Munson v. Standard Marine Ins. Co.

• Decision Date: 02 August 1907
• Docket Number: 679.
• Parties: MUNSON v. STANDARD MARINE INS. CO., Limited.
• Court: U.S. Court of Appeals — First Circuit

156 F. 44

MUNSON v. STANDARD MARINE INS. CO., Limited.

No. 679.

United States Court of Appeals, First Circuit.

August 2, 1907

G Philip Wardner (Edward E. Blodgett, on the brief), for plaintiff in error.

James E. Carpenter (Samuel Park, on the brief), for defendant in error.

Before COLT and PUTNAM, Circuit Judges, and ALDRICH, District Judge.

PUTNAM Circuit Judge.

This is a suit at common law on a marine insurance policy attaching on the steamtug Carbonero, indemnifying against liability to her tows. One or more barges in her tow were lost. The tug was libeled. The ultimate decision was in favor of the tug and this suit was brought to make good the expenses of the litigation.

The Circuit Court decided in favor of the underwriters, whereupon this writ of error was sued out. The only question we need consider is whether, inasmuch as the result showed that the tug was not at fault, any claim can arise on the policy for reimbursement of the expenses of the litigation or any part thereof. As the plaintiff in the Circuit Court is the plaintiff in error, and the defendant in that court is the defendant in error, we will refer to them as plaintiff and defendant respectively.

We desire to remove at the outset from our consideration claims made by the plaintiff to the following effect: He says that when the tug was libeled, it would have been sold unless stipulated for, and he was obliged to secure a surety on the stipulation at considerable expense. Also, the libel was originally brought in the District Court for the District of Massachusetts, and then appealed to the Circuit Court of Appeals, both courts deciding in favor of the tug; but the Circuit Court of Appeals found that the tug was not free from negligence, though it also found that it was not proven that the loss of the tows was in consequence of that negligence. Under those circumstances, the Circuit Court of Appeals refused costs to the tug. Therefore the plaintiff says that the defense was unsuccessful to some extent. All these propositions are easily disposed of, because whatever may have occurred with reference to these details were but the incidents of litigation, and go the same way as the major elements thereof.

Of course, this policy, like all marine policies, was built up historically on the ancient forms; and so, instead of being drawn strictly as a policy of indemnity, it was undoubtedly adapted from the well-known policies on hull, cargo, or freight. Under such circumstances, some expressions will be found to be inconsistent with the main purpose of the policy, and not easily reconciled with other strong and clear language which it contains which must guide us. These facts are so far from embarrassing the court in its decision that they are easily disposed of by being referred to the historical nature of the policy sued on, by virtue of which old material always remains into which the new is inserted, although the new ordinarily controls the old. There are some expressions which raise a suggestion that it was intended that always, whenever a claim of liability was made, the suit was to be defended at the cost of the underwriters. Many policies of indemnity expressly provide to that effect, especially the usual policies which insure casualties in manufacturing establishments, and other casualties appertaining to various buildings, and liabilities from employers to the employed. What there is in this policy, however, is carefully so expressed as to leave it entirely to the option of the underwriters whether or not they would elect to assume the defense of any litigation which might arise. With these explanations, practically all we need say is that, on their face, the terms of the policy are clear that there is no liability on the part of the underwriters when there is no liability on the part of the tug or its owner. The various portions thereof expressing what we refer to were carefully pointed out in the opinion of the learned judge of the Circuit Court, and need not be rehearsed by us.

Neither does the plaintiff show us any marine insurance usages, or any decisions of the courts, which justify us in relieving him from the express terms of the policy. On the other hand, the only decisions of the court in point are in favor of the defendant. The last case of authority cited by either party is a decision of the Court of Appeal. Cunard Steamship Company v. Marten (1901) 2 K.B. 611. The late leading case may be said to be Xenos v. Fox (1868) L.R. 3 C.P. 630, 4 C.P. 665, also finally decided by the Court of Appeal. We will refer to these again, merely adding here that their true relation to the law of marine insurance can be best understood, as cases can ordinarily be best understood, by examining them as they appear in their proper setting in Arnold on Marine Insurance (7th Eng. Ed., 1901), beginning with section 862 and ending with section 876.

The question we have before us relates to marine insurance which, although it requires in many respects a broad and liberal treatment, is also in some respects technical, so that attempted analogies to other departments of the law may aid but little, and even not at all, in solving the issue which presents itself. As illustrating this proposition, we refer especially to what is said in Arnold on Insurance in the sections we have cited, and we might, if necessary, take time in referring to other writers on that subject with the same result. The marine insurance doctrine of contributions to 'particular averages' and 'particular charges,' with which averages or charges the claim now presented must classify itself, if it can be recognized at all, might well have been laid upon a broad foundation, so as to be governed by the same rules which apply to contributions to general averages, or to the adjustment of marine salvages; but they never have been. One has always been distinguished from the other in usages of marine insurance by a broad line. 'Particular averages' and 'particular charges' must sometimes be contributed to by the underwriters, although bringing their liability in excess of the face of the policy, while not necessarily so with reference in general averages and salvages. Therefore even the rules applicable to general averages and salvages cannot be availed of, and so much less can the cases and principles brought to our attention by the plaintiff, but drawn from other departments of the law. For example, he relies on 1 Brandt's Suretyship and Guaranty (3d Ed., 1905) Sec. 238, as establishing a proposition that where a surety is sued on account of an alleged liability for his principal, and defeats the action, he may recover from the principal the expenses involved in defending the suit. Unfortunately the citation he makes does not sustain him, although probably...