48 U.S. 595 (1849), Hugg v. Augusta Ins. & Banking Co.

Citation:48 U.S. 595, 12 L.Ed. 834
Case Date:March 09, 1849
Court:United States Supreme Court

Page 595

48 U.S. 595 (1849)

12 L.Ed. 834




United States Supreme Court.

March 09, 1849


THIS case came up, on a certificate of division, from the Circuit Court of the United States for the District of Maryland.

The Reporter finds the following statement prefixed to the opinion of the court, as delivered by Mr. Justice Nelson.

This is an action upon a policy of insurance on the freight of the bark Margaret Hugg, at and from Baltimore to Rio Janeiro, and back to Havana or Matanzas, with liberty to touch and stay at any intermediate port in case of stress of weather, or for the purpose of transacting business. The amount $5,000; premium, $158.25.

The policy contained the usual memorandum, enumerating various articles warranted free from average, and all others that were perishable in their own nature.

About four hundred tons of jerked beef were shipped on board the vessel at Montevideo, which were to be delivered in good order at the port of Matanzas or Havana to the consignees,

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they paying freight. The bill of lading was signed the 25th of April, 1842.

The vessel sailed from Montevideo on the 29th of April, and, after being out some forty-seven days, encountered a storm, and was driven on Gingerbread Ground, where she received considerable damage; the rudder was broken and unshipped, and as the extent of the damage could not be ascertained, it was deemed prudent, on consultation with the captain of a wrecking vessel and Bahama pilot, to go into Nassau for the purpose of a survey and repairs. The wind was fair for that port, but strong ahead in the direction of Matanzas. The vessel was taken in charge of one of the wreckers, and arrived at Nassau on the second day, about the 20th of June, and grounded on the bar while entering the harbour, and under the charge of the king's pilot, and sustained a good deal additional damage.

A part of the beef had been thrown overboard to lighten the vessel while on the Gingerbread Ground; and a much larger quantity while on the bar at Nassau. She had leaked while on the ground in the former place, so that it was necessary to work the pumps every half hour; and at the latter, there was seven or eight feet of water in the hold, with some fourteen men at the pumps.

The beef was so much damaged by the sea-water that the board of health at Nassau refused to allow but about one hundred and fifty tons to be landed. The rest was ordered to be carried outside the bar, and thrown into the sea, for fear of disease; it was wet and very much heated, some of it so changed as to become green, and all emitting an offensive stench. The portion allowed to be landed was wet and heated, and not in a fit condition to be shipped; and the board of health recommended to the authorities, that it should be removed as soon as conveniently could be.

The vessel was surveyed after the cargo was discharged, and it was found that the rudder was entirely broken off, the forefoot gone, and the keel greatly shattered and damaged; and it appears to be conceded that she could not have been repaired at that port so as to have carried on the cargo, and that, if she could, it would have cost more than half her value. She was repaired sufficiently to bring her home in ballast. It also appears that there was no vessel in port that could be procured to forward on the remaining cargo, even if it had been in a condition to be shipped.

The salvors libelled the vessel and cargo for salvage services in the Vice-Admiralty Court of the Bahamas on the 30th of June, 1842, to which the master put in an answer on the 7th

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of July, insisting that the libellants were entitled to compensation for pilotage only, and not for salvage.

The court, on the 18th of July, decreed $2,100 salvage to the libellants, for services rendered to the vessel and cargo. Appraisers of the vessel and cargo taken on shore had been previously appointed; and, on an examination of the cargo, it was found to be so much damaged, and in such a condition, that they advised an immediate sale, as it was deteriorating in value daily.

The master assented to a sale, accordingly, which was ordered by the court on his application on the 1st of July. The nett proceeds amounted to $2,664.92. The time occupied in an ordinary voyage from Nassau to Matanzas is three days, and to Baltimore, ten.

It was proved by several masters of vessels, that the navigation at the place where the Margaret Hugg first grounded, and was visited by the pilots, was very hazardous, and that, under similar circumstances, they would have considered it their duty to have carried their vessel into the harbour at Nassau.

The regular premium for insurance of freight of the cargo covered by the policy for the outward voyage was about one and one eighth per cent.

Upon this state of facts appearing at the trial, the following questions were raised, and presented to the court, viz.:----

1. It being admitted that the loss is to be adjusted according to the terms of the Baltimore Insurance Company, if the jury find that jerked beef was a perishable article within the meaning of the policy, are the defendants liable as for a total loss of freight, unless the entire cargo was so totally destroyed that no part of it could have been carried to the port of destination even in a deteriorated and valueless condition?

2. If the jury find that, from the condition of that portion of the cargo sold at Nassau (occasioned by the disasters stated in the testimony), it was for the interest of the insured and insurers upon the cargo that it should be so sold, and not transported to Matanzas, is the plaintiff entitled to recover for a total loss of freight, provided his own vessel could have been repaired in a reasonable time, so as to perform the voyage in safety, or he could have procured another vessel, and have transmitted to the port of destination, in its deteriorated state, the portion sold at Nassau? And

3. Assuming that the plaintiff is entitled to recover, is the policy on the amount mentioned for one entire voyage round, from Baltimore out and home again? and are the defendants entitled to deduct from the amount insured the freight earned in the voyage from Baltimore to Rio upon the outward cargo?

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The cause was argued by Mr. Mayer and Mr. Nelson, for the plaintiffs, and Mr. David Stewart and Mr. Johnson, for the defendants. The following is a very brief sketch of the respective arguments.

Mr. Mayer, for the plaintiffs.

The premium was double what would have been demanded for half the voyage. Some of the beef was thrown out as spoiled, the rest landed, somewhat injured. Then came a libel for salvage, and a decree for it. No funds existing to pay it or make the necessary repairs with, a sale was ordered. We abandoned, and now claim for a total loss. The policy is a blank cargo policy, filled up with an insurance on freight. Does the claim arise where the articles are not entirely lost? In England the courts of Common Pleas and King's Bench have decided differently. 3 Bos. & Pul. 474; Marshall on Ins. 227, 565; 2 Maule & Selw. 247;--that the articles, though not lost, might be deemed extinct. 32 Com. Law Rep. 115; 1 Wheaton, 219, 225,--case of memorandum articles; 2 Phillips on Insurance, 485,--all the decisions cited; 6 Cowen, 270.

The law was settled in England by the case of Roux v. Salvador, 3 Bing. N. C. 266; S. C., 1 Bing. 526; and there is nothing contradictory in the decisions of this court. The case in 1 Wheaton depended on particular circumstances. If the beef had to be thrown overboard for the sake of health, it could not be considered any longer as beef for all commercial purposes. If the voyage is broken up, there is an end to freight; and it was broken up here by the perils insured against. There is no difference between memorandum and other articles, when a total loss ensues. Marshall on Ins. 585; 12 East, 304; 15 East, 565; 6 Mass. 119, 318, where the cases are cited; 1 Wheat. 219.

The vis major of the claim for salvage broke up the voyage and destroyed the property. The beef was in a fermenting state. The condition of the vessel was hopeless. As to the effect of vis major, 7 Com. Law Rep. 202.

Second question certified.

This involves the discretion of the captain. The owner of the vessel is bound by his contract to carry the goods. If the perils of the sea require a transshipment, it is his privilege and duty to make it. But if there be a difficulty in obtaining a vessel, the master is not bound to pay an excessive freight. 7 East, 44; 7 Com. Law Rep. 364, same as 3 Brod. & Bing. 97; 36 Com. Law Rep. 156, same as 9 Adolph. & Ellis, 314; 4 Johns. Ch. 225; 7 Cowen, 584; 4 Wend. 54; 12 Johns. 107; Abbott on Shipp. 369, 461.

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But if the court should think that it was the duty of the master to transship, then I say that, if there was ground of abandonment from vis major, the captain became the agent of the insurers, and they must be responsible for his errors. 9 Johns. 28. If half the property is lost, it is not the duty of the master to transship.

The captain is the agent of the adventure, and if the jury justify him as to the vessel or cargo, his acts bind all parties. 5 Peters, 604; 1 Johns. 406. The exigency would have justified a prudent man in acting as he did, if there had been no insurance. He is to act for the general good, mindful...

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