Court Opinion

ID: 6232646
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:25:26.884503+00
Date Added: 2024-06-11T08:57:55.711816
License: Public Domain

The opinion of the court was delivered, by
Woodward, C. J.
The action is upon the following stipulation in the charter-party: — “ Captain Padelford guarantees that the cargo shall insure at as low a rate as in an A 2 vessel, any extra premium to be deducted from the freight.”
We do not think it necessary to decide the question that was much mooted in the argument, whether the captain of a vessel lying in a foreign port so represents the owners that he may bind them by a contract of insurance in respect of the cargo, because we agree with the learned judge of the District Court that, upon a fair interpretation of the charter-party, Captain Padelford did not mean to bind the defendants personally, but only to bind the freight, over which he undoubtedly had full power. The contract was, that the cargo should insure at a rate not higher than if it were in an A 2 vessel, and if any excess over that rate had to be paid, it should be deducted from the freight. That is, Captain Padelford would receive so much less freight as should be equal to that excess. This, we think, was clearly the effect and meaning of the stipulation.
The cargo did not insure at the stipulated rate, and an extra premium had to be paid, which being deducted from the freight, the shippers have no claim upon the owners of the vessel. If it were admitted that a captain might bind the owners by a contract of insurance (a point we do not mean to affirm), a guaranty of a *445rate of insurance with an express appointment of the mode of repaying any excess over that rate, cannot be treated as an insurance of the cargo. At most it is only a guaranty of the premium. If the owners, or the captain as their agent, kept the premium down to the specified standard, either by finding underwriters at that rate, or deducting the excess from the freight, the contract was performed and gone, and could not possibly ground an action for loss of cargo.
But it is said no freight was earned, and therefore no deduction was possible. Be it so; but this circumstance cannot alter the nature and scope of the contract. The owners are not liable for the cargo, because they would have been only entitled to a diminished freight. That would be a palpable non sequitur.
Nor can one contract be substituted for another, or the contract that was made expanded into an insurance, merely because the cargo was lost. The nature and extent of the contract are to be gathered from the terms employed to express it, rather than from the disastrous consequences that ensued from it.
On the whole, we see no ground for the errors assigned, and the judgment is affirmed.