Murray v. Columbian Insurance

11 Johns. 302 | N.Y. Sup. Ct. | 1814

[Thompson, Ch. J.

But should not the insurers be informed pf the nature of the interest; or should it not be insured specially as a lien.?]

We may insure generally, and show at the trial the nature and amount of our interest. The averment of interest in the declaration may be general or special, and under the general averment the plaintiff may give in evidence any interest he may have in the subject insured. But if he aver a special interest, he must prove it as stated.^*

C. J. Bogert and S. Jones, jun. contra.

1. The goods which were on board at Cagliari, except the salt and a few articles at Messina, were actually laden on board at New-York, eleven months before. The voyage insured was to commence from the lading on board at Cagliari. The voyage must be truly and explicitly defined, and the policy is to be understood according to the plain and unequivocal language of the instrument. There is no usage of trade to explain the meaning of the parties; nor can any parol agreement, or understanding of the parties, be received.^‡ In Vredenburgh v. Gracie the case was decided only T . t -i. . 1 i by Lansing, Ch. J. and Lems, J., and they went on the ground that the insurers were informed, at the time, of the situation of the vessel, and they intended to insure her on a trading voyage; 'and Livingston, J. when noticing that case, in Graves and Seriba v. Marine Insurance Company, says, with all the explanations given, Hamilton and himself were of opinion that the plaintiffs could not succeed, without applying to the court of chancery to amend the policy. In Richards v. Marine Insurance Compeny,^§ Mr. Justice Spencer, who delivered the opinion of the court, considered the question as completely at rest, since the "decision in Graves and Scriba v. Marine Insurance Company.

Again, this is a valued policy, and the valuation applies to the interest of the insured, whatever it may be, and it is enough if he shows an interest to the amount insured.^† The defendants, 111 . , moreover, have received a premium on the whole sum insured, mo part of which can be recovered back, nor can there be any averment of short interest;

[Thompson, Ch. J.

The court are so much inclined to that opinion, that you need not argue the point further.]

We shall only add one case, that of Spitta v. Woodman,^|| decided in the court of C. B. in England, which is precisely to the same point.

2. The plaintiffs had an insurable interest in two thirds only of the salt laden on board at Cagliari. If any lien was intended," or any legal interest existed in the plaintiffs, why were, the invoice *nd bill ©f lading in the names of the Lymans jointly with the plaintiffs. One of the Lymans was actually on board of the vessel, and had, therefore, not only the legal title,. but the legal possession of their interest.

Again, the lien, if any, was on the goods shipped from New-York, not on the salt purchased for joint account of the defendant and Messrs. Lymans, at Cagliari.^*

3. As to the ship, the only proof of interest is the register, and it does hot accord with the averment in the declaration. Ne person can have a legal or equitable title to a ship, unless he is named in the register. In Camden v. Anderson,^† where four . . , . „ persons purchased a ship, which was registered in the names oi two of them, it was held that the four had not insurable interest. An averment of interest in two, will not be supported by showing an interest in four.

In Riley v. Delafield,^‡ where the plaintiff had sold the ship, but. the purchaser agreed that he should have the whole freight for tjje voyage, for which she had been previously chartered, and which was the voyage insured, it was held that the plaintiff had not an insurable interest, as freight, and could not recover, unless the precise nature of his interest was disclosed to the insurers, and specially insured by him.

The case of Post and others v. The Phœnix Insurance Company is not applicable. There one fourth of the ship was insured, and the valuation applied to the interest insured, not to the whole ship. Here the insurance is on the ship generally, without mentioning any part; and it was so intended by the plaintiffs, for they supposed they had an insurable interest in the whole. The plaintiffs having proved an interest in a moiety-only of the ship, that must be the extent of the recovery.

T. A. Emmet, in reply, insisted that the plaintiffs had an interest in the whole cargo, in two thirds absolutely, and in one third as a lien for their advances. Where one person has an absolute, and another a qualified, interest in the same subject, each may insure,^§ and may recover the whole. In the case of Hill and another v. Secretan, the consignor shipped goods, part of which were to be held for the plaintiffs, who were creditors of the consignors, and they were held to havean insurable interest.

It is said a qualified interest should be specifically insured. The eases decided as to bottomry and respondentia are not applicable to all qualified interests. The rule, in regard to bottomry and respondentia, is a mere rule of practice adopted in Europe. They are, in themselves, a species of insurance. Lord Mansfield, in Glooer v. Black,^* states the ground of their decision to be, that bottomry and respondentia, by the "custom of merchants," is insured specially; but he strongly intimates that under an insurance on goods generally, a mortgage, or other special lien, might be given in evidence. In Wolf v. Horncastle,^† Buller, J. says that "a debt, which arises in consequence of the article insured, and which would have given a lien on it, gives an insurable interest," which is the present case. In Russel v. The Union Insurance Company,^‡ it was alleged that there was a fraudulent concealment of the interest, which is not pretended in this case, Washington, 3. observes that "it is clear that a person having a lien on the cargo, may cover it by an insurance on goods." "It is true, that the assured should communicate to the underwriters the nature of his interest in the subject in~ sured, though it need not be specified in the policy ;" and a question of fact was, "whether the insurance of the special iu~ terest, and not of the principal ownership, made a material d11 ference in the risk, or would have altered the premium: and if the fact was not sufficiently disclosed to the defendants," he said, "the omission would vacate the policy."

It is contended that the goods, except the salt, are not covered by the policy, because not within its terms. Suppose that it had been necessary to repair the ship at Cagliari, and for that purpose to have landed the whole cargo, or to have put it on board of lighters, and after the repairs were completed, it should be again “laden on board at Cagliari,” would not this come, within the terms of the policy, and would not the policy attach on the whole cargo? The distinction between such a case, and the one before the court, must be extremely nice indeed.

As to the ship, if the plaintiffs had a lien, as we contend, on the other half, for their advances, the case of Oliver v. Green is in point.

In Rising v. Burnett,^§ it was held that one of several part owners might insure freight generally, without mentioning what share he had in the ship, and might declare generally, and recover for an aliquot part, or according to his interest-.

The premium aids in determining the intention of the parties. being paid on the whole sum, affords the strongest inference that the defendants meant to insure the interest of the plaintiffs to that amount.

Van Ness, J.

delivered the opinion of the court. The first question made in this cause, is, whether the policy attached upon any other part of the cargo than the salt. The policy is at and from Cagliari, to St. Peter ¡¡burgh, upon all kinds of goods and merchandises, laden or to be laden on board the Rolla; .beginning the adventure “ from and immediately following the loading on board the said vessel, at Cagliari.” The plaintiffs’ right to recover for any other part of the cargo than the salt, depends upon the fact, whether it was shipped at Cagliari or not; it having been solemnly determined, on different occasions, by this court, as well as the courts in England,^(a) that, in policies like the present, the insurance attaches only on the cargo taken on board at the port where the adventure is to begin. (Graves and Scriba v. Mar. Ins. Comp. (2 Caines 399.) Richards v. Mar. Ins. Comp. (3 Johns. 307.) Murray v. Col. Ins. Comp. (4 Johns. Rep. 443.) Robertson et al. v. French, (4 East, 130.) Grant v. Paxton, (Marsh, on Ins. 274.) Hodgson v. Richardson, (1 Wm. Bl. Rep. 463.)

The evidence in this case does not support the allegation on the part of the plaintiffs, that the whole cargo was shipped on board, at Cagliari, Except the salt, it consisted of the remains of the outward cargo, and of merchandise purchased and put on board the Rolla, at Messina. The hoisting the cargo out of the hold of the ship, and restowing it at Cagliari, does not amount to loading it on board the ship at that place, either according to the words, the reason, or the spirit of the contract. This part of the case is too clear to require any further comment. The policy attached, therefore, only upon the salt; and the next question is, whether the plaintiffs are to recover for the loss of the whole of this article, or for any, or . for what proportion of it ?

For the plaintiffs, it is contended, that they had an insurable ‘interest in the whole of the cargo, as having a lien upon one third, sold to the Lymans to secure the amount of the purchase money, and as being themselves the owners of the residue. The evidence does not establish that any such lien existed. The sale made to the Lymans was an absolute one. They were, in the first place, charged with the amount in the plaintiffs’ books, and afterwards gave their notes for the payment of the same. The invoices and bills of lading were made out jointly in the names of the plaintiffs and the Lymans ; not only those relating to the outward cargo, but also those made out at Cagliari. It is true that Swan says, the Lymans were to be interested in one third of the proceeds, if paid for when the voyage ended, and that such was the agreement of the parties. So far is this statement by the witness from being any evidence of a lien, that, if it be true, the purchase was not consummated ; it was a mere agreement to sell on condition, that, at the end of the voyage, the purchasers should pay. It is a relation altogether at variance with the allegation that there had been a sale, and that the plaintiffs had a lien upon the goods, for the consideration. But the whole of this part of Swan’s testimony is utterly inconsistent with the other, and particularly thé written evidence in the case, all of which most satisfactorily shows that the plaintiffs, at the time of the sale, trusted to the personal responsibility of the Lymans. It is remarkable, also, that it was not until several months after the insurance had been effected, that the letter to Messrs. Sansom 8r Son was written by the plaintiffs, directing them to pasp to their (the plaintiffs’) credit, any remittances made on account of the owners of the Rolla. The plaintiffs having-paid for the whole of the outward cargo, it is possible they may have intended to preserve a lien for their advances upon that portion of it which was sold to the Lymans; but judging from the proofs before us, as we are bound to do, they have omitted to frame their contract in such a manner as to effectuate that intention. The plaintiffs, however, were the owners of two thirds of the salt, and the value of that they are entitled to recover.

It is supposed by the defendants’ counsel, that, under this insurance of the whole cargo, and the pleadings in the cause, the plaintiffs were bound to show they had an insurable interest in the whole. But it is not necessary for the assured to have the*^ precise interest, or proportion of interest, he intends to insure, inserted in the policy. If he has an insurable interest in the entirety of the cargo, he may cause it to be separately insured; and under a general averment of interest in the entire thing inBured, he shall recover for the loss, in proportion to the quantum of interest he proves upon the trial. (Marsh, on Ins. 682. 710.) Rising v. Burnett, (Ib. 730.) Lawrence v. Van Horne and Clarkson, (1 Caines’ Rep. 276.) Lawrence v. Sebor, (2 Caines’ Rep. 203.)

It is not, I believe, claimed by the plaintiffs, that, under this insurance and the averment in the declaration, they can recover for that part of the cargo belonging to the Lymans. The insurance is for their own account, and there was no intention to cover the interest of any other person. The declaration, moreover, expressly avers that the insurance was really and truly made for the proper account, use and benefit of the plaintiffs themselves. The result is, that the plaintiffs are entitled to recover the value of the two-thirds of five hundred salms of salt, laden on board the Atlantic, at Cagliari, and for no other part of the cargo.

The other suit between the same parties is upon the policy on the ship, which is a valued one, that on the cargo being open. The insurance is upon the whole ship ; the plaintiffs, probably, supposing, at the time, they had an insurable interest in the whole. Like the cargo policy, the insurance is solely of their own account; and the declaration avers the interest to be in them solely. The ship is valued at 16,000 dollars, and it is “ admitted, that the real value of the whole vessel, at the time “ of the insurance, was not more than 16,000 dollars.”

It appearing upon the trial that the plaintiffs owned only a moiety of the ship, (and there is not a shadow of proof of any greater interest of any kind,) it was objected that they were not entitled, under the pleadings, to recover for any part. This objection has already been considered and answered in deciding on the policy on the cargo. There is no doubt that the plaintiffs may recover according to the interest proved; and the only remaining question is, whether they shall recover the value mentioned in the policy, or half that sum only ?

I have not found any case where this very point has been determined, and it must, therefore, rest upon general principles. The ground of decision in the cases that have been referred to, in the argument on the case on the cargo-policy, is, that although the insurance be general upon a ship or cargó, and the declaration avers a general interest in the plaintiffs, yet the recovery shall be according to the interest and loss proved upon the trial. The contract of insurance is purely a contract indemnity, and it is equally so, whether it be an open or valued policy. Hence, it follows, that the plaintiffs ought not to recover more than half the sum at which the whole ship is va» lued; for as they owned but one half, they ought not to recover more than they have lost. In an open policy, in cases of this kind, the amount of the recovery is determined and ascertained by recurring to the prime cost, in the usual manner. When the policy is a valued one, and the assured, on the trial, shows an interest only in a part of the subject insured, as, for example, an eighth, a fourth, or a half, he will recover an eighth, a fourth, or a half of the valuation in the policy, and a greater or smaller proportion of such valuation, according to the quantum of interest proved. It is supposed, that in the case of Post et al. v. The Phœnix Insurance Company, (10 Johns. Rep. 79.) a different rule was adopted; but on an examination of that case, it will, I think, be found fully to support the principle which I have attempted to establish. There one fourth only of the ship was insured, and the court held that the valuation applied to the interest insured, (namely, one fourth part,) and not to the whole of the ship. If it had appeared in this case that the valuation had been applied to such part of the vessel only as the plaintiffs owned, being a moiety, another question would have been presented, which it is not necessary here to examine. But there cannot be a doubt that the valuation applied to the whole ship, and for the same reason that the recovery in the case last mentioned was for the whole value in the policy, it can, in this casev be only for a moiety. The case of Rising v. Burnett, before cited, for another purpose, seems also to bear upon this point. It was this: the plaintiff was one of four part owners of a ship, and each insured the freight, without mentioning that it was only a share of the freight that he was interested in; it was objected on the part of the defendant, that the plaintiff should have alleged his interest according to the truth, and not in that general form ; that the register of the ship, which was produced, was conclusive evidence as to the persons who were owners, and of their" respective shares, and the register showed that the plaintiff was only owner of the fourth part. Mr. Justice Bui ler, who tried the cause, held, that this being an open policy, the plaintiff might recover according to his interest; and lie had a verdict accordingly.- Marshall, in a note to this case, ob> that if it had been a valued policy, it would have made no difference, for the insurer may dispute the amount of the interest of the insured if it be overvalued, as well" in an action upon a valued policy, as upon an open one. The reason he gives why there would not have been a difference when ap« plied to a case of an overvaluation, is, "undoubtedly, a sound one; but, in a case like the present, where the insurance and the valuation (which is a fair one) are upon the whole ship, this reason would not hold, because here is no overvaluation. And the true reason why there can be no difference between an open policy and a valued one, in cases circumstanced like the present, will, I think, be found in the remarks which have already been made.

As the defendants, however, have received the premium upon the whole amount of the sum mentioned in the policy, it follows there must be a return of one half, which, in the adjustment hereafter to be made, according to the stipulation in the Ajease, must be allowed the plaintiffs.

Judgment for the plaintiffs, accordingly.

* Marsh. 682. Lawrence v. Vanhorne, Caines' Rep. 276 284. per Radcliff, J.

† Post and others v. Phoenix Ins. Co. 10 Johns. Rep. 79.

|| 2 Taunt. Rep 416.

* Marsh. 105. 812. 2 Mass. Rep. 365.

† 5 Term Rep. 709. Marsh. on Ins. 115. 116.

‡ 7 Johns. Rep. 522. 2 Johns. Rep. 346. Dall. Rep. 421. 463.

§ Marsh. 150.

* 3 Burr. 1394, Marsh. 317.

† 1 Bos. & Pull. 316.

‡ 4 Dall. Rep. 424.

§ Marsh. on Ins. 730.

(a) By the decision of the court of K. B. in Horneyer r. Lushingtori, (15 East’s Rep. 46.) this question, which was again hrought hefore the court, was finally settled.''

Case Details

Case Name: Murray v. Columbian Insurance

Court Name: New York Supreme Court

Date Published: Aug 15, 1814

Citation: 11 Johns. 302

Court Abbreviation: N.Y. Sup. Ct.