CASE on a policy of insurance, upon the freight of the ship
Richmond, for a voyage, at and from Philadelphia to Batavia, and
thence back again. The premium was 20 per cent. 'to return five per
cent. if the ship proceeds only to Batavia and back to
Philadelphia, and no loss happens;' and the insurance was declared
to be 'on freight advanced here, and which, by agreement, is valued
at 13,500 dollars.' The policy, also, contained the usual clause,
that there should be no average loss recovered, if less than 5 per
cent. unless it was general.
On the trial of the cause, it appeared, that the Richmond was
owned by Messrs. Jesse and Robert Waln; that the plaintiff
purchased from the owners, three-eighths of the tonnage of the
ship, for the voyage, at the price of 10,837 dollars 50 cents,
which was paid before the ship sailed; that the Richmond proceeded
safely to Batavia, but, on her return thence to Philadelphia, she
was captured by a French privateer, who ordered her to Guadaloupe,
and she was afterwards re-taken by a British ship of war, who
carried her into Martinique; that upon a libel for salvage at
Martinique, [459-Continued.]
one half of the full value of the ship and cargo was decreed to
the recaptors, and the claimants charged with all costs; and that
by agreement between the captain and the supercargo, on the one
hand, and the re- captors, on the other, one half of the cargo was
specifically delivered to the latter, and 2750l. fixed for the
salvage on the ship, which was paid by a draft on the owners at
Philadelphia, secured by an hypothecation.
The present suit was brought to recover an average loss; and the
case being submitted for the opinion of the Court, two questions
were discussed: 1st. Whether the subject described in the policy
was an insurable interest. 2d. Whether, under all the circumstances
of the case, the insurers were liable for a general average.
(a)
1st. The plaintiff's counsel, contending that the interest was
insurable, urged, 1st. That it was a lawful interest. It is the
payment of a sum of money, for the benefit of bringing home a
return cargo, either as owner, or upon freight. There is no general
law, no law of America, or of England, against the payment of
freight in advance, whatever may be the law of France; 2 Marsh.
644. and there is scarcely a subject of property, for which
(a) Mr. Fitzsimmons, a merchant and underwriter of great
in elligence and experience, proved, at the trial of the cause,
that the interest, acquired by the plaintiff, in the tonnage of the
ship, was a well known subject of insurance in Philadelphia. He,
also, proved, that an adjustment of the average loss, on the
present voyage, had been made; in which the insurance companies,
and most of the private underwriters, had acquiesced. On the effect
of the adjustment, the plaintiffs cited Park. 118. Marsh. 244.
Page 4 U.S.
459, 460
a price is paid and received, that may not be the subject of
insurance, unless where general policy forbids; as in the case of
seamen's wages. Park. 9. (5 Edit.) Ib. 103. Nor, can this be
considered as a double insurance; for it is a distinct interest;
and different insurances may be effected by different persons,
having different rights, in the same property. 1 Marsh. 282. Park.
103. Nor is it a loan upon bottomry; for it was not advanced on the
pledge of the ship herself, but for the use of her tonnage; and it
is immaterial, that the valuation in the policy, exceeds the actual
cost; as the plaintiff had a right to cover the premium, charges,
interest, and profit, as well as his advance. 2d. The interest
insured was liable to hazard and loss; and, therefore, it was
insurable. If the ship had been totally lost, the plaintiff's use
of the tonnage, for which he had paid, was gone, and the owner of
the ship could not be compelled to refund. 3d. The interest is well
described in the policy. It is not a purchase of a share in the
vessel; but of a right to convey goods in her, upon the voyage
insured; and the transaction does not violate the registering act,
on the point of ownership, (2 vol. 147.s. 14. Swift's Edit.) or
even, on the supposition of its amounting to a sale of a part of
the vessel, it only forfeits the American privileges; it does not
affect the insurable quality of the interest acquired. But, again:
when it is objected, that none but the owners of a ship can recover
upon an insurance of freight; the objection obviously arises from
confounding the purchase of the right of freight, paid in advance,
with freight to be earned and received, at the end of the voyage.
It is clear, that the owners of the ship could not insure, (and
certainly they did not attempt it) as freight, the tonnage
purchased by the plaintiff. And when the plaintiff proposed the
insurance, the intention of the parties, according to the facts
disclosed, without objection at the time, ought to govern the
construction of the policy. Park. 439. (4 Edit.)
2d. On the second point, the plaintiff's counsel insisted, that
whether the salvage was considered as freight, or as a charge upon
goods, the interest insured was liable to a general average; and,
if so, the underwriters on the present policy were bound to furnish
an indemnity. Ship, freight, and cargo, contribute to general
average. Park. 121. Abbot 215. (Am. Edit.) 1 East, 220. If it is
essential to a general average, that the loss should be voluntarily
incurred, surely the payment of salvage, upon a re-capture, is an
act as voluntary, as throwing goods into the sea, upon the coercion
of a tempest. Nay, it is within the express stipulation of the
policy, that the assured shall labour to recover the property from
any jeopardy, in which it is involved, by a risque insured against.
Park. 140, 1. 123. Ab. 218. 2 Burr. 1213. 1 Mag. 245. 1 Rob. Rep.
86. And, if ship, freight, and goods, all contribute to a general
average, the plaintiff's interest in the use of the ship could only
contribute in this way; and, contributing at all, is entitled
Page 4 U.S.
459, 461
to an indemnity. 2 March. 460. Park. 124, 5, 6. (4 Edit.) Ab.
290, 1. 1st. The defendant's counsel contending that, the interest
was not insurable, argued, that it was in the nature of bottomry;
and, therefore, not insurable, unless specifically; and even then,
there could be no recovery for an average, but only for a total,
loss; that the idea of freight, is inseparable from a completion of
the voyage, and none but the owner of the ship can recover freight;
and that there is no instance of a person, who is merely liable to
pay freight, being liable to contribute to the payment of a general
average; Ab. 179. 2 Bos. and Pull. 321. 2 Marsh. 644. 1 Marsh. 93.
If the purchase is considered as a purchase of part of the vessel,
then no legitimate contract can be found on it, unless the vessel
is registered anew. 2 vol. 147. s. 14. (Laws of U. S. Swift's
Edit.) 2d. On the second point, the defendant's counsel contended,
that the decree of the Court only affected the ship and cargo (not
the freight) with the payment of salvage; that nothing but a
general average can affect freight; and a general average calls for
a voluntary sacrifice of a part, to preserve the rest, of the
property; whereas the loss on the salvage was compulsory. 1 Johns.
406. 410. Ab. 220. Park. 122. 130. The chief justice, after stating
the general facts, delivered the unanimous opinion of the Court, in
the following terms.
TILGHMAN, Chief Justice. In this case two questions have been
made: 1st. Had the plaintiff an insurable interest? 2d. If it was
insurable, was it liable to a general average? 1st. In order to
determine whether the plaintiff's interest was insurable, we must
first ascertain the nature of it. It seems to be a kind of
interest, not much known in Europe, though well known in this city.
The plaintiff advanced a sum of money to the owners of the ship, in
consideration of which, they gave him a right to fill up
three-eighths of the tonnage of the ship, for that voyage, with
goods, either his own, or the property of others. It is called in
the policy, 'freight advanced,' an expression well calculated to
shew its meaning. All countries, and even all cities, have
singularities of expression. All new inventions, either in commerce
or the arts, give rise to new modes of speech, which, when once
introduced into contracts, are recognised by Courts of justice,
whose duty it is to carry into execution the intention of the
contracting parties. Now, what is there in this interest, which
should exciude it from the benefit of insurance? there is nothing
unlawful in it. It is subject to loss; for, whether the plaintiff
used the tonnage for the transportation of his own goods, or of the
goods of others, he would lose his money, unless the ship performed
the voyage in safety. Indeed, I think Mr. Ingersoll, in
Page 4 U.S.
459, 462
arguing for the defendant, conceded that the plaintiff's
interest might have been insured, if it had been properly
described; but he conceived it to be in the nature of bottomry.
This it certainly cannot be; there was no loan of money. Messrs.
Walns were obliged to make no payment to the plaintiff, but the
plaintiff was entitled to make what he could from the tonnage he
had purchased. Whether it was more, or less, Messrs. Walns had
nothing to do with it. The testimony of Mr. Fitzsimmons goes for
towards proving, that the plaintiff's interest was well described,
and was a proper object of insurance. In the case of Gregory v.
Christie, (Park. 11.) my Lord Mansfield thus expresses himself, 'I
should think that the words 'goods, specie, and effects,' did not
extend to the plaintiff's interest, if we were only to consider the
words by themselves. But here is an express usage, which must
govern our decision. A great many captains in the East India
service swear, that this kind of interest is always insured in this
way.' Now, though there have not been a great many witnesses in
this cause, yet there has been one, very much conversant in the
business of insurance, who stands uncontradicted. Upon this first
point, therefore, the insurability of the plaintiff's interest,
whether it is considered on principle, or on usage, I have no doubt
but the law is with the plaintiff. 2d. But was the plaintiff's
interest liable to general average? General average, or general
contribution, is founded on principles of justice and sound policy.
It arises, when a sacrifice of part has been made for the
preservation of the residue, or, when money is expended, to
preserve the whole. Thus, the loss occasioned by cutting away of
masts, or throwing goods overboard to lighten the ship, in a storm,
or money paid to redeem ship and cargo, which had been captured,
are subjects of general average; ship, cargo, and freight, have
been benefited, and therefore all must contribute. In the present
instance, a compromise was made with the recaptors? Was it for the
benefit of all persons concerned in ship, cargo, and freight? for,
if it was, it falls within the rule of general average. It appears
to me that it was for the benefit of all concerned. It prevented a
sale of both ship and cargo, which must have injured all concerned.
It would certainly have injured the plaintiff, who had goods on
board to a large amount, and he had paid in advance, for the
freight of these goods. Of whatever nature the plaintiff's interest
was, it was liable to salvage. Sir William Scott's opinion (a) is,
that salvage is due, for ship, cargo, and freight. But the
defendant's counsel object, that general average never arises but
from the voluntary act of man, and here, say they, was no voluntary
act; for, salvage was decreed by the Court. This argument is rather
too refined. Let us consider it. It is true, that the agency and
consent of man, must intervene, to produce a general average; but
this agency and consent, though in one sense voluntary, are upon
the whole, involuntary. When life is at stake, the mariner
willingly (a) The Racehorse, 3 Rob. 86.
Page 4 U.S.
459, 463
throws gold and diamonds into the sea. But was he willing to
encounter the storm, which produced this dire necessity? General
average always arises from actions produced by necessity. In the
case before us, there was a capture, re-capture, and decree of
salvage. The master and supercargo consented, under these
circumstances, to a measure, which produced a general benefit. They
surely exercised as much volition, as if they had thrown half the
cargo over board in a storm. Suppose they had stood still, and
suffered the ship and cargo to be sold, the underwriters would then
have had to answer for the whole freight. It is better for them to
be subject to a general contribution.
We are of opinion that the plaintiff is entitled to recover on
this policy, according to his demand.
Lewis, Rawle, and J. Sergeant, for the plaintiff.
M'Kean (Attorney-General) and Ingersoll, for the defendant.
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