Grant v. Lexington Fire, Life & Marine Ins. Co.

• Citation: 5 Ind. 41
• Parties: Grant and Another v. The Lexington Fire, Life and Marine Insurance Company
• Decision Date: 22 May 1854
• Court: Supreme Court of Indiana

5 Ind. 41

Grant and Another v. The Lexington Fire, Life and Marine Insurance Company

Supreme Court of Indiana

May 22, 1854

ERROR to the Dearborn Circuit Court.

The judgment is reversed with costs. Cause remanded.

David Macy and S. H. Spooner, for the plaintiffs.

P. L Spooner and B. J. Spooner, for the defendants.

OPINION

Stuart J.

Assumpsit on a policy of insurance on two flat-boats loaded with hay, owned by Grant and Walters, and bound from Lawrenceburgh to New Orleans. Each boat contained ninety-five tons. The hay was worth 2,550 dollars. The defendant insured the whole cargo on one boat, and fifty tons on the other. The amount insured is valued in the policy at 2,175 dollars; premium paid, 108 dollars and 75 cents. The defense, consisting of the general issue, and a special plea of limitation leading to an issue of fact, raises no question on the pleadings for our consideration. The trial by jury resulted in a verdict and judgment in favor of the insurance company.

The risk taken was for the voyage to New Orleans and eight days thereafter.

Among the conditions it was stipulated that the boats should be manned with a competent number of hands, and that it might be lawful for them to touch at intermediate points, with the privilege of coasting, and transacting any lawful business connected with the voyage, provided the delays caused thereby should not exceed thirty days in all.

There is a further stipulation in the policy, in these words: "And it is hereby agreed that this insurance company is not liable for loss or damage arising from, or caused by, the sad flat-boats being unduly laden, nor for loss or damage during any time in which the said flat-boats may be lashed or fastened to any other boat, either floating or landing therewith (except in the Ohio or Mississippi rivers), nor in any case if towed by a steamboat, or if more than two boats are lashed or fastened together."

These cover the only points material to be considered in the present case.

The evidence is made part of the record. It appears that the boats reached Freeport, three miles above New Orleans, on the 24th of June, 1846. There, three days after landing, all the hands but two were paid off and discharged. About the 1st of July, 1846, one of the boats was towed down to the flat-boat landing at New Orleans by a steamer; the other still lay at Freeport. The object of hay-boats stopping at Freeport was to give time to make sale. At the flat-boat wharf at New Orleans, it appears, they can only lie four days, and then are compelled to sell. On the evening of the 3d of July 1846, a violent storm came on, which destroyed both boats. The witnesses all agree that a removal of the hay from the boats during the storm would have been unavailing, even had it been possible, for that the torrents of rain falling at the time would have been equally destructive to the cargo.

The witnesses also agree that by means of pumps, &c., great exertions were made to save the boats; but that such was the violence of the storm that all reasonable exertions were in a great measure fruitless.

One of the witnesses says that after the landing at Freeport, the same number of hands is not necessary; that hay-boats stop there to avoid paying wharfage; that such articles as hay, purchasers living in New Orleans expect to find and contract for at Freeport. Another witness says, with all articles like hay it is the usage and custom to land at Freeport, and there remain till sales are made, and then drop down to flat-boat landing at New Orleans. The witness adds: "Hands on flat-boats have a right, at the end of three days after the flat-boat lands at any point in Louisiana, and remains at any one place that length of time, to demand their pay and leave the boat." This seems to be the usual course of that trade on the river.

This cause was submitted here in December, 1851. In the only brief we could find among the papers, there are but two or three authorities cited, and these to a point of minor importance. It is, therefore, to be presumed that, in a cause of such intricacy and magnitude, elaborate briefs were filed, and that in the confusion incident to the coming in of the new Court, they have been mislaid. Such misfortunes throw upon us great additional labor, and consequently delay the business of the Court.

The grounds assumed by the insurance company against the recovery of Grant and Walters, as we gather them from the records, are,

1. That the landing at Freeport was, within the meaning of the policy, the town, city, or market place of destination, and that eight days after reaching such market-place, the risk terminated.

2. If the risk still continued at Freeport, was the discharge of the hands in contravention of the terms of the policy?

3. Were the boats from the beginning manned with a competent number of hands?

4. Was the towing of the boat from Freeport to New Orleans by a steamer a discharge of the insurers?

There are several other questions suggested by the evidence and instructions which need not be noticed. For example, the issue formed on the delay to bring suit ^[1]. But the record clearly shows that the delay is a result to which the insurance company mainly contributed by holding out hopes of an amicable adjustment. She should not, therefore, be permitted to take advantage of her own wrong.

Another preliminary consideration of vital moment is the rule of construction to be adopted in such cases. In Yeaton v. Fry, 5 Cranch 335, it is said that policies of insurance are generally the most informal instruments brought before the Courts, and that none are more liberally construed to carry out the real intention of the parties, if that intention can be discovered. But Judge Duer, writing long after this decision, and no doubt fully aware of it, seems to hold to a different rule. Insurance policies are to be liberally construed in favor of the assured; and an exception is to be strictly construed against the underwriters. 1 Duer on Ins. 161. The facts in the case in Cranch, supra, fully illustrate the strictness of the rule of construction as to exceptions.

First, then, as to the termination of the voyage at Freeport. The risk was taken from Lawrenceburgh to New Orleans, and eight days thereafter, with the privilege of thirty days' coasting, &c. It has been seen from the evidence that Freeport is made in practice the New Orleans hay market. This is for the convenience of all the parties, and to save the expense incurred at the New Orleans wharf. The evidence shows that Freeport is a separate municipality, three miles above New Orleans. LaFayette, also a separate municipality, intervenes. Nor does Freeport appear to be the place of landing hay, but only a place of exhibiting for the purpose of sale. The flat-boat wharf at New Orleans is the place of landing and discharging the cargo. The latter is, therefore, the termination of the voyage. Freeport is no more New Orleans, within the express terms of the policy, than Memphis, or any other town on the river. The stop at Freeport is clearly the "coasting and transacting lawful business connected with the voyage," which the underwriters have expressly provided for and licensed. It is not contended that the delay caused thereby exceeded thirty days. And as will appear in the sequel, it is presumed that the underwriters were acquainted with this usage of the trade to which their policy related. Grant v. Paxton, 1 Taunt. 463; Noble v. Kennoway, 2 Douglas 510. There is, therefore, nothing in the first objection.

2. If the risk still continued at Freeport, was the discharge of the hands in contravention of the terms of the policy?

Some evidence was given to show that such was the usage of the trade. The plaintiff offered to give further evidence on that point, but, upon objection being made, the Court refused to admit it. This ruling, and the evidence to the same effect which was received without objection, as well as some instructions asked by the defendant and given by the Court, present the question just stated. The law is well settled both against the ruling and the instructions. In Noble v. Kennoway, Lord Mansfield held that the underwriter is bound to know the nature and peculiar circumstances of the branch of trade to which the policy relates. The insurance to which he referred was on cargoes of two ships, the Hope and the Ann, in the Labrador and New Foundland trade. The one arrived safe on the 22d of June, 1778, and the other on the 14th of July following. The crews of these vessels were immediately employed in fishing. On the 13th of August following, an American privateer took both vessels, finding no one at the time on board. The action was brought to recover the value of the goods. The underwriters set up in defence that there had been unnecessary delay in unloading the cargoes. The plaintiffs rested their case on the terms of the policy and the usage of trade. "If," says the Court, "the underwriters do not know the usage, they ought to inform themselves. It is no matter if the usage has only been for a short period. But this trade has existed for several years. It is well known that fishing is the chief object of the voyage. The evidence as to the usage was properly admitted." 2 Douglas 510. Accordingly, Grant v. Paxton, 1 Taunt. 463; Moxon v. Atkins, 3 Campbell 200; Salvador v. Hopkins, 3 Burr. 1707; Buck v. The Chesapeake Insurance...