Scriba v. Insurance Co. of North America

WASHINGTON, Circuit Justice (charging j ury). We doubt whether the underwriters will not, upon reflection, be pleased to know that the doctrine contended for by them on this occasion, is not founded in law. The adoption of it would lose them pounds, where-they would gain dollars. This, however, forms no part of our consideration; whether. it work to their benefit or injury, we have nothing to do but to pronounce the law, without considering how it may affect the parties on either side. The first point made at the bar is so extremely plain, that it is difficult to frame an argument which can throw additional light upon it. To the validity of every contract, there must not only be an agreement of parties, but there must be a subject matter for that agreement to operate upon. A policy effected upon a particular cargo, constitutes an agreement to that extent. But if no such cargo is shipped, or if the risk agreed to be insured never commences, there is not a subject matter to which this agreement can apply; and of course there never was a valid contract — one of the essential requisites to all contracts being wanted. Apply this principle to the present case. The original agreement between these parties, was tor an indemnity upon goods laden, or to be laden at La Vera Cruz; the adventure or risk to commence trom. and immediately after the loading of said goods on board the Alert, at Ira Vera Cruz. But no goods were laden at Ira Vera Cruz, on board of this vessel. The subject matter, therefore, of the agreement never existed, and consequently there never was, at any time, a valid and complete contract between the parties. This is plain, not only upon the words of the agreement, but upon the intention of the parties, which corresponds with their expressions; for it is absurd to suppose that either of them contemplated an insurance of goods sent from New-York to Ira Vera Cruz, and intended of course to be sold there. The memorandum of the 11th of February, endorsed upon the policy, has furnished the only plausible ground for an argument by the defendants’ counsel. But, it is obvious that the decision upon the first point, is conclusive as to this; for if there never was a contract between the parties, as to the subject matter of this policy, this memorandum, which relates to another subject, and is merely super-added to the policy, cannot constitute a contract. The defendants’ counsel, through the whole of their argument, have treated this memorandum as a new contract; and to a car-tain extent it is so. It is an agreement to permit the vessel to touch at Havana, on paying a half per cent, for the indulgence; but it is a very great mistake to consider it as a new contract of indemnity, the reverse of which it professes to be. It is true, that if the parties, being both fully apprized of all that had occurred, had in this memorandum agreed, in express terms, or such as plainly indicated this to be their meaning, that the original policy should attach to the cargo brought from Ira Vera Cruz, the cargo in such case would be considered as covered by the policy. No particular form of words was necessary, If the intention, upon a full knowledge of all material facts, was plainly expressed. But such a knowledge of facts was not possessed by the parties. Both of them, it is plain, acted under a mistake in point of law; and the defendants, (if not the plaintiff,) under an ignorance also of facts, that the policy did attach upon, and did cover the cargo brought from Ira Vera Cruz. But such mistake cannot prejudice either party, and the memorandum, instead of indicating a design in the parties to cover, by a new agreement, this cargo, by the original policy, is plainly inapplicable to that subject; is confined to a new one, or subsidiary altogether to the original agreement, which never at any moment took effect The parties treated the first agreement, on the 11th of February, as a subsisting contract; but this could not make it a valid one, if in point of law, it never-had existence. The case put at the bar, of a forfeited lease, and subsequent receipt of rent by the landlord, is good law; but there the contract was once valid, though forfeited at the option of the landlord. Yet it was in his power to waive the forfeiture if he pleased; and the receipt of rent, he being fully apprized of all circumstances, amounts to an implied waiver of it. A case of insurance may be mentioned, apposite to this. If the risk in this case had once commenced, but the right to claim an indemnity in case a loss had happened, had been forfeited by a deviation or the like, the defendants being informed of the fact, might have waived the forfeiture, and possibly a memorandum of this kind might have had such an effect; certainly if such had appeared to have been their intention, it might have been so construed. But, if, as in this case, there never was at any time a valid contract, no implied ratification could make it a subsisting contract in this case, any more than payment of rent for white acre, where only black acre had been leased, would constitute a lease for white acre. The truth is, that this cargo never was covered, any more than if the policy had been made, and specifically, upon a cargo of rum. and a cargo of cocoa had been taken; no posterior [876] act therefore could cover it, hut a new contract going to that extent. As to the third point, little need be said about it, as the plaintiff is clearly entitled to recover upon the first ground. But if it were necessary to decide it, it would be sufficient to say, that if in your opinion the vessel was not seaworthy at the time the risk commenced, if it ever had commenced, neither party was bound; and of course the defendant could not retain the premium in case of safe arrival; nor could the plaintiff have recovered a loss, if one had occurred. Verdict for plaintiff.