Graves v. Boston Marine Ins. Co.

• Decision Date: 01 February 1805
• Parties: GRAVES and BARNEWALL v. The Boston Marine Insurance Company
• Court: U.S. Supreme Court

6 U.S. 419

2 Cranch 419

2 L.Ed. 324

GRAVES and BARNEWALL v. The Boston Marine Insurance Company.

February Term, 1805

APPEAL from the circuit court for the district of Massachusetts, in which was dismissed a bill filed by the appellants, seeking to charge the appellees upon a policy of insurance effected by them; and to obtain relief against an alleged mistake, by omitting to insert the name of Barnewall in the policy; the interest and property insured being that of Graves and Barnewall, and so intended to be insured.

Graves and Barnewall were equally and jointly interested in the ship Northern Liberties and her cargo; and they had various insurances effected in different places upon the ship and cargo, from New York to Teneriffe, as well as from thence to La Vera Cruz, always for their joint and equal benefit.

On the 24th of April 1800, Graves wrote to Elisha Sigourney and Sons of Boston, inquiring the rate of insurance on the risk, and describing himself as 'one of the parties interested in the property to be insured.' On receiving a reply, he wrote, the 5th of May 1800: 'Your office asks too high a premium for the risk I was inquiring after; the vessel cannot be out of time as she sailed from hence for Teneriffe in February, where we have not learned that she had arrived; less so that she had sailed; but as it is my principle to run no risks where I can help it, I have prevailed upon my co-partner to anticipate her arrival and sailing again to Vera Cruz. To give you a perfect idea of the nature of the risk to be insured, you will find a copy on the other side of the application to our offices, who took a good deal at seventeen and a half per cent.; we may be induced to give one or two per cent. more to complete the business, and wish you to say whether it could not be effected with you at seventeen and a half per cent., or near that; if so, and we have not insured elsewhere before a return of your answer, I may likely give you an order to effect twenty or twenty-five thousand dollars.'

The copy of the application, annexed to the letter, stated, that 'on the 20th of February last, the ship Northern Liberties sailed from this for Teneriffe commanded by Frederick King, a man of courage and good conduct; she mounted sixteen six pounders, and had a crew of thirty in number. No vessel could have been more completely fitted, is copper sheathed, and by the report of the pilot who carried her out to sea, sails remarkably fast. Upon this vessel's cargo we want insurance at and from Teneriffe to La Vera Cruz. The ship and cargo really and truly belong to American citizens.'

This communication was laid before the appellees, and offer was made by them to insure the property, which was communicated to Graves by Sigourney and Sons; and on the 15th of May 1800, he directed the insurance to be made upon the cargo to the amount of $16,000, upon the best terms and within certain limits. Upon these orders they made insurance with the Boston Marine Insurance Company, the appellees, in the sum of $10,000 upon the cargo of the ship, for the voyage mentioned in the letter of the 5th of May 1800.

The printed forms of policies used by the appellees, did not contain the ordinary clause importing the insurance to be made as well for the benefit of the persons named in the policy, as for the benefit of all concerned. Of this fact, Graves and Sigourney and Sons, were ignorant.

The complainants alleged in their bill, that the letter of Graves of the 5th of May 1800, and the copy of the application were shown to the president and directors of the company, as the order for the insurance; and were received and acted upon by them as the basis upon which such insurance was made, and that it was well understood.

The answer of the company, by their president, under the corporate seal, admitted the execution of the policy, and that Graves had some interest in the property insured, but they did not know to what amount—that upon due proof of loss, they were bound and are ready to pay him the amount of loss which he had sustained. It admits that E. Sigourney, in the beginning of May, applied for insurance, but denies that either of the letters of the 24th of April or 5th of May was shown to him, or left with the president or secretary of the company, or any other person, for their use. It admits that the copy of the application to the New York offices was left with the president, but avers that the premium required was higher than E. Sigourney and Sons would give, and that no bargain or contract was at that time made, but the application was withdrawn. That no insurance was made by them in pursuance of the letter of the 15th of May, or any other letter from Graves, and no further application was made until the 14th of June, when Andrew Sigourney applied for the insurance of 10,000 dollars on the cargo of the ship Northern Liberties; whereupon the policy was made for and on account of John Boonen Graves, and for account of no other person whatsoever. It denies that before or at the time of making and subscribing the policy, it was mentioned by the said Sigourney and Sons, or either of them, or known, or understood, or suspected by the defendant, that the property proposed to be insured was the joint property of Graves and Barnewall, or of any company or copartnership of which Graves was a member, or that it was the object and intent of the said insurance to cover the interest of the concerned therein in general, but only the separate and particular interest of Graves.

It denies all mistake or misunderstanding in inserting the name of Graves alone; but insists that his name alone was inserted, because the interest of no other person was intended to be insured.

It avers that after the policy was prepared and filled up, it was delivered to Andrew Sigourney, of the house of E. Sigourney and Sons, and by him read and approved, and that he thereupon gave his promissory note for the premium.

It denies that any alteration or omission in the form of policies had been made or adopted by the president and directors subsequent to the form first adopted and agreed upon by them after their incorporation, and avers that the form in the present case is the same which was then adopted; and which was settled by the president and directors upon mature advice and deliberation, and with the express intent that the president and directors might know the nature, character, quality, and condition of every person whose interest they might insure, and to protect themselves from all responsibility and hazard on account of the interest of any person or persons not named in the policy; and that the said printed form had been openly and continually used by the company, of which all persons procuring insurance to be done at their office had notice; and that a like form had been used at the other offices in Boston for more than a year before the 14th of June 1800.

Elisha Sigourney stated in evidence that about the 12th of May 1800 he showed Graves's letter of the 5th of May to a person writing as clerk in the office of the defendants, and left it with him till the next morning, when the clerk informed him the terms on which the president and directors would insure.

That at the time of effecting the insurance, he did not know that the form adopted by that insurance company differed from the usual form; but supposed the interest of all concerned was insured.

The deposition of Andrew Sigourney stated, that on the 14th of June, when he made application for insurance, he showed to Mr. May, the secretary of the company, only the instructions on the back of the letter of the 15th of May, and a memorandum to insert the words 'as property may appear.' That he did not read any but the written part of the policy before he took it from the office. That at the time of making the application he did not mention the name of any person as interested in that insurance except the name of John Boonen Graves. He only showed the instructions.

That he knew by the letter of Graves that he had partners, but he did not know the name of any of them: he supposed that the policy covered the interest of all concerned, and had no notice of any variation from the customary form of policies.

The deposition of Mr. May, the secretary of the company, stated that the only paper which A. Sigourney showed him on the 14th of June, when he applied for insurance, was a copy of a proposal made to some other offices for insurance on the same risk; and that he did not leave it, but only showed it to the deponent. That he, the secretary, filled the policy; and understood the insurance was for Graves, and for no one else, as the policy purports. That he is not sensible of any error in the filling it; that he filled it as he understood the intention of the parties in the contract. That A. Sigourney read it over deliberately before he gave the premium note; and after reading it went away. He afterwards returned and requested the secretary to add to it the words 'as property may appear,' which by permission of the president were interlined.

The first policy written by the company was dated the 3d of April 1799. The president and directors had made no alteration in the printed form of policies from their first commencing business until the 14th of June 1800.

On the 9th of May, E. Sigourney and Sons, in answer to Graves's letter of the 5th, say that the gentlemen will not insure under 20 per cent. premium.

On the 15th of May, Graves requested insurance to be made 'for 21,000 dollars on the ship valued at that sum; and 16,000 dollars on the cargo as interest shall appear. The latter completes the sum intended to insure on the cargo. Your policy therefore being the last dated, it is understood that short interest (if any should appear) is to be settled with your underwriters.'

On the 3d of June, E. Sigourney and Sons wrote to Graves that '5900 dollars is done on your policy on the cargo. It goes on very...