Case Name: William Nelson & others vs. The Suffolk Insurance Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1851-10
Citations: 8 Cush. 477
Docket Number: 
Parties: William Nelson & others vs. The Suffolk Insurance Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 62
Pages: 477–505

Head Matter:
William Nelson & others vs. The Suffolk Insurance Company.
Underwriters, insuring a vessel against perils of the sea, are bound to pay the assured the amount paid by him to the owners of another vessel for damages suffered in a collision with the vessel insured, occasioned by the negligence of the master and crew of the latter.
This was an action of assumpsit on a policy of insurance, dated the 24th of December, 1846, whereby the defendants insured the plaintiffs ten thousand'dollars upon their ship, the Isaac Allerton, for one year, from the 16th day of the same December, at noon, against the perils of the sea, and the other customary perils. The policy contained a stipulation, that “ in case of any loss or misfortune, it shall be lawful for the insured, their factors, servants, and assigns, to sue, labor and travel for, in and about the defence, safeguard and recovery of the said ship, or any part thereof, without prejudice to this insurance, to the charges whereof the said insurance company will contribute, in proportion as the sum insured is to the whole sum at risk.”
The case was submitted to the court upon the following statement of facts: “ The Isaac Allerton, being seaworthy and properly manned and equipped, sailed from New Orleans to Liverpool, with a cargo of cotton and cobalt, under the protection of the policy, on the 18th of September, 1847; and during the voyage, on the 10th of November, 1847, about five o’clock in the morning, came in collision with a British steamer, called the Queen Victoria, in which both vessels suffered much damage.
“ The ship subsequently arrived in Liverpool, and proceedings were commenced against her in the English court of admiralty in behalf of the owners of the steamer for damage done to her, and the vessel arrested, which was afterwards discharged on the owner’s giving sufficient security. A libel was also instituted for damages in behalf of the owners of the ship against the steamer. Upon a hearing of the causea the court of admiralty ordered the libel against the steamer to be dismissed with costs. for the respondents; and pro» nounced for damages and costs in favor of the owners of the steamer against the owners of the ship; which costs and damages, amounting to the sum of £2,500, or thereabouts, the plaintiffs were obliged to pay. The defendants have paid their proportion of the expenses of repairing the damage suffered by the ship. The records of the proceedings in the court of admiralty are made a part of the case, and the court are to draw all just inferences of law and fact therefrom.
“ If, upon this statement and the inferences to be drawn, the court shall be of opinion that the plaintiffs are entitled to recover, the case shall be sent to an assessor, (unless the parties agree on the damages,) and judgment entered for the amount due, with costs; otherwise, the defendants are to recover costs.”
The records of the proceedings in the court of admiralty are not material to the understanding of the case.
The case was argued in writing after the last term.
F. C. Loring, for the plaintiffs.
It is a necessary inference from the fact, that the plaintiffs’ ship was condemned in damages in the suit in admiralty, that the collision was caused by negligence in the navigation of the ship. It is well settled that the insurers are liable for losses by perils insured against, although remotely caused by the negligence of the master or crew. And the defendants do not controvert this, they having in fact paid the expense of the repairs required by this vessel in consequence of the collision. But the plaintiffs have also, in consequence of the collision, been obliged, by the decree in admiralty, to pay the damage suffered by the other vessel, with costs ; and the sums so paid, together with the expenses of defending that action and of prosecuting a cross action for damages against the other vessel, are sought to be recovered in this suit.
1. The collision being caused by fault or negligence on the part of the plaintiffs’ vessel, the vessel and the plaintiffs became instantly liable to the owners of the other vessel for the amount of the damage so done; and they thereby suffered a ’.oss from a peril insured against, namely, collision, to the amount of such claim for damage. By the maritime law, in such case, the liability of the offending vessel is primary, and that of the owners secondary, and limited to the value of the vessel and freight. The Rebecca, Ware, 198. And such is the law of this State. Rev. Sts. c. 32, § 1. This liability attaches instantly to the offending vessel, constitutes a lien upon her, to that extent diminishes her value, and is as real and tangible a damage to her and her owners as the expenses of repairing her own- damages. This loss happens at the same time and is produced by the same cause as the bodily damage to the offending vessel; both are caused by a peril insured against, namely, collision; both are attributable to negligence in her navigation; both produce a damage or diminution in her value. How then can any discrimination be made between the damages to the offending vessel in body, and those inflicted upon her by the liability incurred to the suffering vessel ? It is admitted, that the fact of there having been negligence will not exempt the insurers from one part of the loss; why should it then from the other ? This question has been elaborately discussed before the district and circuit courts of the United States, for this district, and before the supreme court of the United States, and decided in favor of the plaintiffs; which renders a more thorough discussion unnecessary. Peters v. Warren Ins. Co. 3 Sumner, 389, and 14 Pet. 99; Hale v. Washington Ins. Co. 2 Story R. 176. If the case were reversed, and the plaintiffs’ vessel had suffered from the collision by reason of fault on the part of the steamer, it would not be questioned that the plaintiffs’ insurer's were bound to indemnify them. If then the insurers are liable for losses remotely owing to the negligence of the crew of another vessel, there seems to be no reason why they should not be ¿able for losses owing, in like manner, to the negligence of he plaintiffs’ crew; it being admitted, that the vessel was furnished with a competent crew in the first instance.
2. The plaintiffs are also entitled to recover in this action their expenses incurred in defending the suit in admiralty, including costs; and also the expenses of bringing the cross suit; there being no evidence of bad faith in defending the one or bringing the other. This claim rests upon the ground already presented, and also on the express stipulation in. the policy. If the plaintiffs had prevailed, their success would have enured to the benefit of the insurers; and having been unsuccessful, the insurers are bound in equity, as well as by their contract, to bear the expenses.
B. R. Curtis, for the defendants.
The plaintiffs say that another vessel was injured through the negligence of the officers and crew of their vessel; that the marine law considers such injury to be a wrong, for which damages are recoverable, and gives a lien on the vessel insured as a security for these damages and the costs of suit; and so that their vessel has met with a loss by a peril of the sea to the extent of those damages and costs, which the marine law has adjudged to be payable by reason of that wrong; that these damages and costs, being a lien on the vessel insured, operate as a charge upon and a deduction from her value, which deduction or charge arises from the peril insured against, and so must be paid by the insurers.
A policy on a vessel insures that particular vessel. In fixing the amount of the premium and determining what sum shall be put at risk, the underwriter is materially influenced by the age, size and strength of the vessel which is the subject of the policy. These he has the means of knowing; and, guided by this knowledge, he can judge' whether he will take or decline the risk. But the claim made by the plaintiffs introduces into the contract another vessel about which the underwriter had no means of obtaining any knowledge, but which he is nevertheless to stand as insurer of against the peril of collision from negligence. By force of this law, therefore, if it exist,, the underwriter is made liable as insurer of a vessel which he never saw, and must pay somewhat in proportion to the age and weakness of such unknown vessel.
Again; when a vessel has been injured by a collision produced by the negligence of those managing another vessel, the owner of the vessel injured may seek his remedy, either by action against the master, at common law or in the admiralty ; or by action against the owner in either of those courts; or by proceeding in rem against the vessel negligently navigated. If he adopts either of the first two of these three remedies, nothing falls on the vessel; there is no diminution of its value, and no claim on the underwriters. So that it depends on the remedy adopted by the injured party, whether or not the underwriters shall pay; although the.contract, and every fact connected with or causing or accompanying the disaster, remains the same. And the amount of the liability so incurred may be very great, and may be affected by the fact whether the laws of the country where the injury takes place give a remedy in rem, and thus a new element of uncertainty may be introduced.
The doctrine contended for by the plaintiffs has a far more extensive application than merely to cases of collision. For every injury suffered by reason of the negligent navigation of a vessel, there is a remedy in rem against the vessel itself; if damages are assessed, they are a charge upon the vessel and diminish its value; if the proximate cause of the damage be a peril insured against, it would seem that the underwriters on the vessel must make good the loss. For instances of the extent to which the liability of the underwriter might be carried, see Georgia Ins. & Trust Co. v. Dawson, 2 Gill, 365; The Reeside, 2 Sumner, 567.
The law is now settled, that if a peril insured against is the proximate cause of the loss the underwriters must pay, although the peril caused the damage only by negligence of the master and mariners. But the doctrine contended for passes far beyond this, and imposes on the underwriters on the vessel all losses to the cargo, to other vessels and other cargoes, arising from what is deemed a peril of the sea, provided there was negligence amounting to a tort, and provided the party injured elect so to proceed as to charge his damages on the vessel insured.
There must be such negligence as to amount to a tort, and thus constitute what in the marine law is denominated a cause of damage. And this consideration furnishes a solution of the whole difficulty, and affords the means of detecting the fallacy in the plaintiffs’ argument. To enable the plaintiffs to recover, a peril insured against must be the proximate cause of the loss. The loss is the diminution of the value of the vessel insured, by reason of the lien thereon for the amount of the damage done to the other vessel. To bring about such diminution of value, three things must be present: damage; negligence amounting to a tort; and the marine law which fixes and enforces the lien for such a tort. But in considering what is the proximate cause of the loss, we are to look, not at the law, which prescribes the consequences of acts and events, but at the acts and events themselves; so that we nave remaining only the damage and the tortious negligence.
Now it is clear that the damage is not the cause of this loss; always remembering that this loss is the diminution of the value of the vessel insured, to the extent of the injury done to the other vessel. The damage done to the other vessel is the measure of this loss; but its cause is the tortious negligence. Without that, it would not be suffered; by reason of that, it is suffered. If the collision took place in consequence of the negligent navigation of the other vessel, this loss would have rested where it fell. It is imposed on the vessel insured solely in consequence of the negligence of those navigating her. The usual course of trial in such cases may illustrate this. The judge in admiralty ordinarily first tries the question whether there was negligence, and if he finds that there was, the amount of damage is generally referred to an assessor or agreed upon by the parties. When he has found the negligence, he has found the cause of this loss, and afterwards it is ascertained what the extent and measure of the loss are.
The loss in this case is, damages for a tort, and necessarily the tort is the cause of those damages. So that the plaintiff, in order to maintain this action, must maintain not only that negligence, producing the peril insured against, does not prevent the insured from recovering, but that when negligence causes the very loss-in question, he may still recover.
It may be said that collision is a peril of the sea, and that collision is the proximate causé of the loss in this case. The defendants deny this. If the court of admiralty had found a collision, and nothing else, this loss would not have been imposed on the vessel insured. But that court goes further, and finds negligence, and by force of that it is so imposed. IIow then can it be said that the collision is the cause of this loss ?
It is argued that the defendants, by making good the damage suffered in the collision by the vessel insured, have admitted the principle upon which the plaintiffs’ claim rests. So far from this, the case in which that payment was made makes clear the unsoundness of the plaintiffs’ claim. The defendants insured the vessel which was injured by the collision. Collision is one of the perils within the policy; and it is no reason for not paying under the policy that the peril which was the proximate cause of the loss was superinduced by negligence. But here, the loss falls on a subject not insured by the policy. It-is transferred to and placed upon the subject insured, not by reason of any peril insured against, but solely in consequence of the tortious negligence of the servants of the owner of the vessel insured. How then can it be said that a peril insured against is the proximate cause of this loss ?
The case of Peters v. Warren Ins. Co. 14 Pet. 99, certainly does not decide this case. It may have been correctly decided in that case, that the loss in question was a direct and immediate consequence of a peril insured against; for there the cause of the charge on the vessel insured was the collision. Here it is the tortious negligence. It must be admitted, however, that the weight of that authority is somewhat diminished by the fact, that the case of De Vaux v. Salvador, 4 Ad. & El. 420, is diametrically opposed to it.
The case of Hale v. Washington Ins. Co. 2 Story R. 176, is in point for the plaintiffs. I was of counsel for the respondents in that case, and should have advised an appeal, if the sum in dispute would have allowed it. It is true, as stated by Story, J., on page 190, that “ we look to the origin of the loss. If it be a peril insured against, all the incidents attached thereto by law, as necessary or natural incidents, become a part of the loss.” But the law does not attach this charge for damages to the collision. The law goes behind the collision, examines its cause, finds it to be negligence, and to that attaches this charge, as a consequence. The law does not attach this charge to a peril of the sea, the collision, but to what caused the collision, negligence. So that the learned judge, while he intended to fix on the origin or cause of the loss, really fixed on what was not its origin, but only on one of the consequences. That he overlooked the true distinction, appears from his language: “ Unless the collision had taken place, the owner would have incurred no responsibility for damages. It did take place, and he became chargeable therefor,” &c. 2 Story R. 189. Here is the fallacy. He did not become chargeable “ therefor,” that is, for the collision; but for the negligence which caused the collision; and surely this negligence is not a peril insured against. With the exception of Hale v. Washington Ins. Co. no authority can- be found tending to support the plaintiffs’ claim; and the defendants, in order to show that most approved foreign writers on maritime law hold the opposite doctrine, refer to the citations of the respondent’s counsel in that case. 2 Story R. 179, 180.
The claim for the costs and expenses of the suit against the steamer cannot be passed upon by this court, without referring the case to an assessor to inquire into the circumstances. And when the main question is determined, this claim may probably be adjusted by the parties.
F. C. Loring, in reply.
The plaintiffs do not rely on the fact that there is a lien in rem for the damage by collision, as the foundation of their claim ; but would contend that their claim was equally good if no remedy in rem existed. Its existence, however, does not tend to diminish the force of their argument, and its obvious operation, in creating a lien upon and diminishing the value of the vessel insured, is the most apt and obvious illustration of the loss which the plaintiffs have suffered by the collision, and for which they seek indemnity, The liability of the insurers does not depend on the form of remedy chosen by the suffering party.
The defendants have agreed to indemnify the plaintiffs against any loss which they, as owners of the vessel insured, may suffer by or through the operation of certain perils, of which collision is one; and it is upon this ground, and not because of the existence of a remedy in rem, that they are liable. See 2 Story R. 182, 189. The loss which may be suffered in case of collision may be more or less, as one vessel or the other or neither is in fault, and the amount which the defendants may have to pay will vary accordingly; but for the immediate consequences of the happening of that peril, so far as the plaintiffs are losers thereby, the defendants are liable to indemnify them, without reference to the question whether the cause of the collision was negligence in either vessel. The defendants cannot go beyond the proximate cause, collision, and defend themselves by showing negligence as the remote cause.
It is suggested that insurers, in fixing the premium, regard the age, size and strength of a vessel, which they cannot do if they are made insurers of vessels with which the vessel insured may come into collision. But they are not made such insurers in a proper sense. And besides; there are risks insured against, into which such calculations do not enter, such as fire, capture, arrest, liability to contribute in general average, &c. The fact suggested is therefore immaterial.
The extent of the liability which will be imposed upon underwriters, if this action is maintained, is hardly a good argument, if the claim is well founded. And this liability never arises, unless a peril insured against occurs; and then it is limited, first, by the sum insured; and secondly, by the value of the vessel at the time of the loss. Besides; by the theory of the law, the master and crew, by whose negligence the accident happens, are liable to the owners for the consequences ; and the insurers, on paying the loss are subrogated to this claim.
The objection that, as the plaintiffs’ claim depends upon a lien in rem, the liability of the insurers will depend on the local ‘law, if well grounded, would have no weight. The insurers, by the contract of insurance, take the risk of the laws of the various countries which the vessel visits, so far as they affect the subject insured and the perils insured against. See Loring v. Neptune Ins. Co. 20 Pick. 411.
It is not essential, in order to make a vessel liable for damages occasioned by a collision, that there should be “ tortious negligence;” it is enough if there be an error of judgment. It is true, as suggested for the defendants, that there must be a technical tort in order to charge one vessel with damages in a cause of collision, between the owners of the two vessels, and that the question in such case is whether there was negligence or error in the navigation of that vessel. But as between the owners of that vessel and her insurers, the only question is, whether a peril insured against has occurred; if it has, the insurers are bound to indemnify the owners against the loss thereby occasioned, and are not permitted to show in defence the existence of a technical tort. By keeping in view the difference between the liabilities of vessels and their owners in causes of collision, and of the insurers to the insured in an action on the policy, much of the perplexity, in which this case is apparently involved by the argument for the defendants, will be removed.
From what has been said, it seems plain that the liability of the insurers to make good the loss caused by a collision does not depend at all upon the cause of the accident, or the degree of negligence, if any, which caused it. The question of cause is material' to them only so far as it affects the amount of the loss, and not their liability; as they have engaged to indemnify the insured against the immediate consequences of a peril, even when brought about by negligence, they must do so to the extent of their engagement, be the remote cause what it may. And this conclusion is consistent with the principles of the law of insurance. The contract of insurance is a contract of indemnity against certain perils; and the insurer agrees that if the master and crew are competent in the first instance, he will not excuse himself because they may be negligent, and in consequence a loss happen from one of those perils. One of these perils is collision; which may happen by bad judgment or negligence on the part of the master and crew of the vessel insured. If so, then in addition to the mere damage to the ship, there is a liability to pay damages to the other vessel; and this is as much a part of the loss and as direct a consequence of the occurrence of the peril, as any expenditure for repairs. If the insurer is not liable for it, then insurance is not a contract of indemnity, and there are perils of the seas against which it affords no protection.
If the case of Peters v. Warren Ins. Co. was rightly decided, and the principles of that decision are correct, a decision in favor of the plaintiffs cannot be avoided; in point of principle the two cases are identical. The argument for the defendants on the case of Hale v. Washington Ins. Co. seems to be an attempt to get behind the principle of proximate cause. If it be settled, as the defendants in fact admit, that the insurer is liable for losses from perils insured against, though caused by negligence, then it is not perceived how the application of the principle can be avoided in this case, or with what reason the insurers can divide the loss and say, “ we will pay one part of the loss you have suffered by this collision, although it was caused by the negligence or fault of your master and crew; and we will not pay the other, because it was caused thereby.”

Opinion:
Fletcher, J.
No question is made in regard to the declaration, but it is assumed, that it contains all the material facts in the case; and the particular form of stating the facts cannot affect the principles of law applicable to the case, or the decision of the court, which must be founded on these principles. The defendants having paid their proportion of the expenses of repairing the damage done to the plaintiffs' ship by the collision, the plaintiffs claim, in this suit, the amount of damages and costs paid by them to the owners of the steamer, under the decree of the coiut of admiralty, together with the costs and expenses of defending the suit in that court, and the costs and expenses of prosecuting a cross action for damages against the steamer and her owners.
By the agreement of the parties, all proper inferences from the facts stated are to be drawn by the court; and from the fact, that damages and costs were decreed by the court of admiralty, in favor of the owners of the steamer against the owners of the ship, it must be inferred that there was negligence in the navigation of the plaintiffs' ship. But the decree itself is in the most general form; the judge " pronounced for the damage proceeded for in this cause," without stating the negligence or any thing else as the ground of the decision, though negligence in navigating the plaintiffs' ship was alleged in the libel.
But it is the well known law of the English courts of admiralty, upon the subject of collision, that where a vessel, which runs another down is alone in fault, in such case and in such case only, the injured party is entitled to entire compensation from the other. The plaintiffs having been compelled by the decree of the court of admiralty to pay the amount of damage done to the steamer, it must be assumed that the charge of negligence in the navigation of the plaintiffs' ship was established. The great prominent question in the case therefore is, whether the defendants, as insurers of the plaintiffs' ship, are bound to indemnify them for the amount they were obliged to pay the owners of the steamer for the damage done to the steamer by the collision, the collision having happened in consequence of the negligence in the navigation of the plaintiffs' ship.
This is certainly a deeply interesting question in a community so largely commercial as our own, and it is highly important that the decision of it should be such, as to carry out and give effect to the intention of the parties, and accomplish the object designed to be accomplished by the useful and beneficent contract of insurance. It does not appear by any evidence in the case whether underwriters have or have not been accustomed heretofore to indemnify persons insured for payments which they have been obliged to make to the owners of other vessels for damage by collision. In the absence of all proof on the subject, conjectures would be useless. It is laid down as law by Emerigon that in cases of collision, where it is impossible to ascertain where the fault really lies, the aggregate damage being in such case equally divided between the two vessels, if the owner of the vessel insured is obliged to pay any thing to the owner of the other vessel, the underwriters are responsible for such payment. Under the English law, where there is no blame imputable to either party in a collision, neither party is Rabie to the other for any damage, and of course, in such case, there can be no claim on underwriters for payment for damage to another vessel. The liabiRty of underwriters for losses from perils insured against, where the perils happened in consequence of negligence in the navigation of the ship insured, has been estabRshed only by the modern decisions. Modern cases only can justly be expected to have arisen under the modern law. Under such circumstances, the idea, that there can be any practical construction of the law in opposition to the plaintiffs' claim in this case, must be whoUy illusory.
New questions under aU the various heads or branches of the law, including those most familiar and best understood, are constantly arising, and, as they arise, must be settled by the court by the appRcation of just principles and analogies. The judicial decisions in England and the United States form a most material and important part of the law of insurance in its present improved state, as a weff defined, symmetrical system. Though a court may not always find in these decisions a precedent directly in point, yet it will rarely fail to find principles and analogies often quite as satisfactory, to the judicial mind, as a precedent. The contract of insurance is pecuRar, relating to large and various interests, including numerous parties, and subject to the influence of various casualties. Such a contract must from its nature unavoidably give rise to many questions and controversies.
By this poRcy the defendants became the insurers for a certain amount on the plaintiffs' ship, and took upon themselves, among other things, the perils of the sea, and engaged to indemnify the plaintiffs for all losses sustained by them by the perils of the sea in the largest import of the terms. While the plaintiffs' ship was saiRng under the protection of this poRcy, she came in collision with a British steamer, by which coUision both the ship and the steamer were damaged. In addition to the cost of repairing their own ship, the plaintiffs have been compelled by a decree of the court of admiralty in England to pay, and have paid to the owners of the steamer the amount of damage done to her by the collision. The defendants have paid the expenses of repairing the plaintiffs' ship, and the plaintiffs seek in this suit principally to recover the amount paid by them to the owners of the steamer, which the defendants refuse to pay, alleging that that was not a loss by the perils of the sea, against which they insured. That collision, whether occasioned by negligence or not, is a peril of the sea, is perfectly well settled, and is not now questioned by the defendants, and they have paid the costs of repairing the damage done to the plaintiffs' ship by the collision.
The plaintiffs allege that the sum, which they had to pay for damage to the steamer, was a loss by a peril of the sea, that is, the collision; but this is denied by the defendants. We are thus led at once to inquire what losses come within the provision of the policy, as losses by the perils of the sea. In ascertaining the cause of a loss in question, in a case of insurance, courts are governed by the well known maxim of the law, in jure non remota causa sed próxima spectatur. This is now the well established rule, and is taken to be in accordance with the intention of the parties to the contract. The contract of insurance must be interpreted according to the true meaning and intention of the parties. This is the great governing principle of the interpretation of such contracts. Every stipulation in the policy is to be construed favorably to the party entitled to its benefit, as it must be presumed that he understood it in its most favorable sense, and that the other party intended he should so understand it. As the contract of insurance is a contract of indemnity to the assured, it is to be liberally construed in his favor. There can be no doubt that the assured intends to obtain the fullest and most ample indemnity, and that the insurer means that he shall understand that his policy affords him that indemnity. The policy therefore should be so construed as to fulfil these inten tions. It is only by such construction that the contract of insurance can accomplish its useful and important purpose, and the commerce of the world be carried on. When the plaintiffs in this case obtained insurance against losses by the perils of the sea, these terms were no doubt understood by them in their largest sense, as covering all losses justly attributable to those perils, and no doubt the defendants intended that they should thus understand and interpret their policy. To carry into effect these intentions, the policy must be construed favorably for the insured, to give them that security, which they believed, and had a right to believe, they had obtained. There should be no subtle reasoning, no shadowy distinctions, no straining of rules to narrow and restrict the operation of the contract so as to defeat the intention of the parties. The parties no doubt took a practical view of the matter and had reference to all possible losses, known and unknown, which might be justly attributable to the perils of the sea, in the broadest import of the words. They acted on no nice distinctions or subtle reasoning. They could not of course foresee and specify the losses, but could only use general terms. " The policy sweeps within its inclosure every peril incident to the voyage, however strange or unexpected, unless there be a special exception. The perils enumerated in the common policy are sufficiently comprehensive to embrace every species of risk, to which ships and goods are exposed from the perils of the sea and all other causes incident to maritime adventure." 3 Kent Com. (6th ed.) 291. The parties no doubt very well knew that there were many losses by the perils of the sea, other than the direct damage to the ship insured. To hold the defendants liable only for the direct damage to the ship insured, would leave the plaintiffs exposed to ruin in various ways, without the protection they intended to obtain and supposed they had obtained under their policy. To give effect to the meaning and intention of the parties therefore, the defendants must be held responsible for all losses justly attributable to the perils of the sea, as well as for the direct damage to the ship itself. Pothier Contrat d' Assurance, § 49, says distinctly, that in his opinion the underwriters are liable not only for the injury done to the subject insured by the perils insured against, but to expenses and charges occasioned by those perils; as the expense of unloading the goods in case of a ship being wrecked by a storm. Mr Justice Story, speaking for the supreme court of the United States, and referring to Pothier and other foreign writers, in Peters v. Warren Ins. Co. 14 Pet. 112, says, " In short, all those learned foreign writers hold the doctrine, that whenever the thing insured becomes by law directly chargeable with any expense, contribution or loss, in consequence of a particular peril, the law treats that peril, for all practical purposes, as the proximate cause of such expense, contribution or loss; and this they hold, not upon any peculiar provision of the French ordinance, but upon the general principles of law applicable to the contract of insurance. In our opinion this is the just sense and true interpretation of the contract." The same learned judge, in Hale v. Washington Ins. Co. 2 Story R. 189, says, " any and every expense borne by and chargeable upon the owner of the thing insured, as a direct and immediate consequence of a peril insured against, is covered by the policy."
This principle is clearly illustrated by the liability of underwriters for a general average loss. A ship is insured against the perils of the sea, a part of the cargo is thrown overboard by reason of a peril of the sea, and the ship and owner become at once chargeable for a proportion of this loss of the cargo, and the underwriter is held bound by the policy to indemnify the owner of the ship for the sum he has to pay to make up the loss of the cargo. Here is no damage to the ship insured, but the sum thus charged upon the owner and ship, for the cargo, is held to be a loss by the perils of the sea for which the underwriter is responsible.
So in case of insurance against capture, the underwriter is liable not only for any damage the ship may have actually sustained by a capture, but also for all necessary expenses, such as salvage, &c. which the assured has been put to for the recovery of his property. Thus it has been determined that the underwriter is liable for a sum of money paid by the. neutral assured to belligerent captors as a comoromise, made bond fide, to prevent the ship being condemned as prize. 2 Arn. Ins. 809, 810. So the liability of underwriters for salvage expenses depends not upon their having engaged to indemnify against them by any express words in the policy, but upon their being made by the law of the land, or the general law maritime, a direct and immediate consequence of perils against which they do insure. 2 Arn. Ins. 846, 847. Reference might be made to many other charges, expenses and losses, distinct from the thing insured, and not mentioned by any express words in the policy, for which the underwriter is liable, but they all depend on the general principle, that where the thing insured becomes by law directly chargeable with any expense, contribution or loss, in consequence of a particular peril, the law treats such peril, for all practical purposes, as the proximate cause of such expense, contribution or loss.
Upon any other principle, policies of insurance, instead of being a protection,would serve but to allure men to then- ruin. Upon this principle,the liability of the defendants for the sum claimed in this suit would seem to be too clear for controversy. To hold that the defendants are not liable in this case, would conflict directly with the doctrine held in the analogous cases, which have been referred to, and thus introduce inconsistency into the law, where consistency and uniformity are most essential.
The plaintiffs' ship, insured by the defendants, came in collision with the British steamer, by which collision the steamer was damaged and eo instanti the plaintiffs and their ship became chargeable by law with the amount of the damage done to the steamer; this damage the plaintiffs have been obliged to pay and have paid and lost, and this loss they now claim under their policy. It was surely the collision which brought the loss on the plaintiffs, the collision did the damage, and that act instantly fastened the loss on the plaintiffs, so that the plaintiffs' loss was the direct and immediate consequence of the collision, which was a peril insured against and for which the defendants are liable.
The defendants admit that they are liable for damage done to the plaintiffs' ship by the collision; but the same collision which damaged the plaintiffs' ship damaged also the steamer, and the loss of the damage of the ship, and the damage of the steamer fell on the plaintiffs in one mass, at the same time and from the same cause. The same peril, the collision, took out of the plaintiffs' pocket, at the same time, the amount of the damage to the ship and the damage to the steamer, as one entire result or consequence. It was precisely the same to the plaintiffs, as if the whole damage had been done to their own ship. To separate this aggregate result of the same peril, acting at the same time, and under precisely the same circumstances, into parts, and hold the defendants answerable for one part, and not for another part, requires a course of reasoning quite too subtle and metaphysical to be useful or safe in dealing with a practical matter like insurance. The parties to the contract can hardly be supposed to have intended to make such a paradoxical distinction. Some examination of the positions maintained in the argument in behalf of the defendants will more fully exhibit the grounds of defence.
It is said, that a policy on a vessel insures that particular vessel; that in fixing the amount of premium, &c. the underwriter is materially influenced by the age, size and strength of the vessel, which is the subject of the policy, and of these he has the means of knowledge, and acts upon that knowledge; but that a claim like that made by the plaintiffs introduces into the contract another vessel, about which the insurer had no means of obtaining any knowledge, but which he is nevertheless to stand as insurer of, against the peril of collision from negligence. This is a fanciful rather than a just view of the subject. It might as well be said, that to hold the underwriter on a vessel liable for the loss of cargo by jettison, was to make him an insurer of the cargo without his knowledge or consent.
A considerable portion of the argument for the defendants assumes that the plaintiffs rely on the fact, that there is a lien in rem for damage by collision, as the foundation of their claim. This portion of the argument.it is not necessary to consider, as the plaintiffs in fact contend that their claim would be equally good if no remedy in rem existed. The owners of the steamer might proceed against the ship or her owners at their pleasure, and it is wholly immaterial as to the liability of the underwriters, which form of remedy might be adopted. In either way the plaintiffs' loss is the same, and their claim.on the underwriters the same. The fact that a lien was created by the collision, and thus reduced the value of the vessel insured,was used to illustrate and enforce the plaintiffs' claim under their policy. The extent of the liability, which, it is said, would be imposed on underwriters if the plaintiffs' claim is sustained, is also insisted on in the argument. Such a consideration cannot change the law. Besides ; the liability of the underwriter cannot of corase be extended beyond the sum insured.
The main ground of defence, however, relied on in the argument is, that there was negligence in the navigation of the plaintiffs' ship ; that without this negligence the. plaintiffs would not have been obliged to pay for the damage done to the steamer; and therefore, that so far as respects the payment for damage to the steamer, the negligence was the proximate cause of the loss, and not the collision. Properly to estimate the force and value of this argument, it is necessary to inquire, who, in case of a loss arising from one of the perils insured against, is responsible for the conduct of the master or mariner in the practical navigation of the vessel.
It seems to have been formerly held, that underwriters were not responsible for losses, which happened in consequence of the negligence of the master or crew in the navigation of the ship. This doctrine would go far to deprive the assured of the benefit and protection of his policy, without any fault of his own, and would greatly lessen, if it did not destroy the usefulness of insurance. Some fault or negligence on the part of the master or mariners enters into almost every case of a loss or damage of a vessel at sea. The danger from such fault or negligence is one of the dangers, which the assured has most reason to apprehend, and against which he most needs and may reasonably expect protection.
Besides; such a doctrine would be sure to involve the assured in perpetual controversies and litigation, in regard to the fact of negligence, whether there was or was not negligence, and what was the degree of the negligence, if any, and whether the loss was, or was not, in consequence of such negligence. These would be difficult and perplexing questions of fact, the decision of which would depend on many contingencies ; thus involving the rights of the assured in ruinous doubts and uncertainties. To avoid such evils and to give effect to the true meaning and intention of the parties, the modern decisions have established a different rule, and one much more in consonance with the principles and purposes of the contract of insurance. The great principle, now well established, is, that if the vessel, the master, officers, crew and equipments are competent and sufficient at the commencement of the voyage, the assured has done all that he contracted to do; he did not guaranty the faithfulness and vigilance of the master and crew, and he is not responsible for their negligence; but for the conduct of the master and mariners, in the practical navigation and management of the vessel, after the commencement of the voyage, the insurers are responsible, provided the actual loss arise from one of the perils insured against, though such peril may have occurred in consequence of the negligence or carelessness of the master and crew.
This rule of law is now perfectly well established, by the decisions in England, by the decisions of the supreme court of the United States, and by the courts of several of the states, and has been adopted by this court, in conformity with the decisions of the supreme court of the United States, that the decisions involving so important a practical principle might be uniform throughout the United States, and in conformity with the rule established in England. Busk v. Royal Exchange Assurance Co. 2 B. & Ald. 73; Walker v. Maitland, 5 B. & Ald. 171; Phillips v. Headlam, 2 B. & Ad. 380; Dixon v. Sadler, 5 M. & W. 405; Patapsco Ins. Co. v. Coulter, 3 Pet. 222; Columbia Ins. Co. v. Lawrence, 10 Pet. 507 ; Waters v. Merchants Louisville Ins. Co. 11 Pet. 213; Copeland v. New England Marine Ins. Co. 2 Met. 432; Perrin v Protection Ins. Co. 11 Ohio, 147; Henderson v. Western M. & F. Ins. Co. 10 Rob. La. R. 164.
This doctrine does not rest on any principle of estoppel, that the defendants cannot go behind the peril to show the negligence, but that, under the circumstances stated, the underwriters are responsible for the negligence of the master and crew; and it is perfectly immaterial whether the fact of negligence is shown by the defendants, or is expressly set out and shown by the plaintiff as a part of his case; the principle remains the same, and the responsibility of the underwriters remains the same, by whichever party or in whatever form the fact of negligence is introduced into the case. When a peril insured against actually happens, all the negligence connected with it is at the risk of the underwriters, and all the consequences of the negligence fall upon them.
In the argument for the defendants, it is attempted to place the payment of the damage done to the steamer upon a different and distinct ground from the damage to the ship insured. It is not perceived that the use of the word tort, instead of negligence, adds any thing to its force. It is said, that the damage to the ship insured was the direct consequence of the collision by itself, and that the collision therefore is the proximate cause of that damage; but that the plaintiffs would not have been obliged to pay the damage to the steamer if there had not been negligence, and that that makes a difference. That is, that the plaintiffs would not have been liable to pay the damage to the steamer if there had not been negligence, and that therefore the. negligence is the proximate cause of the payment. Showing that negligence forms a necessary ingredient in the case falls very far short of showing that it is the proximate cause of the loss. If it follows, from the fact that the plaintiffs would not have been held to pay if there had not been negligence, that the negligence is the proximate cause of the payment, it may be shown, in precisely the same way, that the colisión was the proximate cause. If there had not been a collision, the plaintiffs would not have been liable to pay, and therefore the proximate cause of the payment is the collision. Yet the whole stress of the argument, to show that the negligence was the proximate cause of this loss, rests on the proposition, that if there had not been negligence, the plaintiffs would not have been liable for the damage. Because the negligence was a necessary element in the case, it is attempted to set up the negligence as a distinct, substantive, proximate cause of the loss, putting the collision altogether out of sight, as quite unimportant.
To test the strength of the argument, it may be drawn out and stated more fully in the following general form: If the peril of the sea which operated in a given case was not of itself sufficient to occasion, and did not in and by itself occasion the loss claimed, if it depended upon the cause of that peril whether the loss claimed would follow it, and therefore a particular cause of the peril is essential" to be shown by the assured, then we must look beyond the peril to its cause to ascertain the efficient cause of the loss. It is believed that the above form of stating the argument sets out its full force and scope. A little change of the phraseology of the argument, so as to apply it to the present case, but without affecting at all its force, will show its" entire fallacy. Thus, if the negligence in this case was not of itself sufficient to occasion, and did not in and by itself occasion the loss claimed, if it depended upon the consequence of the negligence, that is the collision, whether the loss claimed would follow it, and therefore a particular consequence of the negligence is essential to be shown by the assured, then we must look beyond the negligence to its consequence, the collision,, to ascertain the efficient cause of the loss. This mode of reasoning, in whatever form it may be put, must prove, if it prove any thing, that there are two proximate causes; because there must always be both negligence and a collision; neither, in the absence of the other, would occasion the loss. This proves too much to be sound reasoning. Besides, this mode of reasoning directly begs the question. It assumes, at the outset, that the collision does not occasion the loss, and then jumps to the conclusion, that because the collision does not occasion the loss, the negligence does. But the true practical view of the subject, free from over-refinement and subtlety, is very clear and intelligible. By the admiralty law, the owner of a vessel may or may not be liable for damage done by his vessel by a collision, according to the circumstances under which the collision takes place. If the collision happen in the absence of negligence, then the owner is not liable; if it happen under circumstances of negligence or by reason of negligence, then he is liable, liable for the collision and damage done by the collision, as the proximate cause. The negligence is an element in the case, but not the proximate cause of the loss. The negligence must of necessity be more remote than the collision; the collision follows as 1he consequence of the negligence; and the payment for the damage to the other vessel follows as the consequence of the collision, as its proximate cause. The payment is attached to the damage by the collision, and is commensurate with that damage ; it is not attached to the negligence, nor is it measured by the negligence. The negligence cannot be set up as a distinct, substantive, proximate cause of the payment, upon any other ground than that the payment was a penalty for the negligence; and if so, the penalty should be measured by the negligence, and exacted even though there should be no damage from the collision. But surely there was no penalty to be measured by the negligence, but the payment of the actual, carefully ascertained, damage caused by the collision, which is of course the proximate cause of the payment.
There are cases which proceed upon the ground, that the loss happened wholly from negligence, in the absence of any peril insured against, in which cases the underwriters, of course, are not held responsible. Such was the case of Hazard v. N. E. Marine Ins. Co. 1 Sumner, 218, where the loss was held to be from negligence, without any peril within the policy. There are other similar cases. It seems designed by the argument for the defendants, to place the present case on the same ground with those cases where the underwriters have been held not to be answerable for the loss, for the reason that it happened from negligence, without any peril within the policy. But this case does not come within that class. Here was clearly a peril insured against; and although there was negligence, yet, as the law now stands, the underwriters take the risk of such negligence, and are answerable for the consequences of the peril as the proximate cause of the loss, notwithstanding the negligence, and that liability for negligence extends to the payment for damage to the steamer, as well as to the direct damage to the ship; upon perfectly well established principles, therefore, it seems plain that the underwriters are responsible for the loss claimed in this case.
But we are referred by the argument for the defendants to certain approved miters on maritime law abroad, who hold, it is said, an opposite doctrine. We have made some examination of those authors.
In France, it has been long well established, that under-miters are not liable for any loss arising from the misconduct or negligence of the master or crew of the vessel insured, and of course are not liable for any injury done by a collision occasioned by the fault of the master or crew of the ship insured. Pothier Contrat d'Assurance, § 50; Emerigon, c. 12, § 14; Boucher Droit Mar. 1501,1502; Code de Comm. § 213; 3 Pardessus Droit Comm. § 772.
This is directly opposed to both the English and American law, as now held. But even in France, by special provision in the policy, the undermiters may assume the risk of the fraudulent misconduct or negligence of the master and crew, the stipulation not being illegal. Pothier Contrat d'Assurance, § 65; Code de Comm. § 213. The French law, then, makes no difference between injuries done by a collision to the ship insured, owing to the negligence of the master or crew, and injuries done to the other ship. The undermiter cannot, under the common policy, be made to pay for either. But in case of a policy in France, so expressed as to protect against the consequences of the negligence of the master and men, I presume the undermiters would be held to pay in a case of collision, not only the expense of repairing the ship insured, but whatever sum her owners had to pay to the owners of the other vessel for damage done by the collision. I come to this conclusion from the consideration, that the French law does not limit the liability of the underwriters to paying for damage to the ship insured, but extends it to the injury done to another vessel by collision. In such case, when it is impossible to ascertain where the fault really lies, the loss being equally divided between the two vessels, if the owner of the ship insured has, in this partition, to pay any thing to the owners of the other vessel, the underwriters are required to pay the owners of the vessel insured, not the expenses of repairing her merely, but whatever sum, in addition, the owner is required to pay toward repairing the other vessel. Emerigon, c. 12, § 14; 4 Boulay Paty, Droit Mar. (ed. 1823) 16.
In France, then, the principle is established, that an underwriter may have to pay for repairing an injury to a subject which he does not insure, in a case where the expense becomes a charge on the subject insured and its owner, arising out of a peril insured against. Indeed this is no more than the long established principle of general average, where the underwriter has to pay for a portion of the damage to a subject not insured, on the same ground that it is a charge on the subject insured and its owner, arising out of a peril covered by the policy.
So far as the argument for the defendants derives any support from the French law, that law is in direct conflict with our own, and cannot therefore have any force in this case.
But there are some adjudged cases which have a bearing on the present case, and must now be considered.
The case of De Vaux v. Salvador, 4 Ad. & El. 420, appears to have been a case of fault on both sides; each ship was damaged, and each ship had to bear half of the aggregate loss. In the settlement, the ship insured had to pay a balance to the other ship, and that suit was brought to recover of the underwriter the sum thus paid, and it was held, that the underwriter was not liable. Though that was a case of negligence, no such position in regard to negligence was taken as is taken in this case. The case was very summarily disposed of by the court as a new case, with very little reference to principles. It was said that the payment was made under the rule of the court of admiralty; that it grew out " of an arbitrary provision in the law of nations, from views of general expediency, not as dictated by natural justice, nor (possibly) quite consistent with it." It is difficult to see how a rule, that in case of mutual fault, where it is impossible to measure accurately the effect of the fault of each party, the whole loss shall be borne equally by them, can be said to be inconsistent with natural justice. It was no doubt intended to be a just and equitable rule, and it would not be easy to prescribe a better or more equitable one. This payment was then compared to a penalty incurred by the contravention of the revenue laws of any particular state, rendered inevitable by perils insured against. The case supposed is quite too uncertain in itself, and quite too unlike the case in hand, to throw any light upon it. But this is in substance the whole explanation given of the decision, so far as relates to the question now under consideration. It is not necessary further to examine that case, as we consider its authority substantially overcome by the decision of the supreme court of the United States in the case of Peters v. Warren Ins. Co. 14 Pet. 99. That was a case where the plaintiffs' vessel came in collision with another vessel wholly by accident, and without any fault on either side; both vessels suffered damage, and by the marine law of Hamburgh, to which the vessels were subject, each vessel had to bear one half of the whole aggregate loss of both vessels. Under that law, the plaintiffs had to pay an amount to the owners of the other vessel, they being the greatest sufferers, and that action was brought to recover the amount, so paid, of the underwriters on the plaintiffs' vessel, and it was decided that the plaintiffs were entitled to recover the sum claimed. The case was fully argued, and a thorough and elaborate opinion delivered by the court. The decision did not depend at all on the fact, that there was no fault or negligence on either side, but was placed upon much broader ground. The whole argument of the court went to show, that a claim for a payment made to another vessel for damage done by collision stood upon precisely the same ground as a claim for damages done directly to the vessel insured. The strong and conclusive reasoning of the court went to maintain the general proposition, that the collision was, upon general principles, and in all cases where the insured became liable to pay for damages done to another vessel, as much the proximate cause of such payments as of the immediate damage to the ship insured.
That that decision was intended to include, and does include, a case like the present, in which there is negligence in the navigation, is perfectly manifest. That the court did not consider that the fact, that the owner was obliged to make the payment by reason of there having been negligence in the navigation of his ship, would take a case out of the operation of their decision, is made certain by the fact, that they refer to the case of De Vaux v. Salvador, which was a case of negligence, as in direct conflict with their own decision. If a case in which there was negligence did not come within the scope of the decision in Peters v. Warren Ins. Co. then the court in that case would, no doubt, have treated the case of De Vaux v. Salvador, which was a case of negligence, as not in conflict with their decision, but as distinguished from the case before them, and standing on different ground. But there is no intimation that the two decisions can be reconciled; that they stand upon different principles; that the negligence in the case of De Vaux v. Salvador distinguished it from the case of Peters v. Warren Ins. Co., in which there was no negligence; but the two cases aré treated as in conflict, and the court dissent entirely from the decision in De Vaux v. Salvador, as " in opposition to the analogies furnished by other acknowleged doctrines in the law of insurance." But to put this matter beyond all controversy, Mr Justice Story, in the case of Hale v. Washington Ins. Co. 2 Story R. 176, expressly refers to the case of Peters v. Warren Ins. Co., as a case in point in support of a claim for a payment to which the party had been subjected by reason of negligence in the navigation of his ship. To hold now, that the case of Peters v. Warren Ins. Co. is not a case in point to support a claim like the present, to recover the amount which the plaintiffs were comoelled to pay for damage by collision which happened in con sequence of the negligence of the master and crew in the navigation of his ship, would be a direct renunciation of the principle upon which the decision in that case was founded, and would be in fact saying, that Mr Justice Story did not correctly comprehend the scope of his own opinion, and that that case does not mean what he supposed it meant. Such a position must be wholly untenable.
The case of Hale v. Washington Ins. Co. 2 Story R. 176, already referred to, is also directly in point in support of the plaintiffs' claim. In that case, the plaintiff sought to recover of the underwriters on his ship the amount he had been compelled to pay, under the rule in admiralty, for damage done to another vessel by a collision occasioned by the fault or mistake of the mate and crew of his own ship, and it was adjudged that he was entitled to recover the sum claimed. That case is like the present in all its material facts, and supports with all its weight the plaintiffs' claim. The same learned counsel appeared for the defendants in that case who appears for the defendants in this case, and endeavored, in that case as in this, to show that the negligence, and not the collision, was the proximate cause of the loss; but the argument failed to convince the court. He endeavored also to distinguish the case of Peters v. Warren Ins. Co. from the case then in hearing, as he has endeavored to distinguish it from this case; but the distinction was not admitted by the court. That case was thoroughly examined by the court, and an elaborate opinion was delivered, the reasoning of which commands the entire assent of this court; and the great learning and high judicial character of the judge, his familiarity with the law of insurance, and his large judicial experience in administering that law, give to his decision great weight and authority.
The present case, therefore, has in its support both the cases of Peters v. Warren Ins Co. and Hale v. Washington Ins. Co., and this court sees no reason to disturb the law as settled by those decisions.
The circuit court of the United States for the Southern District of New York, in a recent case, have followed these decisions; Sherwood v. General Mut. Ins. Co. 1 Blatchf. Rep 251 ; so that all the decisions upon this subject in this country are the same way. [See also Mathews v. Howard Ins. Co. 13 Barb. 234.]
In our judgment, both upon principle and authority, the proximate cause of the loss, which the plaintiffs sustained by being obliged to pay the amount of damage done to the steamer, was the collision; and this was a peril, against which the defendants insured, and for which they are responsible.
Unless the parties agree on the amount for which judgment shall be entered, the case will be sent to an assessor.
After this opinion was announced, judgment was entered by consent for the plaintiffs for the whole amount claimed.
The judgment in that case was reversed in the supreme court of the United States, at the December term, 1852, Curtis. J. delivering the opinion. 14 How. 351.