Merchants' Insurance v. Clapp

Wilde J. delivered the opinion of the Court. This action is defended on the ground that the policy never attached, so [63] that the e being no risk, there was no consideration for the premium notes ; and this principle of the law of assurance is not disputed. The question therefore is, whether under the circumstances reported, the policy ever took effect so as to charge the underwriters in case of loss. If it did, it is clear that the whole of the premium should be recovered. It is stated that the vessel sailed from V era Cruz for Boston on the 16th of September, 1827. This was a different voyage from the one insured, which was from Vera Cruz to Cam-peachy and Laguna, and thence to the United States. This fact has not been insisted on as a deviation, or as a commencement of another voyage ; and therefore we suppose the defence is not intended to be rested on either of these grounds. If any such objection had been made, it would probably have been obviated by subsequent events in connexion with the alteration and enlargement of the policy, which might operate substantially as a new insurance, and also for other reasons, which will be hereafter noticed. The vessel leaking, she put into Campeachy, where she arrived the 26th of September, and there she was unladed and caulked and her cargo reladed, and she sailed from thence to Laguna, where she arrived the 27th of October and took in a quantity of logwood, and sailed from thence on the 18th of November for New York. She again leaked and put into Campeachy, arriving there the 21st of November, and on the 29th again sailed for New York; but finally was obliged to put back a third time for Campeachy, for the safety of the vessel and the lives of those on board. Heie the vessel was again unladed, and on a survey, her bottom being found perforated with worms so as to make her entirely unseaworthy, she was planked anew in her bottom, and the cargo was sold to defray the expenses of repairs. After being thoroughly repaired, she sailed again for Laguna, where she arrived the 21st of February, and then took in another cargo of mahogany, with which she sailed for New York, and arrived there in safety. The question is, whether at any time during these disastrous voyages the property insured was at the risk of the underwriters on this policy. It certainly may be doubted whether the vessel was sea [64] worthy at any time before .her last repairs at Campeachy , for she leaked so badly on all the previous voyages, without any accident or stress of weather, that the leakage can be ascribed to nothing but an unsound state of the vessel when she sailed from the several ports. But she was seaworthy when she last sailed from Campeachy, and continued so when she arrived at Laguna and sailed from thence the last time for New York ; so that she sailed at the risk of the underwriters, if by the legal effect of the policy the contract covered any part of this last portion of the voyage. By the original policy, the vessel was insured at and from Vera Cruz to Campeachy and Laguna, both or either ; she had therefore a right to go from Campeachy to Laguna. By the indorsement on the policy, she had a right to go back from Laguna to Campeachy ; and from thence she was to proceed for her port of discharge in the United States ; and she sailed from Campeachy accordingly, bound for New York. But the vessel continuing to leak, she was obliged to return to Cam-peachy for the safety of the vessel, and the lives of the crew. And this clearly was no deviation ; so that she was rightfully at Campeachy the last time. There she was thoroughly repaired; and it was agreed she was seaworthy when she last sailed from that port. And if she had taken in any cargo after these repairs, it is very clear that the policy would have then attached. But it appears, that before these repairs, the cargo was taken out and sold, and it does not appear that a new cargo was purchased until the vessel arrived at Laguna; and as the going to Laguna was a deviation, the policy could not attach there. Then admitting the vessel to have been unnavigable during the portion of the voyage previous to her final repairs, the plaintiffs would not be entitled to recover, unless the policy had before attached at some one of the ports in the course of the voyage. It is however admitted, that according to the case of Taylor v. Lowell, 3 Mass. R. 331, the policy did attach at Vera Cruz under the original policy. And it attached again at Campeachy under the indorsement enlarging the policy. So that the plaintiffs have a right to recover on both notes, if the case of Taylor v. Lowell can be supported. [65] The defendant’s counsel, however, by a very able argument, has attempted to impugn the authority of that case, and to show that it cannot be maintained upon the well established principles of commercial law. But it must be remembered, that the circumstances under which that case was decided were such as to give to the judgment of the Court the greatest weight of judicial authority. It was a case of great importance. It was carefully and fully investigated. The defendant himself, against whom judgment was rendered, and his counsel, were lawyers of the highest eminence. The case was twice argued ; and it was decided by judges pre-eminent for their wisdom and learning, and distinguished by their familiar knowledge of commercial law. Mr. Justice Sewall, who delivered the opinion of the Court, carefully examines the authorities and fully considers the principles of the law of insurance as applicable to the point in question. And the unanimous decision of the Court after such an investigation, must be admitted to be of the highest authority. But if it were otherwise, and the reasons given for the decision were as unsatisfactory as they appear to be to the defendant’s counsel, still the decision would be binding on the present parties. It is now twenty-four years since the case of Taylor v. Lowell was decided, and the correctness of the decision has never before been called in question. All contracts of assurance during that time, must be presumed to have been made in reference to the law as settled in that case, and the premiums to have been regulated accordingly. A stronger ground of presumption as to the intention of contracting parties, cannot be imagined. If underwriters had been unwilling to assume risks, according to the law as laid down in that case, no doubt the form of policy would have been altered, so as to express the intention of the parties clearly, and to exclude the risk. We must presume, therefore, as this was not done, that all parties acquiesced in the law. But the reasons given for the judgment in the case of Taylor v. Lowell, seem to us entirely satisfactory. “ The seaworthiness of the vessel,” as Mr. Justice Sewall remarks, “ her complete capacity to perform the voyage insured from the port of lading, is not material to the portion of the risk [66] incurred at the port before sailing. A loss or damage occasioned by the defect of the vessel, whether occurring in port or at sea, is not chargeable to the insurer. ■ A possible deficiency of the vessel while in port, a necessity of repairs, some delay for the purpose, are events unavoidably contemplated by the parties in every contract of insurance.” And, as Lord Kenyon says, in the case of Forbes et al. v. Wilson, Park on Ins. (7th ed.) 344, “ from the nature of the thing, the ship, while at the place, probably must be undergoing repairs.” It has been argued, that in the contract of insurance there is an implied warranty that the vessel shall be seaworthy at the time of her receiving her cargo. This argument was fully considered and satisfactorily answered in the case of Taylor v. Lowell. The implied warranty is the same in an insurance ou goods and freight, as it is in an insurance upon the vessel. It is, that the vessel shall be in a navigable state at the time she sails.1 *This is a reasonable construction of the implied warranty, but it would be most unreasonable to extend it back to the time when the vessel is in port. Many repairs may be made during the lading of the cargo ; and to require the vessel to be completely repaired, before she could take on board any part of her cargo, would occasion much unnecessary delay and expense, and could be of no possible benefit, that I can conceive, to the underwriter. On every point, therefore, we think the case of Taylor v. Lowell was decided on sound principles, and it is decisive in the present case.2 Defendant defaulted. Footnotes [1] See Guarrigves v. Coxe, 1 Binn. 592. [2] See Paddock v. Franklin Ins. Co. post, 232; 1 Phill. on Ins. (2d ed.) 322, Deblois v. Ocean Ins. Co. 16 Pick. 308.