Minturn v. Warren Insurance

84 Mass. 86 | Mass. | 1861

Bigelow, C. J.

The insuperable difficulty in the way of a recovery by the plaintiff on the policy declared on is that he fails to show that he had any insurable interest in the freight, for the loss of which he seeks to recover in this action. He was not the owner or charterer of the vessel, and had no interest either direct or remote in her earnings. They were not pledged to him as security for the money which he advanced to the owners, nor had he any lien upon them for his reimbursement in case the contract of affreightment was not fulfilled. The money advanced for the carriage of that part of the cargo which belonged to him was not intended as an absolute payment of the freight. By the terms of the bill of lading, the contract was entire, and no freight would be earned unless the coal was carried and delivered at the port of destination. If, for any reason not imputable to the plaintiff, the owner of the vessel failed to deliver the coal according to the terms of the bill of lading, the plaintiff might recover back the sum advanced. Griggs v. Austin, 3 Pick. 20. Brown v. Harris, 2 Gray, 359. How then can it be said that he had any interest in the earnings of the vessel ? His right to claim repayment of the owner did not operate as an assignment or pledge of the earnings of the vessel, or give him any lien on them. It was only a personal liability of the owner of the vessel for the amount advanced, dependent on the contingency of the fulfilment of the contract for the carriage of the cargo. If the vessel arrived at her port of destination and delivered the coal, there would be no debt due to the plaintiff; if she failed to arrive, the owner would be indebted for the amount advanced. It was in the nature of a conditional loan. The liability depended on the contingency of the arrival of the vessel and delivery of the cargo. But this liability did not constitute the subject of insurance. It was the freight or earnings of the vessel which the defendants agreed to insure. In these the plaintiff acquired no *90interest by a mere advance of freight money on the credit of the owner. No doubt he had an interest in the performance of the voyage and delivery of the cargo, by which the freight would be earned by the owner. But it was an interest in having his goods placed in a market, where they might bring a price sufficient to cover the sum advanced. This was an interest only in the goods, which might well form a subject of insurance, but not in the earnings of the vessel. And this is the fallacy of the plaintiff’s argument. He strives to sustain the position that the interest of the plaintiff in having his goods arrive at San Francisco, increased in value by the cost of transportation, might well be insured as freight. In support of his argument, he says if the freight had been earned he should have sustained no loss, but as it was not earned he has lost this increased value of his goods. This is true, but it does not follow that therefore he had an insurable interest in the freight, qud freight. He might with the same reasoning maintain that under an insurance on the ship he ought to recover for the loss of his anticipated profits on the cargo, because if the vessel had not been lost he would have realized them on her arrival at the port of destination. The difficulty consists in confounding an interest in the successful event of the voyage by reason of having goods on board the vessel, with an interest in the subject covered by the policy. The freight advanced might well have been added to the value of the goods. In them the plaintiff had an interest which he might have protected by insurance on the anticipated value of goods, or as money advanced to the owner on account of freight, or by any other appropriate terms, to indicate the nature of the subject covered by the policy in which he had an interest. But it cannot be included under the term freight. That he did not own; in no contingency could he be entitled to it, or to any claim or lien on it. As a distinct subject of insurance, he had no interest in it. The objection to the plaintiff’s claim does not rest on the ground that he has a remedy against the owner of the vessel for reimbursement. Persons may well protect themselves against loss in cases where they have a valid claim for indemnity against third persons. Insurance against damage *91caused by collision at sea, and by a mortgagee of .property held as collateral security for a debt, are familiar instances of this class of contracts, the validity of which cannot be doubted. But in all such cases the insured has a direct interest in the subject • covered by the policy. This is the essential element which is wanting in the case at bar. The facts agreed by the parties bring it within the principle laid down in the elementary writers and supported by the adjudicated cases, that a mere advance of the freight of goods will not give the party making the advance any insurable interest in the freight so advanced, in case of his having a right to recover it back, if the goods on which the freight is advanced shall not be delivered according to the bills of lading. 1 Phil. Ins. §§ 340, 482. 2 Parsons on Mar. Law, 88. Manfield v. Maitland, 4 B. & Ald. 582. Wilson v. Royal Exch. Ass. Co. 2 Camp. 623. De Silvale v. Kendall, 4 M. & S. 37. Winter v. Haldimand, 2 B. & Ad. 649. Saunders v. Drew, 3 Ib. 445.

It was urged by the learned counsel for the plaintiff, in his very ingenious and elaborate argument, that the word freight, as used in this policy, is not to be taken in its ordinary and legitimate sense, but that it is to be construed, in connection with the context, as equivalent to the words goods on board. But this seems to us to involve the startling proposition that, under an insurance on freight, the underwriter may be held liable for a loss on cargo. Such a construction would amount to a perversion of terms. The word freight, as used in policies of insurance, has a well settled and distinct meaning. It does not include cargo or goods laden on board. These are insured under the term goods, or cargo, or merchandise, or words of like import. Freight signifies the earnings or profit derived by the ship-owner or the hirer of a ship from the use of it himself, or by letting it to others, or by carrying goods for others. 1 Phil. Ins. §§ 327, 469. 1 Arnould on Ins. 200. It cannot be made to comprehend the profit which the owner of a cargo, having no interest in the vessel or earnings, as such, expects to derive from the transportation of his goods to their port of destination. The defendants have a right to stand on their written contract; *92the court must interpret its language according to its legitimate and usual meaning, and cannot change or vary its ordinary signification by evidence of extrinsic facts. These may be resorted to for the purpose of showing that the insured has an interest in the subject insured, but not to show that the subject is different from and other than that which is described by apt words in the policy. Nor is there anything in the words used in connection with the term freight in the written part of the policy which warrants the supposition that it was used in any different sense, or to indicate a different subject of insurancé, from that which is usually attached to it in all contracts of insurance. The words “ carried or not carried,” on which the plaintiff places great stress as qualifying the term freight, have no such meaning as that which he seeks to put on them.,- They apply only to the valuation of the freight, and may well signify that the insured would be entitled to recover the whole sum insured, although he might not take on board all the goods which would entitle him to the entire amount which had been advanced to him. De Longuemere v. Phœnix Ins. Co. 10 Johns. 127. Same v. N. Y. Ins. Co. Ib. 201. They are equivalent to the words “ on board or not on board,” and do not import that the subject of insurance relates to goods or cargo, and not to freight in the ordinary meaning of /that word.

We are therefore of opinion that the plaintiff had no interest in the freight to which the policy could attach; that the contract did not extend to and cover the increased value which the cargo might have in the port of destination ; and that he can recover in this action only the premium paid by him for the policy.

Judgment accordingly.

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