Head Amory v. Providence Insurance Company

• Decision Date: 01 February 1804
• Citation: 2 L.Ed. 229,2 Cranch 127,6 U.S. 127
• Parties: HEAD and AMORY v. The PROVIDENCE INSURANCE COMPANY
• Court: U.S. Supreme Court

6 U.S. 127

2 Cranch 127

2 L.Ed. 229

HEAD and AMORY v. The PROVIDENCE INSURANCE COMPANY.

February Term, 1804

THIS was a writ of error to the circuit court of the first circuit, held at Providence, Rhode Island, under the act of congress of the 13th of February 1801. In that court the plaintiffs in error brought their action on two policies of insurance; one policy being for ten thousand dollars upon merchandize on board the Spanish brig Nueva Empressa, the other policy being upon the vessel the Nueva Empressa.

The vessel was chased into Havanna by British cruizers, and after remaining there some time she sailed for her port of destination, on which voyage she was captured by a British cruizer and sent into St. John's, Newfoundland, where both ship and cargo were condemned as prize.

The jury under the charge of the court found a verdict for the defendants, the underwriters, on the count claiming a loss on the policy on the cargo; and for the plaintiffs on the count claiming a loss on the policy on the ship. A bill of exceptions was tendered to the charge of the court by the plaintiffs, and they brought this writ of error. The facts of the case are fully stated in the opinion of the court.

[Statement of Case from pages 128-130 intentionally omitted]

'We have your favour under the 2d instant, handing us a copy of a note received from the president of the Providence Insurance Company. When we consented to their proposition of settling the policy by paying twenty-five per cent, it was not because it was most agreeable to us. We wished to make it conditional, as has been done in this town; and we had a right to suppose when we consented to their terms, the business was settled. If we can succeed with the Spanish government, the policies

on vessel and freight will be withdrawn of course at the usual custom; but we do not think it right to make one the condition of the other. If we make this settlement, we shall make every effort by money and interest to have the adventure terminate at the Havanna, and the sooner we know the better. By the last accounts the vessel was very much eaten by the worms, and wanted very great repairs. This, we hope, will induce them to grant us the permission. The terms we acceded to were very favourable to the company, as it was paying them at the rate of thirty-five per cent. for the outward premium.'

September 6, 1800.

'As there appears to have been a misunderstanding in the business as it respects the first propositions of the company, the directors are willing to accede to Messrs. Head and Amory's proposition, viz. to settle the policy on the merchandise, at twenty-five per cent, although it was their intention and expectation to have both policies included in the settlement. Messrs. Head and Amory will please to forward the policy and have it cancelled immediately. Premium-note due 12-15 September.

'You will please to govern yourself accordingly, and we will attend to your wishes.'

[Argument of Counsel from pages 133-162 intentionally omitted]

Page 163

Mr.Chief Justice MARSHALL delivered the opinion of the court.

This is a declaration on a policy of insurance, and the only question in the case is, whether the policy was vacated by a subsequent agreement between the parties. This question depends entirely on the legal operation of certain written communications between them, which appear in the record.

Messrs. Head and Amory of Boston had obtained insurance through their correspondents, Messrs. Brown and Ives of Providence, on the cargo of the Spanish brig the Nueva Empressa, at and from Malaga to Vera Cruz, and at and from thence to her port of discharge in Spain. An insurance was afterwards obtained on the brig at and from Cuba, (she having been chased into the Havanna by British cruisers,) to her port of delivery in Spain.

The vessel having been detained in port, closely watched by cruisers till she was worm eaten, Head and Amory became desirous of terminating their risk at the Havanna,

Page 164

which could only be effected by permission of the government at that place, which was not to be obtained but with considerable expense. They therefore applied to the insurance company, through their correspondents, Brown and Ives, by a letter dated Boston, the 21st of August 1800, to know whether a conditional permission could be obtained from the underwriters, to terminate the voyage at the Havanna, provided the consent of the government could be obtained; and if so, in what terms that conditional permission would be granted.The underwriters refused to make any conditional agreement, but offered to vacate both policies on terms mentioned in a letter signed by their president.

Misunderstanding the letter as a proposition for vacating the policy on the cargo only, the terms proposed were acceded to, and a letter was written from Head and Amory to Brown and Ives, declaring their acceptance of the proposition understood to be made by the insurance company, in such a manner as very clearly to show the mistake under which it was written. On seeing this letter, the misapprehension of the parties was discovered and explained, and the agreement considered as not being made; at the same time a new proposition was made for settling both policies. To this letter declining absolutely any agreement respecting either policy singly, and proposing specific terms on which they would settle both, Head and Amory returned an answer dated the 3d of September 1800, which was addressed to Brown and Ives, and is in these words: This letter was laid by Brown and Ives before the company, and their secretary returned the following note without a signature.

This note was forwarded by Brown and Ives to Messrs. Head and Amory, but before they received it, intelligence came to hand that the Nueva Empressa had sailed from the Havanna, and had been captured, and was condemned as a prize late in the month of August. Head and Amory therefore insisted on their policy.

Page 165

Everything respecting the delays in the communications is laid out of the case, because they do not appear to the court in any manner to affect it.

Richard Jackson, the president of another Marine Insurance Company, was also examined, and testified that in effecting insurance, or settling a policy, or making any adjustment or agreement about insurance, the assent of the parties to doing a thing was in all respects as binding on the parties, as the thing done, according to the usage and practice among underwriters.

Upon this testimony, the court...