Blanchard v. Equitable Safety Insurance , 94 Mass. 386 ( 1866 )

Bigelow, C. J.

The law of this commonwealth, that insurers are liable for the amount paid for damages done by a vessel insured to another vessel by reason of collision, was settled on the most full and deliberate consideration in Nelson v. Suffolk Ins. Co. 8 Cush. 477; and the rule was reaffirmed in Walker v, Boston Ins. Co. 14 Gray, 288. We see no good reason for reconsidering the question thus settled. No new arguments have been suggested in addition to those which were urged in the original case, nor has the weight of authority against the rule established by this court increased since its reaffirmance in the case last above cited. The only consideration pressed on our attention by the learned counsel for the defendants is, that uniformity and harmony in the decisions of courts upon questions of commercial law are important, as tending to give stability and certainty to the rights and obligations of parties under their contracts. This suggestion would certainly be entitled to great weight if we were now called on for the first time to decide which one of the two opposing views of the law we should adopt; but it has but little if any weight as an argument in favor of changing a rule of law which has once been deliberately settled; especially when it may be reasonably supposed that parties have acted on the rule of law as declared by this tribunal, and have framed their contracts with reference to it. The liability of insurers for damages done to another vessel by collision with a vessel insured, under the law as settled in this commonwealth, has been well understood by merchants and underwriters during the past ten or fifteen years. If parties in making their contracts did not intend to be bound by this rule, the risk of loss arising from such cause could be easily avoided by excepting it from the risks covered by the policy; but in the absence of any express stipulation, the presumption is that parties intended to include the risk in their contracts of insurance, and great injustice might be done if we were now to reconsider our previous adjudications, and establish a different rule by which to interpret the terms of the policy. Considerations of mere expediency may enter largely into the discussion of a question of law, when the point to be determined is what the rule relating to a particular subject ought to be; but they can have no place as an element in determining whether a rule of law, which has been once settled upon principle, ought to be changed. Taking then the rule as settled in this commonwealth to be the law by which this case is to be governed, there is no doubt that the loss in the present case was within the policy.

We understand the practice to be fully established, that all necessary legal expenses and charges, including the fees of counsel and the commissions of an agent, if fairly and properly incurred in defending against a claim on the vessel or her owners for which the underwriters are liable, may be included in estimating the amount of the loss to be recovered under the policy This practice rests on the principle that the contract of insurance is one of indemnity, and that the assured is entitled to recover back all expenses and charges reasonably attributable to a peril insured against, and necessarily incurred to save a forfeiture or condemnation of the subject insured, by reason thereof. Hale v. Washington Ins. Co. 2 Story R. 176,189. Dorr v. Union Ins Co. 8 Mass. 494, 502. Spafford v. Dodge, 14 Mass. 66, 74. Orrok v. Commonwealth Ins. Co. 21 Pick. 456.

Upon the same principle of indemnity to the assured under his policy, he has a right to recover the premium for exchange which he has paid in order to enable him to remit the amount of his share of the money payable in England by reason of the damage caused by a peril insured against. It is true, as the defendants contend, that the contract of insurance was made here and that a loss under the policy is payable in the currency of this country. But it is not an agreement to pay an absolute fixed sum here in dollars. The contract is to pay such sum in dollars, within the amount insured, as , the plaintiff might be compelled to pay in a foreign country by reason of a peril insured against. It is only for the amount actually paid by the plaintiff in order to remit to England the amount of the damages sustained in consequence of the collision, that he now seeks to recover. He certainly does not receive an indemnity, unless the same amount is refunded by the defendants which he has been compelled to pay in consequence of a loss within the policy. The cases cited and relied on by the defendants’ counsel in support of this part of the defence are wholly unlike the case at bar. Neither of them was on an agreement to indemnify a party for a sum of money which he had been compelled to pay in a foreign country. Judgment for the plaintiff.