Marine Fire Insurance v. Burnett

Willie, J. The judgment of the court below is sought to be reversed upon the following grounds: First, because it is said there was an express waiver of insurance on the part of appellee; second, because no return of the cotton claimed to have been insured was made to the insurance company, as required by the policy; third, because the steamer upon which the cotton was shipped was not seaworthy, both at the time of its shipment and of its destruction by fire. As to the first ground, the waiver of insurance depended upon whether or not the words “ no insurance, ” or their equivalent, were written upon the face of the bills of lading. These bills were made out in triplicate, one copy being intended for the shipper, one for the consignee, and one for the carrier. Upon the copy retained by the steamer, and upon that delivered to the consignee, the above words, or their equivalent, were written by the clerk of the steamer, whilst upon the copy delivered by him to the shipper no such waiver apjiears. The clerk swears that these words were written by him upon the copies above mentioned by order of the shipper’s agents; the appellee proves by these very agents that no such order was given; that the insurance was not waived, and that the act of the clerk was not authorized by them, or binding upon their principal. It was a case of direct conflict in testimony, which it was the province of the jury to reconcile, if possible; and if this — 443 — could not be done, then it was their duty .to give credit to such of the witnesses as seemed best entitled to it. They have chosen, in this instance, to believe the plaintiff’s witnesses as to this fact, and. we do not feel authorized, under the constant rulings of this court, to disturb their verdict on this account. Upon the first objection taken, therefore, the judgment should not be reversed. The insurance not having been expressly waived by order of the appellee, were his rights forfeited by a failure to make the return required by the policy, or rather by a failure of his consignees so to do ? The policy required that Dean, Handle & Co., consignees of appellant’s cotton, shouldmake a true return, on or before the last day of every month, of all cotton covered by the policy. It was established by proof at the trial, that this was not intended as a limitation for the return of all cotton shipped to Dean, Handle & Co. during the month, which was covered by insurance, but of, all such insured cotton for which they had received bills of lading. And this is the. only reasonable interpretation which can be given to this provision of the policy. Dean, Handle & Co. looked alone to the bills of lading received by them, to ascertain whether or not the cotton receipted for in such bills was covered by insurance or not. If they contained no words showing a waiver of insurance, the cotton was reported to the insurance company as covered by the open policy, and this report was made on or before the last day of the month during which the hills of lading were received. If the words “no insurance” appeared upon ■ the face of such hills, no return of the cotton was made to the company. The consignees’ bills of lading, in this instance, were forwarded to them on the same steamer which carried the cotton, and the shipper was induced by the clerk to believe that this would prove the most expeditious method of getting them to their destination. The clerk, without any authority, it seems, wrote upon them the words “ no insurance,” or their equivalent. They were received by — 444 — the consignees in this condition, and they, not knowing the true state of the facts, did not include the cotton in their monthly return to the insurance office. It was precisely as if no hills of lading for this cotton had been received by the consignees. As we have already stated, they looked to these bills for information as to whether the cotton described in them was insured or not. It was from the time that such information was received that the limitation as to the monthly return commenced to run. When these bills represented the matter falsely the return was due, not during the month in which they were received, but the month in which correct information as to the facts was conveyed to the consignees. But in this case no regular and formal return of the cotton was .ever made to the insurance company, nor do we think that such a return was necessary under the circumstances. The consignees could not state with certainty that the cotton was covered by the policy, even after they had been informed of the facts of the shipment by the owner, and had seen the bills of lading which were delivered to him. There was a conflict of statements about the matter, and the bills of lading also disagreed, and hence the consignees could not report in the usual absolute and unqualified form. All that they could report to the company was the fact, that there was such a conflict and disagreement, and that the owner would assess a claim against them for one-half of the value of the cotton destroyed. This information was conveyed to the company in substance by one of the firm of Dean, Handle & Co., and we think this all that was necessary under the circumstances. But, thirdly, appellants say, that they are not liable, because the boat upon which the cotton was shipped, the “Betty Powell,” was not, at the time of the shipment and of the loss, in a seaworthy condition; and this because it was not under command of a competent master, and was not furnished with a sufficient crew. — 445 — It is a well-settled principle of law, that in the ordinary policies of marine insurance, whether the same be upon the ship or its cargo, there is an implied warranty that the vessel shall be seaworthy at the commencement of the voyage insured. (1 Arn. on Insur., 652; 1 Phil. on Insur., § 695; Warren v. United Insurance Company, 2 Johns., 231; Taylor v. Lowell, 3 Mass., 331.) “And it is also well settled, that the want of an experienced master, or of a competent crew, will render a vessel unseaworthy.” (Copeland v. New England Insurance Company, 2 Mass., 432, 444, 445; Silva v. Low, 1 Johns., 198.) It is equally well established, that this implied warranty “ may be modified or superseded by express agreement, as, for instance, where by the policy the ship is admitted to be seaworthy.” (1 Arn. on Insur., 661; Parfitt v. Thompson, 13 Mus. & Weis., 395; 1 Phil. on Insur., § 698.) We are relieved in this case from a critical examination into the testimony for the purpose of ascertaining whether or not the Betty Powell was seaworthy at the commencement of the risk and at the time of the- loss, because we believe that the implied warranty was waived by the terms of the policy itself. The open policy upon which this suit is founded covers one-half the value of shipments to Dean, Dandle & Co. for sale, or in which they may have an interest, on board all steamboats or vessels approved by the company. This condition, that the boats or vessels are to be approved by the insurance company, is not found in the ordinary marine policies, and must have been inserted in this one for some special purpose. The approval contemplated by the policy must have been with respect to the fitness of the vessels to convey produce to Galveston from the ports where the risk was to commence, or, in other words, as to their seaworthiness for such voyages. Ho other reasonable construction can be placed upon the words used, and this is shown to be their true meaning by the — 446 — testimony of Captain J. G. Haviland, inspector for the underwriters; for his certificate in the present case was as to the fitness of this steamer to carry produce. What could have been the object of the company in having this inspection made and certificate given to vessels found worthy, and in stating that they would insure shipments upon such vessels, and such only, unless they intended thereby to take upon themselves the burden of warranting their seaworthiness, or, in other words, to dispense with such warranty on the part of the assured? It was as if they had said,-in so many words, “We have examined this vessel, and find her well suited to convey cotton to Galveston; ship your cotton on board of her, and it will be "covered by our policy of insurance.” The duty of the assured to see that the vessel upon which he ships is seaworthy rests upon the ground that he has the right of selecting such vessel as he may choose for that purpose. He is required to select such as are capable of making the voyage against all the ordinary obstacles to water navigation. By the above condition of the policy the underwriters deprive the assured of -this privilege, and reserve it to themselves, requiring the assured to be governed by their judgment as to what steamers or vessels he shall use in the transportation of his produce. They must take the right with all its consequences, and the principal one of these is the duty of selecting a seaworthy vessel, or at least they should be regarded as relieving the shipper of his warranty in this respect. Any of the ordinary terms of a policy may be dispensed with by special agreement between the parties. (Parks v. The General Interest Assurance Company, 5 Pick., 34.) And we think that, if the above condition was inserted in the present policy for any purpose, it was to limit the responsibility of the company to shipments upon vessels which they had ascertained to be seaworthy, and thus to relieve the assured from any warranty in this respect. If it were not inserted for this purpose, then it is an unneces — 447 — sary clause, and the policy would amount to the same thing without as with it. In accordance with this view was the intimation of the high court of errors and appeals of Mississippi, in the case of the Mississippi Insurance Company v. Stanton, 2 Smedes & Marsh., 340, that advertising to insure goods upon certain enumerated boats would amount to a waiver of the implied warranty of seaworthiness. The only question, then, for us to consider is, was the Betty Powell a steamer approved by the insurance company for the shipment of cotton to Galveston from ports on the Trinity river ? The testimony of Captain Haviland, who inspected her for the underwriters at Galveston, on this point, is, in substance, that he examined her in March, and gave her a certificate of fitness to convey produce, &e.; that this certificate was to hold good during a certain period of time, and the continuance of the like good condition of said vessel, and while under command of her then master; that she had such a certificate when she left Galveston to go up the Trinity; that he would not give' a certificate to a vessel with an insufficient crew; that he, as such inspector, examined vessels from time to time, and, if he found one in an unseaworthy condition, revoked their certificates, but had not revoked his certificate to the Betty Powell. There can he no doubt, then, but that at the time of her departure from Galveston on her voyage up the Trinity, the Betty Powell was a steamer approved by the company. But it is said that the certificate was only as to her condition at the time of the inspection, and availed only so long as she remained in like good condition. The expression “steamboats or vessels approved by this company,” evidently meant approved after examination by the inspector of the company, for no other method of approval is established by the evidence. It is also plainly deducible from the testimony of Haviland, that his certificate of approval given to vessels found to he worthy was — 448 — their voucher of approval by the company, until the same should be revoked upon some future inspection by him. This certificate continued in force, and bore witness to the fact that the vessel to which it belonged was an approved vessel of the underwriters, until canceled by the same authority that gave it. All, therefore, that the shipper was required to do, in order to have his produce protected by this policy, if consigned to the proper parties, was to see that the steamer upon which he shipped it carried with her this evidence of approval on the part of the underwriters. It is not shown by the evidence that the company were in the habit of having vessels examined at any intermediate stage of their voyage, but to have them inspected, from time to time, at Galveston; and it was to the result of this last inspection at that place that the shipper must look in order to ascertain whether or not any vessel or steamer was approved, as provided by the policy. To require him to see that such steamer was in as good a condition as at the time she received the certificate, would be to impose upon him a gréater burden than if no such clause were in the policy. In ordinary cases of marine insurance, the assured is bound only to see that the ship is seaworthy for the proposed voyage. Under the construction contended for by appellants, he would be compelled to put her in the same condition as when the inspector of the company examined her. At that time she might have a larger number of officers and hands than was necessary to man her for the voyage, yet the assured would be forced to see that she was thus amply supplied when his goods were shipped, in order to get the benefit of the policy. What would be the use of the certificate and the agreement of the company to insure upon vessels approved by them, if the assured are accountable for their seaworthiness at the intermediate ports. The assured, by shipping upon such approved vessels, would be relieved of no obligation to which he would have been subjected had he shipped — 449 — "by any other vessels. In fact, as we have just seen, he would have been subjected to an additional burden by so doing. Again, if the certificate given by the inspector was good only at the time of leaving that port, it would he of no service or use whatever; for the policy proposes to insure shipments from distant ports to Galveston, and such certificates could only be of use in case of cargoes sent from Galveston to some other port. Our construction of the clause of the policy above cited, taken in connection with the survey and certificate of the inspector, is, that this certificate was the evidence of approval contemplated by the policy; that the underwriters selected their vessel, had her surveyed and approved for the voyage before she left Galveston, and sent no one with her to see that she was in like good condition at all intermediate ports. The inspector could therefore give a certificate in no other form than that stated in the evidence; and that, when the words “ approved by this company” were used, they meant approved according to the terms of the certificate given by the inspector; that they thereby held such vessels out to the world as approved by them, and thus induced shipments upon hoard of them, with the understanding that such shipments would be covered by their open policy of insurance. And we think that the Bettie Powell, under this construction of the policy, was fully proved by the evidence to be a steamer approved by the insurance company for the transportation of produce to Galveston from the different landings on the Trinity. And this, too, seems to have been the construction of the underwriters themselves; for they paid all other losses by the Bettie Powell without objection, and seem to have refused payment in this case only on the ground, that insurance was expressly waived by the underwriters upon the bills of lading. We are of opinion therefore that, upon all the points — 450 — made by the appellants, the judgment of the court helow was correct, and it is Affirmed.