Reade v. Commercial Insurance

Van Ness, J. delivered the opinion of the court. There are two questions in this cause. 1. Was the going to sea through the Sound, under the circumstances of this case, a deviation ? And, 2. ,Are the defendants liable for the marine interest on the money borrowed on bottomry at Bourdeaux P There are two passages to sea from the port of New~ York; one by the Sound, and the other by the Narrows. The former has of late years been frequently pursued, but the latter is used in far the greater number of cases, and is the most usual and ordinary course for vessels, sailing from the port of New-York on a foreign voyage. In every contract of marine insurance, there is an implied condition on the part of the insured, that the ship shall proceed on her voyage to her destined port, in the shortest, safest, and most usual course. If this be not done, and the ship, without just and reasonable cause, leaves the regular and customary track, it is a deviation, and from that time the policy is at an end, and the insurer is discharged from all subsequent responsibility. If there were no evidence in this case to justify the departure of the ship from the most usual and ordinary course, we are inclined to think that here would have been a deviation ; but under all circumstances, we consider that there — 359 — was a just and reasonable ground for such departure, though there may not have been an absolute necessity for it. The ship was bound to a French port, having a number of French passengers on board, some of s^hom were sent home on account of the French government, and part of her cargo was colonial produce. At the time she sailed, the Cleopatra, and other British ships, were off Sandy-Hook, who captured several American ships, and there was considerable apprehension on this subject among the merchants. Under these circumstances, the owners were justifiable in instructing the captain to go by the way of the Sound, and there was no occasion to apply to the underwriters for their • consent to a measure so obviously the dictate of prudence, and for the benefit of all concerned. It is no deviation to go out of the ordinary track to avoid danger. (Marshall, 408.) That in this case, there was danger, not only of detention, hut even of capture and condemnation, cannot reasonably be doubted. To avoid this danger, it was a prudent exercise of the discretion resting with the owners, to direct the master to leave the customary passage to the sea, and to pursue another, not new and unexplored, but occasionally used, and in which there were regular pilots. The owners, in giving these instructions, could have no sinister views, and it is not pretended but that they acted with the most perfect good faith, for the benefit of all parties interested, and with the sole view to conduct the ship and cargo by the safest course to her port of destination. It has been said, that in cases where a departure from the usual course is excusable, for reasons growing out of the circumstances existing at the time, the insured have a right to the opinion of the master, and to the uncontrouled exercise of his discretion. This is true to a certain, extent: As, where the'voyage has been commenced, and when the circumstances which render such a departure expedient, are unknown to the owners, and when, corise — 360 — quently, they could not form so correct an opinion as the master. Such was the case of Middlewood v. Blakes, (7 Term Rep. 162.) But when the departure takes place, 3s in the present case, where the owner is on the spot, and well acquainted with all the circumstances, and, in all probability, most competent to judge of their urgency and weight, there can be no use, neither is there any reason or necessity for consulting the master, or leaving the course to be pursued to his discretion. Whether the defendants are liable for the marine interest or not, for the money borrowed by the master at Bourdeaux, is the next question; and in the consideration of which, it is taken for granted, that the repairs of the vessel were rendered necessary by the injuries she had sustained in the course of her voyage, by the perils within the policy, and for which, consequently,, the insured are liable. The general power of the master to hypothecate the ship abroad, for the purpose of raising money necessary for completing the voyage, is not questioned, but it is objected in this case, that such right does not exist at the port of destination -r that there was no necessity for resorting to this mode of raising money; and that, at all events, admitting the right of the master in this case, still it was not so exercised as to subject the insurers to the payment of the marine interest. The only limitation of the master’s right to hypothecate the ship, in case of necessity, is, that it shall be exercised abroad, and not in the place where the owners reside. The reasons from which the origin of this right is deduced, seem to apply with as much force to the case where the necessity for exercising it arises at the port of destination, as at any other port into which the vessel may have been driven in distress. The only difference between the two cases is, that in the one, the necessity which justifies the exercise of the right, is .more palpable and manifest than in the other. Freight is frequently made — 361 — payable, and the insured commonly have a correspondent and credit at the port of destination, and while the captain can find resources from either of these, he would not have a right to pledge the ship. But it does not follow, from thence, that if the master does not receive freight, and cannot borrow money upon the credit of the insured, that he may not pledge the ship. The only and important inquiry must necessarily be, were the exigencies of the case such as to render a pledge of the ship indispensable, and that being granted, the right results of course, wheresoever the vessel may then be. Suppose, in the case of an insurance out and home, and the injury to the vessel happens at the port of delivery, or at sea, when the port of delivery is the nearest port into which the vessel can put, and that the freight is not payable until the ship’s return, and the master is unable to procure money for the necessary repairs, to enable him to complete the voyage in any other way than upon bottomry, what is he to do ? One of two things ; he must either pledge the ship, or give up the voyage. By doing the one he may, at a triSing loss to the underwriter, repair the ship and perform the voyage ; by doing the other, the underwriter may be subjected to a total loss. Abbott, Marshall, and Park, recognise the master’s right to borrow money on bottomry in s. foreign country, whenever it is essential to the safety of the ship and the success of the voyage : and the term “ foreign country” is used in contradiction to the place of the owner’s residence. (Marsh. on Insur. 638. Park on Insur. 413, 414. Abbott on Shipping, 118.) So also are the laws of the Hanse Towns, (art. 3.) and of Wisbuy, (art. 45.) See also the Marine Ordinance of France, (art. 17. and 19. book 2. tit. 1.) Upon principle, therefore, as well as authority, we are satisfied, that in cases of necessity, and when the master cannot otherwise procure the money, he may borrow it on bottomry, and hypothecate the vessel for the repayment of it, as well at the port of destination, as at any other foreign port. — 362 — But there are circumstances in the present case, which ought to induce the court to lean againpt rendering the insurers liable for the marine interest. The bottomry bond was given to the consignee of the ship, and of the plaintiffs’ part of the cargo. The consignee was the person to whom the master alone applied, and upon whom he relied, as he says, for every thing; and there is every reason to believe, that the necessity of repairs and of money for that purpose, was made known to the consignee upon the arrival of the ship. Notwithstanding this, he diverted the funds in his hands to other objects, and advanced his own money at an interest of 25 per cent. To render the insurer liable for marine interest, it qught evidently and clearly to appear, that there, were no other means of raising money, than by a bottomry bond. The conduct of the consignee is not free from all suspicion. If the master had pressed him to make the advances for bills upon the plaintiff, he might have agreed to accept them. It does not appear, neither can it be fairly inferred from the evidence, that the master ever attempted to obtain the money on the credit of the owners ; but on the contrary, it appears that he at once agreed, either to give the bills or the bottomry bond; and it is even doubtful whether the master had not himself the election to give the one or the other. The consignee did not advance the money exclusively on the engagement to give a bottomry. It was the duty of the master to have exhausted all other means of raising the money, before he could legally subject the insurer tp the payment of an extravagant marine interest. He did not do so, and it is questionable, whether this bond was valid, even as against the owners; but we are clearly of opinion, that the insurers- cannot be affected by it. The opinion of the court, therefore, is, that the marine interest must be deducted from the amount of the ver — 363 — ■diet, and that the plaintiffs must have judgment for the residue only. Thompson, J. not having heard the argument in the cause, gave no opinion. Judgment for the plaintiffs.