have recovered a partial loss only. Thus, upon the happening of the same facts, the defendants might have been liable, in one case, to a total loss, and in the other to a partial loss of five or perhaps ten per cent. The specific risk ought to have been understood at the time of making the contract, and the terms of the contract adapted to it. Every fact varying the risk, which is known to the insured, ought to be communicated by him to the underwriter. Here was no communication of the plaintiff’s expecting a consignment, or of his being the general agent of the consignors.
Had these goods arrived in safety, and the plaintiff found none had been shipped him on his own account and risk, he would have demanded a return of the premium, as he well might; for he could with truth say that he made the insurance on the expectation of such a shipment only. The defendant could not reply, for he did not know, that the plaintiff was the general agent, or the creditor, of the consignors, and so had authority to effect the insurance for his principals, or an insurable.interest of his own. Thus, then, the plaintiff had it in his power to secure himself against a loss without risking any premium.
The case of Wolf & Al. vs. Horncastle respected the construction to be given to an English statute requiring names to be inserted in policies. As to £300, part of the sum insured, in that case the plaintiffs were in effect consignees; and the right of a consignee to insure his special interest in the goods, where, [ * 368 ] * upon their arrival, he is to have a lien upon them for the payment of an existing debt, is not contested. But the risk being a different one from an insurance upon goods of which the whole property is in the assured, it was the plaintiff’s duty to have represented his case as it. in fact existed. That case was also upon a policy in the old form, the insurance being made “ for whom it may concern.”
The case of Hill vs. Secretan shows nothing more than that one having an equitable interest may cause himself to be insured.
Neither of these cases bears upon the present question.
For the plaintiff, in reply.
In this case the plaintiff made no representation. He was not bound to make any. What each party is supposed equally to be informed of, need not be represented. This was a matter of law only, and therefore one must be presumed to know it as weh as the other. Had the defendant made inquiry as to the specific interest intended by the plaintiff to be covered, and been denied an explanation, or been misinformed, it would have been a valid objection to a recovery in this case. The inquiry ought to have been made at the time, and it is unfair to set up the objection now. The words of the policy, being broad enough to cover each kind of interest, ought now to receive such a construction as will apply to the plaintiff’s case, and give him an indemnity for his loss.
It is contended that, upon an insurance of the special interest of an agent, factor, or consignee, there can be no partial loss. If this be true, the plaintiff' indeed has no case. But we deny this position, and we believe that the same construction is to be made in this case as where the general property is in the assured; the same adjustment may be made in case of a partial loss, and the factor recover according to the nature and amount of his actual loss. As factors have a right to secure to themselves the benefit of a consignment, and the object of an insurance in such case being to indemnify the assured, and to put him in the same case he would have been in had no loss occurred, * and [ * 369 ] this object being a lawful one, —it follows that he may recover according to the amount and degree of his loss.
The general position that, where there can be no abandonment, there can be no recovery for a loss technically total, is nowhere laid down ; and it is disproved by the daily and allowed practice of insuring profits. When a ship is condemned as innavigable, and sold, the abandonment is not of the article or thing insured, but of the money for which the article was sold, and it amounts in effect to nothing more than a credit to the underwriter, by the assured, of the amount saved.
The case of Hodgson vs. Glover was an insurance on profits. From the opinions of Justice Groce and Justice Lawrence, the inference is irresistible, that a partial loss may be recovered on such a policy. Yet there the assured had nothing which he could abandon.
Had no loss happened in the case now before the Court, and the plaintiff had demanded a return of the premium, on the ground that he had no goods on board the vessel, the defendant would have rebutted him with the fact of his receiving the consignment of goods from his debtor, upon which he would have a lien for the discharge of his debt, and which consequently was an insurable interest, for which the premium was legally and equitably due.
3 Bos. & Pul. 315, Hill & Al. vs. Secretan. — Ibid. 323, Wolf & Al. vs. Horncastle.
Marshall, 356 Mayne vs. Walter.
6 East's Rep. 315.

Opinion:
And now at this term the opinion of the Court was delivered by
Sewall, J.
The question submitted upon these facts, (which Ills Honor previously stated,) is, whether the plaintiff is entitled to recover, by virtue of this policy, for a partial loss upon the consignment to him from Winchester, Howard, & Co.
By the facts disclosed, it is evident that the policy in this case applied originally to the plaintiff's general property in certain goods expected on his own account, and, in the intention of the parties, had no other application. To make a question in this case, is to suppose it doubtful whether a contract respecting one [*370] subject-matter maybe construed to have relation * to, and may be enforced as comprising, another subject, not within the intent of the parties. Goods, the property of the plaintiff, were expected, and these were insured. No goods of that description were shipped; and although goods of another description, the property of other persons, were shipped, and in which the plaintiff might have acquired a special interest and control, yet of these the plaintiff had no knowledge ; nor had he any intention to insure them, either for the shippers or on his own account. Whether this policy might be construed an insurance for the benefit of Winchester, Howard, & Co., if their interest had been known and disclosed, and there had been an intention to insure it, — or for the plaintiff's interest, by a security of his demands against them, or of his commissions upon their consignment, if that interest had been contemplated by the parties, — are questions not necessary to be determined in this case; because the statement of it effectually negatives any intention of the parties to apply their contract to either of those purposes.
A right to change, in this manner, the application of a contract, if it exists, must be reciprocal between the contracting parties. If the plaintiff is entitled to recover a loss upon this insurance, then, although there had been no loss, and the vessel had pursued her voyage and arrived safely, the defendant would have been entitled to retain the premium paid him by the plaintiff in the expectation of goods which were never shipped. But it is every day's experience that premiums are not retained under these circumstances. Among the adjudged cases to this point may be cited that of Martin vs. Sitwell, which was a decision at common law before the statute of 19 G. 2, c. 37. In that case B. had effected a policy in the name of Marlin, to insure the goods in a certain vessel; and when it was discovered afterwards that M. had no goods in the vessel, and therefore that the policy was void, M. recovered back the premium which had been paid to Sitioell for his insurance.
* An insurance upon property is a contract of indem- [ * 371 ] nity; but in this case, the damage which happened to the goods of Winchester, Howard, 8f Co., shipped for their account and risk, is no loss to the plaintiff". His demands against them are not impaired by this consignment, or by the loss of it. For though a consignee, who has given a credit upon a consignment, and with a special reference to it, may insure in his own name, yet a gen» eral creditor may not, according to the reasoning of Justice Butter in the case of Wolf & Al. vs. Horncastle.
And as to any other profits of this consignment, besides that no interest of that kind was contemplated by the parties in making this insurance, it would be going beyond any case that has been cited, or that I know of, to say that a profit depending upon the will of another, and to arise from effects not in the control of the party, might be insured to him upon these distant expectations.
Upon the whole, our opinion is that the plaintiff is not entitled to recover upon this policy for .the loss which has been proved. If there is a count for a return premium, the plaintiff is entitled tc that, this being a contract not made in contravention of the law, but by a mistake in the party who is understood to have paid the premium.
Note. — No judgment having been entered at March term', at the July adjournment, (there being a count for money had and received,) Prescott moved that full costs should be taxed for the. plaintiff, although the return premium was no more than nine dollars, upon the ground that he had " a reasonable expectation of recovering more than four pounds."
Jackson suggested that, the plaintiff having failed in his principal demand, it would be but equitable that the defendant should recover his costs, as the party prevailing. This demand of a return of the premium has never been resisted by the defendant. In fact, it was essential to his defence against the plaintiff's demand for a loss, to maintain his claim to the premium. Jackson also observed that the " reasonable expectation" *in the stat- [ *372 ] ute relates to matters of fact, as where a defendant files his account as a set-off, or where, from evidence unexpectedly produced, the plaintiff's judgment is reduced below four pounds, — and the statute has never been considered as providing for the case of a mistake in the law.
By the Court.
Let one fourth of the damage be taxed as costs,
Snow. 156, cited in Park, 368, and in Marshall, 99.
1 Bos. & Pul. 316.
Marsh. 88, 89, 92. — See Camden & Al. vs. Anderson, 5 Term R. 709.
Conway vs. Gray, 10 East, 536. — Conway vs. Forbes, 10 East, 539. — Donatt vs. Ins. Co. N. A. 4 Dall. 463. — Campbell & Al. vs. Innes, 4 B. & Ald. 423.
Statute of Limitations, February 13, 1787.