298 F. 1 | 9th Cir. | 1924
(after stating the facts as above).
“The freight, whether prepaid or to be collected, was to be considered as earned, vessel or goods lost or not lost, at any stage of the entire transit.”
The appellants in their answer to the libel, quoted these words from the bills of lading. The Navigation Company had assigned to the appellee the freight to be earned on the homeward bound voyage and had promised to insure it for his benefit. The freight for carrying the ore from Antofagasta to San Francisco was at risk from the moment when the voyage from San Francisco began. It was decided to have that risk insured in separate contracts, one for each leg of the voyage, but each was for $30,000, the exact amount of the freight contracted to be paid for carrying the ore.
The language of the first covering note, by its plain terms, related to the risk on the southbound voyage. It insured against the loss of the freight in case the Roanoke should be lost by marine risks at and from San Francisco on her described voyage to Antofagasta and during her presence and loading there, and until she should be ready to sail for San Francisco. It contained the provision, “It is understood and agreed that this policy is extended to cover while vessel is at loading port, during loading, and until ready to sail,” and the provision, "freight on board or not on board,” thus showing that the risk assumed by the underwriters under the first note was a risk which was to terminate at the time when the vessel should be loaded at Antofagasta for her return voyage, from which time the second covering note would be in force, “at and from Antofagasta to San Francisco.” It is “by no means uncommon” to insure during a previous voyage the freight to be earned on a subsequent voyage. Lazarus, Law Relating to Insurance of Freight, 38; Rankin v. Potter, 2 Asp. 65; Barber v. Fleming, Law Rep. 5 Q. B. 59. In Lincoln v. Boston Marine Ins. Co., 159 Mass. 337, 34 N. E. 456, Judge Holmes said:
“Contracts always are arbitrary in wbat they do or do not undertake. There is nothing irrational, however, in a contract of insurance on successive voyages, keeping each distinct.”
But the appellants say that the underwriters may not have been aware that the bill of lading freight had been prepaid, and, if so, they were justified in regarding the first covering note as referring only to freight earned on the first leg of the voyage. There is nothing in the record, aside from the written instruments, to show what the parties had in mind in entering into the contract. Those terms make it sufficiently clear that it was not the intention to insure freight on the south-bound cargo. The first covering note named Antofagasta as
“The above being merely information for our mutual understanding, and is subject to the clauses of the regular charter party as agreed to by the charterers and the Steamship Company.”
The appellants refer to the testimony of the president of the navigation Company, which, they say, shows that the correspondence was preliminary and subject to a regular agreement afterwards to be drawn up and signed by the parties. We think that the correspondence in itself created a binding- contract. It was not necessary that it should be expressed in a charter party, Truscott v. Christie, 129 Eng. Rep. 990, 994. That the president of the Navigation Company, considered it binding, notwithstanding his testimony that it referred to a subsequent more formal instrument, is shown by the fact that he assigned to the appellee his rights thereunder and in the assignment referred to the contract as a “charter of the Roanoke.” The agreement, as expressed in the correspondence, has no ambiguity. It states the tonnage to be carried and the freight rate, describes the voyage, makes provisions for lighterage and for a loading rate, for weather working days, the demurrage, and the date of loading at Antofagasta.
The appellants cite our decision in Northwestern Lumber Co. v. Grays Harbor P. S. Ry. Co., 221 Fed. 807, 137 C. C. A. 365. In that case specific performance was sought of an agreement for the sale of real estate which expressly provided that “a formal agreement shall be entered into pending mutual transfers.” The formal contract
The decree is affirmed.