Livingston Gilchrist v. the Maryland Insurance Company

• Decision Date: 09 February 1813
• Citation: 11 U.S. 506,7 Cranch 506,3 L.Ed. 421
• Parties: LIVINGSTON & GILCHRIST v. THE MARYLAND INSURANCE COMPANY
• Court: U.S. Supreme Court

11 U.S. 506

7 Cranch 506

3 L.Ed. 421

LIVINGSTON & GILCHRIST v. THE MARYLAND INSURANCE COMPANY

February 9, 1813

Absent. LIVINGSTON, J. and TODD, J.

ERROR to the Circuit Court for the district of Maryland, in an action of covenant upon a policy of insurance (against capture only) upon the cargo of the ship Herkimer, 'from Guayaquil, or her last port of departure in South America, to New-York,' 'warranted American property, proof of which to be required in the United States only,' 'and warranted free from seizure for illicit trade.' The declaration was on a loss by capture.

The case was stated as follows by MARSHALL, Chief Justice, in delivering the opinion of the Court:

Julian Hernandez Baruso, a Spanish subject, having obtained from the crown of Spain a license to import from Boston into the Spanish provinces of Peru and Buenos Ayres, in South America, in foreign vessels, a certain quantity of goods in the license mentioned, and to take back the proceeds in produce on payment of half duties, came to New York, in September, 1803, (Spain being then at peace with Great Britain,) for the purpose of carrying on trade under his said license.

On the 24th of August, 1804, he entered into a contract with a certain Authony Carroll, for the transportation of a certain quantity of goods to Lima, in Peru, under the said license. Carroll died without carrying the contract into full effect.

On the 25th of January, 1805, war having then broke out between Great Britain and Spain, B. Livingston, who had been bound as Carroll's surety for the performance of the contract, entered into a new contract with Baruso for the transportation of the same goods.

The preamble recites the license, and says, The said Baruso has agreed with the said B. Livingston to make an adventure to Lima, on the conditions and stipulations following, to wit:

1. In consideration, &c. he agrees to the following partnership with the said B. L. in virtue of which he transfers to the said firm, all his powers, &c. (under the license) of sending an American vessel belonging to the said L. or chartered, in which vessel shall be embarked goods to the amount of 50,000 dollars, the funds and vessel to be furnished and advanced by said I 2. Baruso to obtain the necessary papers from the Spanish consul, and B. L. to pay the duties. Baruso answerable for detention or confiscation by the Spanish government or vessels on account of any defect of right to send under said license, &c.

3. L. agrees in four months to embark the goods on board a vessel to Lima, to proceed thither, and to return to the United States with a cargo.

4. L. to choose the supercargo and instruct him; and as the adventure will appear on the face of the papers to belong to B. he shall give the supercargo a power, and recognize him the master of the cargo, so that the consignees at Lima shall follow literally his orders. The consignees, who were partners of B., to receive a commission.

6. The said L. and B. agree to divide equally, and part and part alike, the profits of the adventure. L. to have commissions on sale.

7. Optional in L. to sell in United States, or convey the return cargo to Europe. If he sells in the United States, B. may take out, at the price of sales, as much as will be equal to his rights.

8. If L. sends the cargo to Europe, he is to choose the supercargo, but the consignees to be chosen jointly.

9. In case of loss B. to claim nothing, as his share in the profits only accrues on the safe return of the vessel to the United States. Optional with L. to insure or not. L. not to be allowed for risk, if no insurance, more than 15 per cent. No insurance to be on the risks of the Spanish government.

12. If any loss accrues from causes not stipulated, B. to lose only his privilege. If loss on sale of return cargo, B. to sustain half.

Livingston soon afterwards chartered the ship Herkimer for the voyage, and entered into a contract with the other Plaintiff Gilchrist, one James Baxter, and Edward Griswold, for jointly carrying on, with them the said voyage. The cargo was purchased with their joint funds, and was shipped to Lima, where, and at Guayaquil, a return cargo was received, purchased with the proceeds of the original cargo.

On the 25th of March, 1806, Mr. Gilchrist addressed to Alexander Webster & Co. at Baltimore, a letter containing an order for insurance on the cargo of the ship Herkimer, from Guayaquil, or her last port of departure in South America, to New York, against loss by capture only, warranted American property, and free from all loss on account of seizure for illicit or prohibited trade. It says, 'the owners are already insured against the dangers of the seas and all other risks, except that of capture.' 'You have already had a description of the ship from Messrs. Church and Demmill, the agent of Mr. Jackson, and which I presume is correct.' 'I think proper to mention that the insurance will be on account of Mr. Brockholst Livingston and myself. Mr. Baxter and Mr. Griswold are also concerned, but the first gentleman thinks there is so little danger of capture, that in his letter from Lima he expressly directs no insurance to be made for him against this risk, and Mr. Griswold is not here to consult. Both these gentlemen, as well as those for whom you are desired to make insurance, are native Americans.'

The letter of Church and Demmill was dated 13th Feb. 1806, and after describing the ship, adds, 'she sailed from Boston the 12th of May last for Lima, with liberty to go to one other port in South America, not west of Guayaquil, and from thence to New York. She has permission to trade there.'

This letter was laid before the board of directors, and the application at that time rejected.

The letter from Gilchrist to Webster and Co. was afterwards laid before the board, and the company made the insurance for the Plaintiffs at 10 per cent.

The Herkimer, on her return voyage, was captured near the port of New York, by the Leander, a British ship of war, and sent to Halifax, where she was condemned.

The Plaintiffs gave the underwriters notice of the capture, and obtained their permission to prosecute a claim for restoration without prejudice to their right to abandon. On receiving notice of the condemnation, they wrote a letter of abandonment, which was delivered to the underwriters, who refused to pay for the loss, whereupon this suit was brought.

On the return voyage, just after doubling Cape Horn, Baxter, who was supercargo and part owner, gave to Edward Giles, the third mate, a bundle of papers, partly in Spanish, telling him at the same time that in all probability they might fall in with privateers, who might overhaul the trunk in the cabin, and if they found the papers, it was probable the vessel might be detained as the papers were in Spanish, and they might not be able to translate them. Giles put the papers in his trunk.

After the capture, Giles was taken out of the Herkimer into the Leander, and on being asked if he had any objection to have his trunk searched, replied that he had not. The trunk was then searched, and this bundle discovered. It contained papers, covering the cargo as the property of Baruso, mixed with others which showed that in fact it was the property of the Plaintiffs and of Baxter and Griswold. Evidence was given to prove, that the usage of the trade made these papers necessary. There was also an estimate of the probable value of the cargo, if shipped to Europe.

The IIerkimer arrived before the Leander; and Baxter, upon his examination on the standing interrogatories, described truly the character of the voyage, and stated correctly the property in the cargo, but denied his knowledge of any papers, other than those which were exhibited, as belonging to the ship.

Issue was joined on the plea, that the Defendants had not broken their covenant, and the jury found a verdict in their favor.

On the trial, 28 bills of exception were taken, partly by the Plaintiffs, and partly by the Defendants. Only those taken by the Plaintiffs are now before the Court.

The Plaintiffs prayed the Court below to instruct the jury, that the letter, ordering the insurance, does not contain a representation that no person, other than the said Livingston, Gilchrist, Griswold & Baxter, was interested in the return cargo of the Herkimer; nor that all the persons interested therein were native Americans. The judges were divided on this point, and the instruction was not given.

The 5th bill of exceptions stated, that the Plaintiffs prayed the Court to instruct the jury, that if they believed the testimony offered by them, then there was no such concealment of the said papers as can affect the right of the Plaintiffs to recover in this action, which instruction the Court refused to give, but directed the jury that if they should be of opinion, that from the usage and course of trade it was necessary to have the Spanish and other papers delivered by Baxter to Giles, the 3d mate, as aforesaid, then the delivery by Baxter to Giles, and the finding and taking of the said papers by the officers on the Leander, was not such a concealment as affects the right of the Plaintiffs to recover.

The 6th bill of exceptions states, that the Plaintiffs then prayed the Court to instruct the jury, that Baruso having removed to New York, in the United States, while Spain was neutral, for the purpose of carrying on trade, and having continued to reside in New York until after the capture of the Herkimer, the said Baruso could not, at the time of the voyage, be considered as a belligerent. This instruction the Court also refused to give, but did instruct the jury that if they should be of opinion that the said Baruso settled in New York before the war between Spain and Great Britain, and remained there domiciliated and carrying on trade generally until the capture of the Herkimer, he is to be considered as a neutral; but if they should be satisfied from the...