Court Opinion

ID: 3616781
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:59:40.614642+00
Date Added: 2024-06-11T13:46:58.418390
License: Public Domain

The present action is brought upon a policy of insurance upon cotton, from a point in the interior of the State of Georgia to a port in Great Britain. The policy contained a clause insuring against losses occasioned by the *Page 544 
"barratry of the master and mariners." Under its terms, 202 bales of cotton were shipped at Augusta, Georgia, to Charleston, S.C., in October, 1866. In November, on arrival at Charleston, 125 bales were transferred to the bark Victoria for Liverpool.
There was a clause in the policy to the effect that "all approved indorsements on the pass-book given by this company under this policy are to apply in all respects to this policy, the same as if indorsed herein, and not otherwise."
The entry in the pass-book was as follows: "By S.C.R.R., from Augusta to Charleston; thence to Liverpool; bark Victoria." The bill of lading, signed by the master, was put in evidence, and is a clean bill of lading, and not for goods stowed on deck. Ninety bales of the cotton were, however, stowed on deck by the master, and without the knowledge or assent of the plaintiffs or their agents. The agent of the shipowner, Thaddeus Street, having discovered that the master was carrying cotton on deck opposed it, and wanted him to send it on another vessel. He stated to him, substantially, what responsibility he was assuming; that as he had signed bills of lading he was bound to carry the cotton under deck, and that the insurance taken on a clean bill of lading would not cover the cotton on deck. The master took the cotton on deck notwithstanding the objection of the witness. Mr. Street (the cotton having been so shipped) urged the master to write to the agent of the shipowners at London to insure eighty bales of cotton "on deck." The letter was written by the supercargo by advice of Mr. Street and the approval of the master. There was no evidence that any such insurance was ever taken out, nor that the supercargo had any reason to expect that it would be. Under this state of facts and other circumstances not detailed, I think that there was a continuous insurance from Augusta to Liverpool. Reference should also be made to the fact that there was a clause in the policy "that it was to cover the risk of fire on cotton in transit while waiting shipment." This certainly leads to the conclusion that there was no break in the continuity of the insurance, though there *Page 545 
is a recognition of the fact that the risks are not the same while waiting shipment as when in transit either by land or water. If this conclusion is correct, the cotton, while in the course of shipment, was covered by the policy, unless there has been some act on the part of the assured, or for which he is responsible, relieving the insurer. It is said by the defendant that there is such an act, viz.: the misconduct of the master in lading the goods on deck. To this the plaintiffs reply, that the act of misconduct is an act of barratry, and against that on the part of the master they are insured. The whole controversy is thus narrowed to the inquiry whether the act of the master is barratry. The defendant, however, urges that the rights of the plaintiffs were affected by some expressions in a certificate issued to them by the defendant on the twelfth of November. In this certificate there is a statement of the insurance and of the fact that the loss, if any, is payable to the plaintiffs, with the following clause appended: "It is understood and agreed that this certificate represents and takes the place of the policy, and conveys all the rights of the original policyholder (for the purpose of collecting any loss or claim) as fully as if the property was covered by a special policy direct to the holder of this certificate, and free from any liability from paid premiums."
I do not think that this certificate has any effect upon the general rights of the plaintiffs under the policy. It was shown by Mr. Atkinson, one of the plaintiffs, that the office of the certificate was to give some evidence of the existence of the insurance when drawing sterling bills of exchange. This was necessary, as the policy itself was retained by the company in its office, and entries of the subject-matter insured were made there from time to time by the company. It must be supposed to be of the same general nature as the policy itself. Accordingly, I do not think it necessary to consider its clauses or to determine whether it is in all respects consistent with the language of the contract as embraced in the policy.
The sole question, then, to be discussed, was the act of the *Page 546 
master, in lading the goods upon deck, barratry? This word has not yet acquired an absolutely stable meaning, generally recognized by law writers or lexicographers. Some of the definitions found in the books will be stated: "Barratry is an act of wrong done by the master against the ship and goods." (2 Arnould on Ins., 821, note h.) "It is that unlawful, fraudulent or dishonest act of the master, mariners or other carriers, or of gross misconduct, or every gross and culpable negligence contrary, in every case, to their duty to their owner, and that might be prejudicial to him or to others interested in the voyage or adventure." (1 Phill. on Ins., § 1062.) "A gross and palpable violation of trust by the captain, and a reckless disregard of his duty, is barratry (though without any view to his own particular advantage) to the prejudice of his principals." (§ 1074.) Parsons says: "We hold barratry to be any wrongful act of the master, officers or crew done against the owner. * * * If an unlawful act be done without intention, or through inadvertence, or ignorance, it is not barratry. The act must be wrongful in itself and wrongfully intended." (2 Pars. on Mar. Law, 239.) Chancellor KENT says that the term means a fraudulent breach of duty on the part of the master in his character of master, or of the mariners, to the injury of the owner of the ship or cargo, and without his consent, and it includes every breach of trust committed with dishonest views." (3 Comm., 306.) He adds: Barratry is used by French writers in its larger sense as comprehending negligence as well as willful misconduct; therefore, no illustration can be safely drawn from the French authorities, when the term is used in the English and American law in a more limited sense, and applicable only to the willful misconduct of the master or mariners. From these and many other authorities which might be cited, I think it beyond dispute that an ordinary act of negligence never can be barratry. It is not necessary to consider whether there may be negligence so extreme as to raise a presumption of willful misconduct. Judge DALY, in the court below, has shown with great affluence of *Page 547 
learning, that mere negligence never constitutes barratry. This seems to be settled law. I do not, however, think that this question arises in the present case. The testimony shows conclusively that the act complained of was not an act of negligence; the master's act was deliberate and willful, and after full and sufficient warning of the effect of it. This information came to him from the agent of the owner, in whose statements he would be expected to place confidence. If he could be supposed to have been so unfit for his business and grossly ignorant as not to be aware of the consequences of his act, that excuse cannot be urged in his favor after the clear statements and urgent opposition of the agent. If such an act were not deliberate and willful it is difficult to conceive what would be. I think, accordingly, that the master's act contained all the elements required to make it proper to submit to the jury the question whether his intent was fraudulent. The act, as has been seen, was willful and deliberate; it was done against the interest of the owner of the ship, which, by some authorities, is held to be a necessary ingredient in the case. The owner, according to all analogies, is liable to the owner of the goods for his loss. The master, by his unwarrantable act thus struck a heavy blow against his employer's interest. If it were enough to constitute barratry that the interest of the freighter were wrongfully assailed, then no one will dispute that the requisite ingredient was present in an act which caused the jettison of eighty or more bales of cotton. Having, then, plainly, the presence of a wrongful act, directed against the interest both of the owner and the freighter, the only possible doubt that can arise in the case is, whether, if a wrongful intent be necessary, that were present. The only mode of ascertaining that point is to draw the inference of fraud, from the attendant circumstances. The counsel for the plaintiff requested the court to submit the question, whether the act amount to barratry, to the jury. This was refused under due exception. It is claimed that this request was not sufficiently explicit, but that if any question was submitted it should have been that *Page 548 
of fraudulent intent. However, as the intent with which an act is done is a question of fact, I think it was proper to ask the judge at the trial to submit the whole subject to the jury, as a mixed question of law and fact, with appropriate instructions upon the matters of law. In Phyn v. Royal Exchange AssuranceCompany (7 Term R., 501), the court left it to the jury to determine whether deviation by the master was innocent or fraudulent, as an element in determining whether the act was barratrous.
It is now proper to show that these views are sustained by the authorities. There can be no doubt that if the act of lading the goods upon deck had been prohibited by statute it would have been a barratrous act on the part of the master. There can be no difference in principle, whether it is opposed to a statutory rule or to one of the common law, provided that the other necessary ingredients of the case are present, such as an act against the owner and one wrongfully intended. In Wilson v.Rankin (6 Best  Smith, 208; S.C., L.R., 1 Q.B., 166), the master stowed a portion of goods on deck and sailed without a certificate from a clearing officer that the whole cargo was below deck, contrary to 16 and 17 Victoria, chapter 107, sections 170, 171, 172. It was decided in the Exchequer Chamber that though the master had general authority from his owner to stow the cargo, no authority could be implied to load it so as to violate the statute. The court said: "If it had been shown that the master, without the express knowledge or authority of the owner, had committed the unlawful act, though for the owner's benefit, it would have been a barratrous act on his part, and if it had involved a forfeiture of the ship the underwriter would have been liable for the loss by reason of the barratry." It is to be observed that in this case stress is laid solely upon the point whether the act was unlawful. It was considered to be perfectly immaterial whether the owner sustained an injury or not or whether the act was intended for his benefit or not. So long as the owner did not authorize it the act was barratrous. He never can be presumed to authorize an act *Page 549 
which is in its nature unlawful. To take the case out of the class of barratrous acts, there must be express knowledge or authority. Much stress was laid upon the case of Earle v.Rowcroft (8 East, 126), as showing the meaning of the word"fraudulent," as used by the judges and text writers, who make that a part of the definition of "barratry." In that case, the master of the vessel traded with the enemy, making his ship liable to capture. It was held that the act was "fraudulent" though he intended to benefit the owner. The term "fraudulent," as thus used, seems to be substantially synonymous with breach of duty. Thus, it was said by Mr. Justice BULLER, in Salonica v.Johnson, cited in Park on Insurance, (chap. 18), that he had no doubt that if resistance to a neutral ship, to be searched by a belligerent, were a breach of neutrality (as it is now settled that it is), such resistance would be barratrous, being contraryto the master's duty. Moss v. Byron, cited with approval inEarle v. Rowcroft, is much in point. In that case, it appears that the master deviated from his course to make prizes. Lord KENYON said it was barratry, because it was contrary to hisduty to the owners. "It was contrary to his duty and to the prejudice of the owners, because they stipulated by the charter-party that the ship should sail directly to Liverpool and therefore they were liable to the freighters for any damage thatmight happen in consequence of that deviation." LAWRENCE, J., said: "If the captain did any act that increased the risk, that was barratry." This case distinctly holds that a mere willful violation of a common-law duty, injurious to the owner and without his consent, is barratrous. The principle of this case is in no respect shaken by Phyn v. Royal Exchange AssuranceCompany (7 Term, 501). The real controversy in that case was whether the deviation was innocent or frudulent. That question having been left to the jury, and it having been found that it was innocent, the court, in the face of such a finding, could not presume fraud or a deliberate act in violation of duty. The remarks of the court are to be interpreted from this point of view. In the case of Boehm v. Combe (2 Maule *Page 550  Sel., 172), an attempt was made to extend the word "barratry" to land carriage in a policy partly on land and partly marine. Lord ELLENBOROUGH said: "The word barratry is large enough to include every species of fraud or malus dolus commited by the wagoner or his servants."
The meaning of the term under discussion was carefully considered in Lawton v. Sun Mutual Insurance Company (2 Cush., 500). The court, per SHAW, C.J., there said: "Barratry consists in willful acts or conduct of the master or mariners done for some unlawful or fraudulent purpose, contrary to their duty to the owners of the vessel. The act must be willful and not accidental or caused by negligence, unless the negligence be so gross as to amount to evidence of fraud. It has been held not to be necessary that there should be fraud in the sense of an intention on the part of the master to promote his own benefit at the expense of the owners; but any willful act of known criminality or of gross malversation operating to the prejudice of the owner is, in legal contemplation, barratry. Every willful act on the part of the master of known illegality, every gross malversation in his office or criminal negligence, by whatever motive induced, whereby the owner is damnified, comes within the legal definition of barratry." (Pp. 511, 512.)
The case of Patapsco Insurance Company v. Coulter (3 Peters, 231) sheds some light upon this perplexing question. JOHNSON, J., in delivering the opinion of the court, points out that much of the confusion attending, it is derived from the want of precision in the use of the term "fraudulent," and that all that is meant by that is, "an act contrary to the master's duty." In the language of BAYLEY, J., in Busk v. The Royal ExchangeInsurance Company (2 Barn.  Ald., 82), the term "barratry" is an equivalent to the expression "willful misconduct." A still better form of expression is given by Lord ELLENBOROUGH, inEarle v. Rowcroft (supra), in treating of breach of trust
between the master and owners as an equivalent to barratry: "Now I conceive that the trust reposed in a captain of a vessel obliges him to obey the written instructions of his owners where they give him any; and where the instructions *Page 551 
are silent he is, at all events, to do nothing but what isconsonant to the laws of the land, either with or without a view to their advantage." In commenting upon these expressions, JOHNSON, J., adds, that here it is seen that an act "inconsistent with written instructions" and an act "not consonant to the laws of their land" are brought within the description of fraud upon the owners, as applied to the definition of barratry, and that it appears from this that the meaning of the word "fraud" is not confined to moral fraud or that the term is not well chosen. (3 Peters, 231-2.) In accordance with these doctrines, willful deviation from the regular course of the voyage by the master in fraud of his owners for purposes of his own, is barratry. (Vallejo v. Wheeler, Cowper, 143.) So dropping anchor and going ashore to find a market for a private adventure is barratry, and it commences with the act of stopping the voyage. (Ross v. Hunter, 4 T.R., 33.) The same result was reached as to an intentional delay of the voyage for an unlawful purpose. (Roscow v. Corson, 8 Taunton, 684.)
For the purposes of the present case, we must accordingly hold that the willful act of the master in loading the cotton on deck, after full knowledge of the consequences of the act to his owner and the freighters, was an act known to be contrary to a settled rule of law and to his duty, and might well lead the jury to find that it was done with that species of fraudulent intent which has been considered requisite by the court in this class of cases, and that it was not only a wrongful act, but was also wrongfully intended.
If these views are sound, the goods were, while on deck, covered by the policy. The result is precisely the same as though the following words had been written in the policy: "This policy shall attach to ____ bales of cotton laden on deck," etc. That being so when the jettison took place, the loss occurred by the perils of the sea, and the insurers are, of course, liable. But if this were not so, and if the barratry must be the direct cause of the loss, the same result would be reached. The case is not at all like *Page 552 
a loss occasioned remotely by negligence, and directly by a sea peril, where the proximate loss must be regarded. Barratry is itself a sea peril, included in a general description in a policy of marine risks or sea perils, in the absence of any stipulation to the contrary. (Parkhurst v. Gloucester Mut. Fishing Ins.Co., 100 Mass., 301.) That peril in the present case did not spend its force until all its consequences were reached, one of which was the jettison, made necessary by the wrongful act insured against. The barratry was accordingly the direct cause of the loss.
The act of the supercargo in writing the letter, referred to in this opinion, cannot avail the defendants. It was not an act within the scope of his authority, or that of the master. It cannot be said, in any proper sense, that Mr. Street assented to the act of loading the cotton on deck, since he strenuously objected to it, and warned the master of its consequences in distinct and emphatic terms. His subsequent advice to the master, to address the letter to the assumed representative in England of the owner of the vessel, can only be properly regarded as a well-meant effort on his part to mitigate, if possible, the effect of the master's wrong. There is no evidence to the contrary, and we cannot assume, in its absence, that he intended to sanction an act wholly unwarranted by usage, and so highly detrimental both to the owner of the ship and of the cargo. The act of the master and supercargo was plainly not binding on the owner of the ship, as he cannot be supposed to have given either of them authority to do an act in violation of his own duty to the owner of the cargo. This point was considered in Earle v.Rowcroft (8 East, 140). It was there argued that as the captain united in himself the two characters of master and supercargo, and that in the character of captain he must be considered as obeying the directions of his owners, given to himself, as captain, by himself, in his character of supercargo. The court said: "It is sufficient to state such an argument to show that it can have no weight. The directions of the owners, as to the conduct of the voyage, * * * are to be looked for in their instructions, which, *Page 553 
coupled with their duty to their country, must, during every moment of the voyage, be considered as either expressly or impliedly directing the captain to conduct the ship to those places only where the trade might be carried on without violating the laws of the country." It is only necessary to substitute for the expression "duty to their country," the words "duty to the owner by the law of the country," to make the cases exactly parallel.
The defendants finally urge the ill consequences of a ruling that the present act may be treated as barratry, and that, by analogy, all cases of bad stowage must be regarded as barratry. This by no means follows. As has already been said, we have no disposition to hold that negligence, except in extreme cases, is barratry. (See Grim v. The Phœnix Ins. Co., 13 J.R., 451.) It is only necessary for the purposes of this case to hold that when a wrongful act is willfully done by the master, with knowledge of its wrongfulness, and of his breach of duty, and it is injurious to the freighters and owners, it is error for a judge at the Circuit to rule, as matter of law, that it is not barratrous in its nature, and to withdraw the question of the master's intent from the jury.
The judgment of the court below should be reversed.
Judgment reversed. *Page 554