China Mut. Ins. v. Ward

WALLACE, Circuit Judge. This is a writ of error by the defendant in the court, below to review a judgment for the plaintiffs, entered upon the verdict of a jury by the direction of the trial judge. The action was on a marine policy issued June 21, 1888, by the defendant, insuring the plaintiffs, for account of whom'it might concern, “$5,000 on advances on hark Victor at and from Yew York to Tampico, at and thence to Mini tifian, and at and thence to Yew York.” Inserted in the policy was a special clause, as follows: "This policy covers only 1ho ini mist of ihe assured in advances and ¿lis-, Inirsements, without reference to other insurance which may have been effected on the vessel, freight, or disbursements, free of general average, and liable for any loss which the assured may suffer in consequence of perils of the seas, whereby the value of the property pledged to cover the advances made is reduced below the amount of said advance's; the net amount realized from the sale of said pledged property, or, if not sold, its net value after the disaster, being deducted in all eases from the amount insured, in determining the amount of claim.” It appeared upon flu» trial that the plaintiffs had been, since 1882, the agents at Yew York city for the owner of ihe vessel, acting under a power of attorney authorizing them to sell, manage, direct, charter, and freight the vessel, and during the years 1880, 1887, and 1888, in the course of their business for the vessel as such agents, had made disbursements and advance's, which were unpaid at the time of the insurance and loss, to the amount of over $(>.000. The vessel was a British ship, and her owner resided in Mexico. The' vessel was wrecke'd in March, 1889, while on Hie voyage covered by the1 insurance', and became a total loss. The exceptiems takem upon the trial, and the assignments of error, presemt the; epue'stions whe'ther the; plaintiffs had any .lien upon the vessel few the disbursennemts and advances, or any insurable interest in the vessel. If these questions ought to be ruled adversely to the plaintiffs, the trial judge erred in directing a verdict for them, and in not dire'eting a vewelict for the de'femelant, as reepie'sted upon the; trial. The language e>f the; speedal clause' demotes very plainly that it. was the purpose of the policy to Indemnify the; plaintiffs against, the contingency that, by disaster to the; vessel, the;ir security for advances might he lost or impaired. The phrase “property pledged to cover the advane:es” is broad emeiugh to cover any interest arising from an hypothecation of any eharacter, whether by way of mortgage, maritime lien, or equitable lien; but it has no significance unless it is iutenele'd to evince that the insured interest is [714] one in the nature of a security upon the vessel. It is to be presumed that the parties intended to make a valid insurance, and the contract made would be a mere wager policy if it were intended td insure a debt owing to the plaintiffs, in respect to which they would suffer no pecuniary loss as a consequence of the loss of the vessel. We cannot discover that the plaintiffs had any interest in the vessel in the nature of a security for their advances, or that they occupied any relation towards the subject-matter of the insurance other than that of a general creditor of the owner. A ship’s husband does not have a maritime lien upon the vessel for the advances made in the course of his agency for the owners, in the absence of an express contract with them to that effect, or of peculiar circumstances from which such a contract should be implied. Presumptively, he relies upon the credit of the owners. The Larch, 2 Curt. 427; The Sarah J. Weed, 2 Low. 555; White v. The Americus, 19 Fed. 848; The Raleigh, 32 Fed. 633; The Esteban de Antunano, 31 Fed. 920. . The power of attorney did not effect an hypothecation, or give the plaintiffs an equitable lien upon the vessel. It was not coupled with an interest, or given as security to the plaintiffs, but was merely a naked power, revocable by the principal at any time. Hunt v. Rousmanier, 8 Wheat. 174; Hartley’s Appeal, 53 Pa. St. 212; Walker v. Denison, 86 Ill. 142; Barr v. Schroder, 32 Cal. 609; Attrill v. Patterson, 58 Md. 226. It did not confer upon them the right to sell the vessel for their own benefit, and any authority exercised under it would have been, in law, the act of the owner, and exercised solely for his benefit. Hpon the facts proved at the trial, the defendant was entitled to a verdict, and, for the error in refusing the request for an instruction to the jury to that effect, the judgment must be reversed.