Indianapolis Insurance v. Mason

Hanna, J. This was a suit by the company, as assignee of one Temple, upon three promissory notes for about 270 dollars. The complaint is in the usual form. The defendants answered that the plaintiffs were indebted to them in the sum of 999 dollars, 99 cents, on a policy of insurance issued by said company to the defendants, by which the plaintiffs insured to the defendants the sum of 1,309 dollars, on one hundred and eighty-seven tons of hay, at 14 dollars per ton, on board of a flatboat, from Lawrenceburgh to New Orleans, &c.; and that in pursuing said voyage, by a peril of the river, said boat ran aground and was stranded, whereby the said boat sank and became partially filled with water, and the hay thereby became wet and damaged to the amount of 500 dollars; that the boat was so damaged that it could not be raised, nor could it proceed further, whereby it became necessary for the defendants, in order to get said cargo to the port of destination, to ship it in a steamboat, &c., which was done, the cost whereof was 1,996 dollars, 20 cents, which was paid by defendants, and which was necessarily and unavoidably paid out and expended by defendants, &c.; that the defendants notified the plaintiffs of the extent of their loss, &c., and claimed one-half thereof from said plaintiffs, a like risk having been taken by the Rising Sun Insurance Company. And the defendants offered to set off, and allow to the plaintiffs, enough to satisfy the notes mentioned in the complaint, and prayed judgment for the balance, &c. The reply admitted the execution, &e., of the policy, but denied that any liability accrued under it. Trial by the Court, and finding, which, upon request of — 174 — the plaintiffs, was reduced to writing, and is as follows, to-wit: «1. That the said flatboat and cargo were owned by the defendants on the 22d day of December, 1855; that the cargo consisted of one hundred and eighty-seven tons of hay; and that the defendants, after the making of said policy of insurance, on said day, started with their said flatboat and cargo from the port of Lawrenceburgh, Indiana, to the port of New Orleans, Louisiana. “ 2. That the said boat was properly manned and equiped agreeably to the requirements of said policy of insurance, and that whilst she was pursuing her voyage, and on the the night of the 1st day of January, 1856, said boat was, by a peril of the river, run aground and stranded, and in a short time sank to the bottom, by reason whereof a portion of the hay became wet, and was damaged to the amount of 429 dollars, 67 cents. “ 3. That the said vessel thereby became so injured that the defendants could not pursue their voyage with it. “4. That the defendants, for the purpose of saving the cargo, and conveying so much thereof as was not in a perishable condition to the port of destination, laid out and necessarily expended the sum of 1,766 dollars, 20 cents, being 10 dollars a ton on the cargo so forwarded to the port of destination from the place of disaster. “5. That the defendants were the owners of the flatboat, and were themselves shipping the said hay, and had incurred the ordinary expenses of transporting the hay to the port of New Orleans, in the equipment of said flatboat, and in the employment of a pilot and hands at the time of the said accident. “ 6. That the ordinary cost of shipping hay from Lawrenceburgh aforesaid to the said port of New Orleans was, at the time of the accident, six dollars a ton in flatboats. “7. That for the labor, &c., of the defendants, in the preservation of the cargo, after the accident, the underwriters ought to pay to the defendants the sum of 125 dollars, 50 cents. — 175 — “8. That the plaintiffs had due notice of the accident, 1 and were furnished with the proper preliminary proofs by the defendants. “ 9. That the quantity of hay shipped by the defendants, to the port of destination, from the place of the accident, is one hundred and seventy-six tons and sixty-two one hundredths of a ton, for which the said defendants paid the shippers, as freight, the said sum of 1,766 dollars, 20 cents. “ Whereupon, the Court doth find for the defendants in the sum of 380 dollars, 64 cents.” No question is made upon the sufficiency of the finding under the statute, by brief of counsel; we shall, therefore, consider that point waived under the 28th rule. The statute makes it the duty of the Court, when either party requires it with a view of excepting to the decision, &c., to “first state the facts in writing, and then the conclusions of the law upon them, and judgment shall be entered accordingly.” 2 R. S. p. 135. Looking at this finding alone, we are but dimly apprised of the facts and conclusions of law upon which the Court finally determined that the defendants were entitled to a judgment for the sum named. But there is a bill of exceptions, taken by the plaintiffs, in pursuance of this statute, we suppose, which states that the Court found for the defendants 651 dollars, 58 cents, “as for the amount due under said policy and the answer herein,” and entered judgment for 380 dollars, 61 cents, being the difference betwen that sum and the notes sued on, &c.; and “said plaintiffs excepted to the finding and entering judgment against said plaintiffs, in favor of said defendants, for 429 dollars, as and for the alleged amount of loss upon said hay; and also for the sum of 748 dollars, as and for the extra freight upon said hay, and to the opinion of the Court in adding said sum of 748 dollars, the extra freight, to the other amounts found by the Court, in order to make up the 20 per cent., in the said policy conditioned.” This explains that which could but imperfectly be understood, in looking at the written finding alone, to-wit, that the Court found that the plaintiffs should pay the one176 half (leaving the other company to adjust the other half) of the damage, the extra freight, and the expenses in recovering, &c., and deducting therefrom the notes. 0 , There was no claim for damage to the boat. There is a clause in the policy as follows: “ Touching the perils which the said insurance company are content to bear, and take upon themselves in the premises, they are of the rivers, fire, jettisons, enemies, and overpowering thieves (but no other thieves); provided, that the insurers shall not be liable, except in cases of general average, for any loss or damage on hoop or sheet iron, wire, tin plates, grain, seeds, corn-meal, paper, paper hangings, books and stationery, pictures, oil-cloths, musical instruments, cheese, salt, hides, hay, hops, fruits, vegetables and roots, carriages and household furniture, furs, skins and peltries, unless it amount to 20 per cent, on the aggregate value of such articles. Nor for loss or damage on flax, hemp, hempen yarn, bale rope, cotton bagging, leaf tobacco, cigars, coffee, sugar, rice, bread and nuts, or any other property, unless it amount to 10 per cent, on the whole value at risk, exclusive of all charges and expenses incurred for the purpose of ascertaining and proving the loss.” The actual damage, as found by the Court, to the hay, being less than 20 per cent., the first question we are asked to determine is, whether the plaintiffs are responsible for any of the expenses incurred after the disaster; and, if so, how much? By a clause in the policy, tlie underwriters were, to a certain extent, liable for expenses, &c., in saving cargo, &c. It is as follows: “ And in case of any loss or misfortune resulting from any peril insured against, it shall be the duty of the party insured, his, her, or their agents or assigns, to use all reasonable and proper means for the security and preservation, relief and recovery, of the property insured, to the charges whereof the said company agrees to contribute, in proportion as the sum herein insured bears to the whole sum at risk; and it is mutually agreed that the acts of either party, — 177 — or of their agents, in securing, preserving, relieving, and recovering the property insured, shall not be considered or held to be either a waiver or an acceptance of an abandonment.” It is not, therefore, necessary for us to decide whether the insurers would have been liable without this clause; but as to this, see 3 Kent’s Comm., 8th ed., p. 419; 2 Phil. on Ins. § 1777; 2 Arn. on Ins. 953; 4 Wend. 33. The Court found that the underwriters were liable for expenses, &e., 125 dollars, 50 cents. As this finding is general, as to the liability of the underwriters, we suppose it is proper for the plaintiffs herein to be charged with the one-half only. This, it appears to us, under the circumstances, the plaintiffs are liable for, without reference to the liability for the actual loss to the article insured. The Court having found that the vessel was so disabled as to render it impossible to transport the cargo on her to the port of destination; and that there was necessarily expended by the defendants, in forwarding it in a substantial vessel, extra freight to the amount of four dollars per ton— the question arises, whether, upon this insurance of the cargo, against perils of the river, the insurer was liable for the difference in the rate of freight. It is stated by a reputable author upon maritime insurance, that the rule in France is, that the merchant should bear this extra freight, whenever it is for his benefit that the goods should be so forwarded; and in such case, the same is to be settled as an average loss, by the underwriters, on the goods; and that ^the rule is the same in the United States. 2 Arn. on Ins. side page 960.—2 Phil. on Ins. § 1459. And see, also, 1 B. Mon. 339, 343; American Ins. Co. v. Center, 4 Wend. 45; Mumford v. The Com. Ins. Co., 5 Johns. 262; Searle v. Scovell, 4 Johns. Ch. 218; Dodge v. The Marine Ins. Co., 17 Mass. R. 471. But the appellant argues as follows: “ The loss, in this case, was less than 20 per cent, on the value of the hay — that is, the damage to it was less than that. The subject insured, and all incidental losses, stand or fall with the principal loss; and as, under the policy, there can be no recovery for the principal loss, it not amounting to 20 per cent., there — 178 — can be none for incidental losses and expenses.” As we have already intimated, we think the plaintiffs are liable, under the special clause of the policy, to contribute to the expenses for saving the cargo; and the authorities referred to, appear to fix a liability for the extra freight, unless the position of the plaintiffs, above quoted, is correct. In this connection, we should consider another clause of the policy, as follows: “ And in case of disaster, the insured, his, her, or their agents or assigns, shall not sell the property insured (except at the port of destination), without express authority from the insurers, but shall forward it, if recovered, to the port of destination without unnecessary delay; provided, that the articles of cargo, which may be in a damaged or perishing condition, so as not to admit of delay, may be sold at public sale, at the nearest convenient market, for account and benefit of whom it may concern.” This clause appears to have been overlooked by the appellant, in the zeal with which the second proposition, above quoted, is urged, for he says, “ Nor had the underwriters anything to do with the fact, whether the hay was got to New Orleans before or after the river froze, or whether it got there in the winter or spring.” We think this clause made it the duty of the master to forward the cargo, unless he had express authority from the insurers to do otherwise, &c. And as the finding of the Court is, that the expenses were necessarily incurred, we must presume in favor of that finding, that there was no direction given by the company, and that the earliest, cheapest, and most convenient mode was adopted. This presumption in favor of the finding of the Court, that the expenses were necessary, is fortified by the fact, that the memorandum exempting the underwriters from accountability on certain articles named, unless the loss amounted to a certain per cent, of the value, is supposed to be inserted to cover the natural or unavoidable decay or deterioration of such articles. 2 Arn. on Ins., side page 852. Now, if hay would, between the ports of Lawrencebwrgli and New Orleans, deteriorate so rapidly on board a flatboat, as to render it doubtful whether a loss in its value of anything less than 20 per cent, was caused by — 179 — such deterioration, from inherent causes, or by the perils of the river, then it is manifest that if it remained long in a stranded boat, or upon an exposed shore, the loss would have been great to some one. The finding would appear to repel the presumption, that it would have been to the interest of those concerned, to have suffered it to remain for any great length of time at the place of disaster. It cannot, under this finding, be controverted that it was placed in such exposed condition, in consequence of one of the perils of the river insured against; nor can any other just inference be drawn from this finding, but that the expense of extra freight was necessarily incurred, not solely to prevent the actual loss from exceeding 20 per cent., but to save the cargo, which otherwise might ultimately have been a total loss, from this peril of the river. Under the stipulations in this policy, and the peculiar circumstances of this case, indicated by the finding of the Court, we think the expense of extra freight was a direct consequence of a peril insured against, and was covered by the policy, without regard to the memorandum of percentage. 2 Phil. on Ins. § 1777. In Peters v. The Warren Ins. Co., 14 Peters, 99, the company insured Peters to the amount of 8,000 dollars, on the ship Paragon. The policy contained the usual risks, and among others, that of perils of the sea. It appeared that the ship, whilst pursuing her voyage, came in contact with another vessel and sank her; the result of which, and the proceedings instituted thereon, in a foreign port, was that the Paragon had to pay one-half the expense to repair her own injuries, to-wit, 400 dollars, and one-half the injuries to the other vessel, to-wit, 3,000 dollars; and the Supreme Court of the United States say, that, “Upon this. state of facts, the question arose, whether, in this case, the: contributary amount paid by the Paragon on account of the collision, was a direct, positive, and proximate effect from the accident, in such sense as to render the defendant liable therefor.” There was no question but that the insurers were liable for the injury to the Paragon itself. The Court held that they were also liable for the con.tri.bu — 180 — tion actually paid, as it was a consequence of the collision, anci a damage immediate, direct, and positive therefrom, and in no just sense a substantive, independent loss. 13 a Curtis, 370. So, in the case of Hall v. The Washington Ins. Co., Judge Story held the insurance company liable for damages caused by the negligence of the mates, &c., in suffering the ship Columbia (upon which the company had an insurance), to come in collision with the Ritchie, by which both vessels were injured, and for which the Columbia paid to the Ritchie a certain sum, for a compromise — not only liable for the damage to the Columbia, but for the sum paid on the compromise. He used the following language: “ The insurance does not attach merely to the extent of the direct injury sustained by the very thing insured.” “ Any and every expense borne by, and chargeable upon the owner of the thing insured, as a direct and immediate consequence of a peril insured against, is covered by the policy.” 2 Story, 176. See, also, Waters v. The Merchant’s Louisville Ins. Co., 11 Peters, 213; 12 Curtis, 404; Potter v. Ocean Ins. Co., 3 Sumn. 27; Id. 389. In the last-cited case, Judge Story used this language: “When the thing insured becomes, by law (that is, by the operation of some rule of maritime law), directly chargeable with an expense, &c., in consequence of a particular peril, the law treats such peril, for all practical purposes, as the proximate cause of such expense.” This position of Judge Story appears to be approved by an acknowledged authority on insurance. 2 Am. on Ins. (by Perkins) 767. And, also, by Chancellor Kent. 3 Kent’s Comm., 5th ed., 301, note. Having disposed of the question as to the amount of expenses for which the underwriters were liable, the next inquiry is, as to whether they were liable for the actual damage to the hay. That damage, as found by the Court, was less than 20 per cent., and could not, therefore, he held a correct charge, under the policy, against the insurers, unless the expenses necessarily incurred should be added thereto. This could not, according to the weight of authorities, be done. The rule appears to be settled. 2 Arn. — 181 — on Ins. 867.—Stevens on Average, 5th ed, 250.—Benecké Pr. of Indem. 472.—Brooks v. Ocean Ins. Co., 7 Pick. 259, 270.—3 Kent’s Comm., p. 282. T. D. Lincoln, - Smith, - Warnock, P. L. Spooner, and A. Brower, for the appellants (1). T. Gazlay and B. J. Spooner, for the appellees (2). Whether, in the establishment of this rule, the interest of all parties has been properly guarded, it is, perhaps, now too late to inquire. The Court below, therefore, committed an error in adding the amount found due from the underwriters, for recovering and forwarding the cargo, to the actual damage done to the article insured. That actual damage being less than 20 per cent., should, in accordance with the beforementioned rule, have been excluded. Per Gwriam. — The judgment is reversed with costs.