French v. Hope Insurance , 33 Mass. 397 ( 1835 )

Putnam J.

delivered the opinion of the Court. Ever since the case of Grant v. Parkinson, reported in Park, 267, (c. 14), and in Marshall, bk. 1, c. 4, § 2, and bk. 1, c. 3, § 8, it has been understood that profits were insurable. There are various cases m which the doctrine has been recognised, most of which have been cited in this case. And we perceive no good reason against it. If it be lawful to insure freight, as the earnings expected to arise from the employment of the ship, it would seem equally reasonable and expedient to insure profits expected from goods or from any thing else exposed to marine peril. So that the only question in this case is, whether the plaintiff had any interest in the subject matter insured.

And upon that question, we have no doubt, but that by the agreement in the case between the plaintiff and Rix, the plaintiff had a substantial interest at risk. For if the ship had safely arrived with the merchandise mentioned in the policy, the plaintiff would have been entitled to profits: if she were lost, he would have lost the profits which were expected. The objection principally relied upon by the counsel for the defendants is, that the plaintiff was not the owner of the merchan dise, that he could not have insured the goods, and a fortiori, not the profits on the goods, which did not belong to him. The rule, if received to the extent laid down, would prevent the insurance of commissions on goods consigned to the plaintiff. In such a case put by Lord Ellenborough in Stirling v. Vaughan, 11 East, 629, his Lordship observed : “ The indefeasibility of the property therefore is not the criterion of an insurable interest.” If, in the case of a consignee, the goods should arrive safely, he would be entitled to commissions upon the sale. So, in the case at bar, if the goods had arrived, the ' plaintiff would have realized a profit. The cases seem to us t0 be perfectly analogous. In each the party claiming profits or commissions has either to run the risk and bear the loss himself, or to get insurance against marine risk. In each case he has a real interest to protect.

The plaintiff paid a valuable consideration for the profits insured by him, and the transaction is not impeached on the ground of fraud. Now we know no good reason why an owner of goods at sea may not sell the profits expected upon the termination of the voyage, as well as the goods themselves, or the principal or capital employed. Why may not the owner of the ship sell the ship to one man, and the freight • to another ? If, in the former case, there were an insurance on goods, and an abandonment or payment of a total loss, the profits would incidentally follow the principal subject, and would belong to the insurer of the goods. And so of insu- ' ranee upon the ship, and payment of a total loss, the underwriters would be entitled to the freight. But that consideration does not affect the present question, viz. whether profits may be insured by one who has not the absolute property in the goods, by a valued policy honestly made. We think such contract is valid.

There was a very small salvage in this case, and the counsel for the defendants contended, that if there should be judgment for the plaintiff, it should be only for a partial loss. But upon examining the evidence it does not appear that any part of what was saved, w7as delivered or paid to the plaintiff. It was received by Rix, who will hold the same for the account of the underwriters upon the goods. In respect to the plaintiff the loss is total; and the judgment must be entered for him accordingly.