Robinson v. Manufacturers' Insurance

Shaw, C. J. Were this a common insurance on freight of ship Herald, in common form, valued at $ 5,000, on the loss proved, there would seem to be no doubt of the plaintiff’s right to recover. The term freight is somewhat equivocal, and has several meanings. It is sometimes used to describe the compensation for the carriage of goods, sometimes for the hire of a vessel, and sometimes it is used in a loose sense to signify the goods or property carried. It is never, however, used in the latter sense, when intended to describe a separate subject of insurance ; but is then used in contradistinction to ship and cargo, to designate the [146] compensation to be paid to the ship-owner, for the use of his vessel, either for the carriage of merchandise, or for the hire of the vessel in whole or in part. It is also held, that a ship-owner may insure the profit and benefit to be derived from the employment of his own ship, for the carriage of his own goods, under the name of freight. We are then to inquire, what is the effect of the particular words used in this policy. The words are, “ 5,000 on freight on hoard ship Herald, at and from Cadiz to one port in Sicily, and at and from thence to her port of destination, in the United States. Freight valued at $ 5,000.” There was an inception of the risk, by taking in some goods at Cadiz, though a small quantity, and by commencing the voyage to Palermo in Sicily, under a charter party previously entered into, for a freight from Palermo to New York. In general, the inception of a voyage, even in ballast, from one port to another to take a cargo, pursuant to a charter party, is an inception of the voyage on which freight is to be earned, and if the vessel is lost before arriving at the first port to take in the cargo, it is a loss on freight. Then the question is, what was intended by the words “ on board.” The sentence is obviously elliptical. Considering “ freight” as the hire or price to be paid for the use of the vessel, “freight on board,” is unmeaning. Something must be supplied. The defendants insist, that we must understand it, freight of property, when laden on board. But this is certainly not the necessary or most probable meaning. It may as well mean, freight of property “ expected or intended to be put on board,” or “ agreed to be put on board,” as in case of a charter party. By the defendants’ construction, both rights to freight could not co-exist, because no goods could be laden on board at Palermo, till after the voyage from Cadiz to Palermo had terminated. But we think it manifest from the valuation of the whole freight, as well from Cadiz to Palermo as from Paler mo to New York, that it was regarded by the parties as one entire subject of insurance, and that it was intended to cover all the freight of both voyages. And this is perfectly consistent [147] with the words of the policy, if we supply the ellipsis, which must be supplied with something, with the words, “ to be laden on board,” making it apply both to Cadiz and Palermo ; which is quite as consistent with the general purpose, and more consistent with the whole effect of the contract, than the words, “ when laden on board,” so as to prevent it from taking effect until the goods should be actually laden, or begun to be laden on board. It may be said that the words “ on board,” have, upon this supposition, no effect, and mean the same as freight of ship Herald. We think the meaning is nearly or wholly the same. Such being the intent of the contract, the freight expected on the voyage home might amount to something over $ 2,500, and the freight of the intermediate voyage appears to have been considered very uncertain. We therefore do not think the valuation was so great as to raise a suspicion of fraud. If the whole subject matter, intended to be included in the valuation, was not put at risk, then the policy must of necessity be opened, and it would not be consistent with the contract to permit the assured to recover the whole valuation. Forbes v. Aspinall, 13 East, 325. Wolcott v. Eagle Ins. Co. 4 Pick. 429. In the present case, the whole subject intended to be covered by the valuation, viz. the freight to be earned between Cadiz and Palermo, and between Palermo and New York, were put at risk. Had the eight coils of cordage been carried safely from Cadiz to Palermo, and no loss occurred on the freight home, the whole premium would have been due to the underwriters, and they would have been exempted from all loss. This was what they insured. It was lost; and we think they were liable according to the value agreed on by the policy. We think the assured cannot be in a worse condition than if their vessel had sailed in ballast from Cadiz to Palermo, to take on board a cargo in pursuance of a contract previously entered into to take a cargo from thence to New York, which would entitle the plaintiff to recover in case of loss.