Mobile Marine Dock & Mutual Insurance v. McMillan

CHILTON, C. J. It is a rule of construction, settled by numerous authorities, that every usage of trade, which is so well settled, or so generally known, that all persons engaged in that trade may fairly be' considered as contracting with reference to it, is regarded as forming part of every policy designed to protect risks in that trade, unless by the express terms of the policy, or by necessary implication, such inference is repelled. — 1 Duer on Ins. 195, §§ 42, 43 ; ib. 265, §§ 60, 61,62; Arnould on Ins. (1850 edit.) p. 65 ; Hughes on Ins. 109-10; 1 Phillips on Ins. (edit. 1853) 19, et seq. The contract declared on is essentially a marine policy, providing for protection of goods shipped on board the Helen, upon a sea voyage, and against sea risks ; and there is nothing contained in this policy which, by a fair construction, can bo made to extend to and cover terrene risks after the cotton shall have been safely landed at the usual place of discharging her cargo by the vessel; unless, indeed, under the facts, we are required to hold that the port of New Orleans means the port at the city, and not the port which is known by the same name on Lake Pontchartrain, where the cargo was put on shore. It is conceded, that the policy is to be construed liberally for the benefit of the assured, and with a due regard to its design and object as an undertaking to indemnify.- — Kent v. Bird, Cowp. B. 585; Godsall et al. v. Boldero, 9 Bast, 72, 82; Hughes on Ins. 145, marg. page; — per Lord Ellenborough, in Bainbridge v. Neilson, 10 East, 144; Pelley v. Royal Exchange Assurance, 1 Burr. 349; Wolfe v. Horncastle, 1 Bos. & Pul. 322 ; Káins v. Knightly, Skinn. 55; 3 Saund. R. 200 a, note 1. “ It is certain,” said Lee, C. J., in Pelley v. Royal Exch. Ass., supra, “ that in 'construing policies, the strictum jus, or apex juris, is not to be laid hold on; but they are to be construed largely for the benefit of trade and for the insured. Nevertheless, as was said by Lord Ellenborough, O. J., in Robertson v. French, “ the same rules of construction which apply to all other instruments, apply equally to this instrument of a policy of insurance- — -namely, that it is to be construed according to its sense and meaning, as collected in the first place from the térms used in it, which terms are themselves to be understood in their plain, ordinary, and popular sense, unless they have generally, in respect of the subject99 matter, as by the known usage of trade, or the like, acquired a peculiar sense distinct from the popular sense of the same words; or unless the context evidently points out that they must, in- the particular instance, and in order to effectuate the immediate intention of the parties to that contract, be understood in some other special and peculiar sense. The only difference between policies of assurance and other instruments, in this respect, is, that the greater part of the printed language of them, being invariable and uniform, has acquired from use and practice á known and definite meaning, and that the words superadded in writing (subject, indeed, always to be governed in point of construction by the language and terms with which they are accompanied) are entitled, nevertheless, if there should be any' reasonable doubt upon the sense and meaning of the whole, to have a greater effect attributed to them than to the printed words, inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning, and the printed words are a general formula, adapted equally to their case and that of all other contracting parties upon similar occasions and subjects.” — 4 East, 185-36. The language in the policy before us, as we have said, provides against loss from certain perils, while the goods are in process of ■marine transportation. They are shipped on board the Helen, upon a voyage from the port of Mobile to the port of New Orleans, enumerating the perils and adventures usually inserted in marine policies'; and it fixes the termini of the risk, the point a quo being the port of Mobile, “ and to continue and endure until the said goods shall be safely landed at the port of Now Orleans.” We must not. confound the obligation of the insurer with that of the carrier. The boat, by the bill of lading, was obliged to have the cotton taken to the city, and the consignees' were not bound to receive it at the lake depot of the railroad; but -it by no means follows, that the insurance extends to this terrene transportation. According to its terms, it closes with the terminus of the voyage of the Helen after the goods shall have been safely landed. There is no proof whatever to show that such policies were regarded by merchants, insurers, or shippers, as usually embracing such [100] risks, and we bare found, no case which authorizes the extension of a marine policy to cover land transportation. Whether, indeed, it would be competent to extend the language employed in this policy, by proof of usage or custom, so as to make it cover losses after the goods had been safely landed in the usual way and at the usual place of discharging the cargo by the Helen, is a question of some difficulty, and one which we are not now called upon to decide. So far as the proof goes upon this point, it is adverse to the construction contended for by the assured ; two cases being shown where policies had been effected “ to JYew Orleans”, instead of the 11 port of JYew Orleans”, in which it was considered by the parties that the risk continued to the city; but in both of those, a greater premium was paid than required to insure to the “port of New Orleans”, as understood to be the point of discharging the cargo at the southern shore of Lake Pontchartrain. But we lay no stress on these cases as establishing a custom. We rest our decision upon the terms of the policy itself, considered, of course, with reference to what is usually done by such a vessel, with such a cargo, in such a voyage ; all which must be considered as forming a part of the policy, as much so as if inserted in it. — 1 Burr. 350; 3 Saund. 200 a, n. 1. Both the assurer and insured are chargeable with a knowledge of the course of this trade, and are presumed to contract with reference to it. — Noble v. Kennoway, Doug. 510; Salvador v. Hopkins, 3 Burr. 1712 ; Vallance v. Dewar, 1 Camp. 505, n. ; ib. 508; 3 ib. 200; 1 Taunt. 463 ; Selw. N. P. 963 ; 1 Arnould Ins. 43 ; ib. 66 ; Hughes Ins. 146, bottom page. The parties, then, knew that the Helen landed her goods at the port of New Orleans, on the wharf at. Lake Pontchartrain. They knew this vessel did not go to the city of New Orleans; — they insert no words in the policy making the liability of the insurance company co-extensive with that of the carrier, nor extending it beyond a “ safe landing of the goods” upon the termination of the voyage; no custom or usage is shown to extend the voyage, and of consequence, the risk, to the city of New Orleans; and such being the case, we should do violence to the terms of their contract to continue the risk after the voyage had terminated and the goods were safely [101] on land at the usual place of discharging them. The risk is at an end, whenever the goods can be considered as landed according to the usual course of business, at the accustomed port of destination, although they may never have been delivered into the hands of the consignees. — 1 Arnould on Ins. 437; Galliffe v. Bourne, 4 Bing. N. C. 314; same case, in House of Lords, 7 M. & Gr. 850. It follows from what we have said, that the court erred in the charges, which held the insurer liable until the goods were delivered to the consignee, or some one for him. So, also, in the qualification given to the charges asked, which assumed that the goods must be landed at the place where it is usual for the consignee to receive and take charge of them. , The delivery to the consignee, as well as the usual place where he was accustomed to receive and take charge of the goods, could not affect the liability of the insurer, so as to extend the risk beyond the terminus of the voyage. These were questions between the consignee, or owner, and the carrier. It was certainly competent for the parties to contract for covering losses which should come to the goods upon their marine passage and until safely landed, leaving their overland passage unprotected by the policy. This, we have held, was the effect of the policy before us; and as the terminus of the marine risk was not the terminus of the transportation contracted for by the carrier, it was erroneous to make the liability of the insurer depend either upon the delivery of the goods to the consignee, or at a place where he usually received and took charge of them. The next question which arises is, did the errors which we have noticed injuriously affect the rights of .the insurer. If they did not, we cannot reverse; for it is well settled, that an error which can do no injury, works no reversal. — Porter v. Nash, 1 Ala. 452 ; Caruthers v. Mardis’ Adm’r, 3 ib. 599; 9 Por. R. 403 ; Donley v. Camp, 22 Ala. 659; 8 ib. 737, 37. If the contract was entire — if, in other words, the engagement to safely land the 198 bales of cotton was not complied with until the whole were landed in safety, then the errors of the court worked no injury, since it is conceded that only 134 of the bales were landed, and these were consumed by fire before the others were put on shore. [102] Waiving the fact, that the first count in the complaint expressly states that the cotton was valued at f?50 per bale, and the statement contained in the bill of exceptions, that “ the plaintiff proved the contract of insurance with the defendant upon 198 bales of cotton, valued at §50 per bale,” &c. ; we think the contract must be regarded so far severable as to exonerate the underwriters for that portion which was safely landed. The contract is one of indemnity. The valuation is inserted by the agreement of the parties, that in case of loss, proof of value may be dispensed with. But whore the articles are separate, and each parcel is unaffected in value, whether considered separately or aggregately, there is no good reason why the failure safely to land one bale should make the underwriters liable to pay the aggregate value of the 198 bales. It could not be maintained that the underwriters would have been exempt from liability if the appel-lees, after effecting the policy upon the 198 bales, had only shipped 191, and these had been destroyed by some of the perils embraced by the policy. They could not be allowed to say, “ True, the loss has accrued by reason of a risk insured against; but the assured failed to ship the number of bales specified in the policy, and the contract was entire: wo must be liable for the 198 bales, or for nothing.” The rule is, that if less than the number specified in the policy are shipped, the assured has the right to demand a corresponding return of the premium. — 2 Arnould on Ins. 1227. We think the cases of Gracie v. The Marino Ins., Co., (8 Cranch, 75), and Gracie v. The Maryland Ins. Co., (8 Cranch, 84), fully sustain the view we have above taken. In the latter case, a part only of the cargo was landed, and the policy provided for the continuation of the risk “ until the said goods shall be safely landed,” &c. If no part of the goods could have been “safely landed” until the whole were landed, then, in that case, there would have been a total loss, and the assured would hate been unaffected by the warranty against particular average loss. But the court held otherwise, and discharged the underwriters, upon the ground that the loss was partial, a portion of the goods having been safely landed within the meaning of the policy, and hence the assured was affected by the warranty against particular average, [103] Wo have seen that the consideration for the insurance, the premium, is' susceptible of apportionment — to-wit, three-sixteenths on the value of the cotton shipped; and that each bale may be severed from the others without affecting its value. The true rule, then, in such cases, is to consider the contract as entire with respect to each measure, and not in respect of the whole lot. — Story on Con. § 24, n. p. 18; ib. § 21, et seq. The case of Gardner et al. v. Smith, 1 Johns. Cas. 141, is relied upon by the counsel for the appellees. In that, by the terms of the policy, the risk was to continue until twenty-four hours after the goods named in the margin were landed; the risk providing against seizure of the goods as illicit trade. A portion of the goods had been landed more than twenty-four hours, when the whole were seized as illicit. Justice Lansing said, “ The insurance being entire, we are of opin- ■ ion, that the risk continued on the entire goods, until twenty-four hours after all of them were landed.” Perhaps a distinction may be taken between the case cited and the one before us; but if it be parallel, we are not disposed to follow it. Nor are we alone in doubting its authority. An able writer upon the law of insurance does not “ hesitate to doubt it, and to state it as the better doctrine, that the risk terminates on each parcel' at the' end of the twenty-four hours after it is landed.” — See 1 Phillips on Ins. (edit. 1853), p. 539, § 972. After the best consideration we have been able to" bestow upon the case, we are satisfied the court below mistook the law in the charges which conflict wi th the views above expressed. The judgment is, therefore, reversed, and the cause remanded.