Cory v. Boylston Fire & Marine Insurance

107 Mass. 140 | Mass. | 1871

Gray, J.

By the general law of insurance, underwriters against perils of the sea and other usual perils do not assume the risk of ordinary perils incident to the course of the voyage, nor of damage arising from intrinsic qualities or defects of the thing insured, including waste from ordinary leakage of liquors. 1 Phil. Ins. §§ 1086, 1089, 1090.

The clause in the policy before us, which provides that the insurers shall not be liable for leakage, unless occasioned by stranding or collision, exempts them from liability for all leakage, ordinary or extraordinary, and from whatever cause, whether gradual or violent in its operation, except those specified. When bottles which have once been filled and corked are found partly empty, while the bottles are still whole, and the corks in their places, the deficiency, whether called “ ullage,” or “ wantage,” or by any other name, can only have arisen from leakage. The defendants therefore are not liable for such deficiency.

Independently of the peculiar provisions of this policy, underwriters are not liable for injury to goods by the ordinary dampness of the hold, though aggravated by the length of the voyage and the variety of climate through which the vessel has passed in consequence of perils of the sea, because such injury is still, if those perils do not otherwise operate upon the goods, attributable to the nature of the goods themselves, and not to the perils of the sea, as the proximate and efficient cause; but they might have been held liable for injuries occasioned to the goods from an extraordinary formation of steam or gases, arising from an extraordinary access of sea water into the hold by reason of perils of the sea. Baker v. Manufacturers’ Insurance Co. 12 Gray, 603. Montoya v. London Assurance Co. 6 Exch. 451. Taylor v. Dunbar, Law Rep. 4 C. P. 206.

In Baker v. Manufacturers’ Insurance Co. 12 Gray, 603, decided by this court in 1851, the facts curiously resembled those in the present case. The policy was upon delicate French goods on a voyage from Havre to Boston. The vessel had an extraordinarily long passage, and met with repeated gales and stormy weather, which drove her south of her usual course, and caused her to ship heavy seas, and to strain and open her seams, but not to leak much. Upon examination of the cargo after arrival, many of the cases appeared to have been wet with salt water; some cases were damp in which there was no indication of salt water, and in some of these the goods were as much damaged as in those that appeared to have been wet; there appeared to be no difference in the nature of the damage, which consisted of discoloration and mould; and some of the witnesses were unable to determine how many of those cases the content's of which were damaged had been wet with salt water. It was held, that the insurers were liable for the damage to the goods, occasioned by their being wet with salt water ; that they were not liable for any damage from the ordinary dampness of the hold, though aggra* Vated by the length and circumstances of the voyage; and that for the goods not found to be actually wet with salt water, but damaged by being spotted and stained, it not being shown whether such damage was occasioned by the ordinary dampness of the hold upon such a voyage, or by an extraordinary formation of steam and gases, occasioned by an extraordinary access of sea water, caused by perils of the sea, the plaintiffs could not recover,

In Montoya v. London Assurance Co. 6 Exch. 451, decided in the same year by the English court of exchequer, a vessel laden with hides and tobacco encountered much bad weather, and shipped large quantities of sea water, which wet and putrefied the hides, and caused them to ferment, but did not come in actual contact with the tobacco or the packages containing it; but, in consequence of the fetid odor created by the fermentation of the hides, the tobacco was damaged and deteriorated in flavor ; and it was held, that the damage thus occasioned to the tobacco was a loss by perils of the sea as the proximate cause.

The provision in the policy in suit, by which “ it is agreed that the insurers shall not be liable for damage or injury to goods by dampness, rust, change of flavor, or by being spotted, discolored, musty or mouldy, unless the same be caused by actual contact of sea water with the articles damaged, occasioned by sea perils,” was evidently inserted with a knowledge of these two decisions, and with the intention of defining the liability of the insurers under similar circumstances. It expressly limits their liability for damage or injury by dampness, or by change of flavor or such other deterioration in quality as is a common result of dampness, to such effects when caused by actual contact of sea water with the articles damaged, occasioned by sea perils. It is not enough to bring a case within this clause, that perils of the sea should be the efficient, and, within the rule laid down in the previous decisions, the proximate cause, by which the sea water was shipped, which, more or less directly, operates upon and injures the goods; or that the sea water should come in contact with part of the cargo , but it must come into actual contact with the articles, for the damage to which the underwriters are sought to be charged. And we are of opinion that when the goods in question are not loaded in bulk, but packed in cases separately valued, the insurers are liable for the damage occasioned by dampness or its effects to those packages only, with which the sea water comes into actual contact, and not for the injury resulting from such dampness to other packages not touched by the sea water. It was suggested, though not strongly urged, that this provision must be restricted in its application to solids only, and therefore does not affect this case. But we cannot yield to that suggestion. Change of flavor may occur in liquids as well as in solid articles, and dampness may injure the packages containing the one, and consequently the contents, as well as the other. The champagne being valued by the case, the effect of this clause is, that, so far as the sea water came into actual contact with any case or package, the defendants are liable for any injury occasioned either by such direct contact, or by any heat or dampness thereby generated, to the same package, but not for any injury by dampness or change of flavor to other packages, no part of which had been brought into actual contact with the sea water.

The policy further provides that the insurers shall not be liable for any partial loss, unless it amounts to five per cent., exclusive of charges and expenses incurred in ascertaining and proving the same. And it is well settled that the burden of proving a loss from a cause, and to an amount, for which the insurers are liable, is upon the assured. Baker v. Manufacturers' Insurance Co. 12 Gray, 603. Leftwitch v. St. Louis Insurance Co. 5 Louisiana Annual, 706. Heebner v. Eagle Insurance Co. 10 Gray, 131. Paddock v. Commercial Insurance Co. 104 Mass. 521.

The loss, as estimated by the appraisers, and for the defendants’ proportion of the full amount of which the verdict was returned, was the entire damage, whether from breaking of bottles, emptiness or ullage, or deterioration in quality and merchantable value; and the evidence did not show how much of this injury was caused by actual contact of sea water with the packages injured, and how much by steam or dampness in the hold, or the inherent qualities or defects of the wine. According to the terms of the report, the verdict must therefore be set aside and a new trial granted.

The return duties, received by the plaintiffs from the customhouse, should not be deducted from the amount to which the insurers are to contribute. All the authorities agree that the underwriters have nothing to do "with freight, duties or charges whether the partial loss is made up by reference to the value of the goods on board at the port of destination, or the net proceeds of the sales .thereof there, deducting all charges; or by the more usual rule, (which appears to have been assumed in this case,) of taking the market value of the goods after being landed and all freight, duties, truckage, storage and other charges paid, or, in other words, the gross proceeds of sale. In the former alternative, the duties do not enter at all into the computation of the loss. In the latter alternative, they are not computed as a distinct item, but the market value of the goods on shore at the port of destination is assumed as the standard, by the proportion between which and the valuation in the policy the partial loss is to be estimated. It is true that into such market value enter not only the original cost and the freight, but also the duties and other charges of landing, as well as the merchant’s profits. But even if the goods should arrive at a falling market, and their gross market price upon a sale in the port of destination would not equal the cost and freight, that price would not the less be the standard of adjustment. It does not affect this standard, and is of no consequence to the insurer, whether the duties have or have not been demanded and paid, or whether a portion of the duties is remitted upon the damaged goods before payment, or, after having been once exacted, is refunded. In either event, the duties, from payment of which the damaged goods have been exempted, do not increase the value of those goods when landed, or diminish the amount of the damage, but only show that by reason of the damage occurring on the voyage this portion of the goods was not rightly liable to duty. Lewis v. Rucker, 2 Burr. 1167. Johnson v. Sheddon, Burn on Ins. 154, 167, and 2 East, 581. Usher v. Noble, 12 East, 689. Lawrence v. New York Insurance Co. 3 Johns. Cas. 217. 2 Phil. Ins. § 1464. Stevens & Benecke on Average (Am. ed.) 308 seq., 330 & seq. Hopkins on Average (3d ed.) 238 & seq.

Under tne suing and laboring clause in the policy, the insurers are Hable tor a proportion of any reasonable expenses incurred in preserving the subject insured from the operation of the perils insured against. Kidston v. Umpire Insurance Co. Law Rep. 1 C. P. 535, and 2 Ib. 357. But they are not Hable for expenses of the examination by appraisers for the purpose of ascertaining the amount of the loss, nor for the expenses of refitting the wine for market. As the nominal sum in currency, for which the verdict was returned, included aU these, it cannot stand; but it must be referred to an assessor to ascertain what, if any, part of the expenses was sustained in preserving any of the cases of wine from further damage by the operation of the sea water which had come into actual contact with them.

Verdict set aside