Thwing v. Great Western Insurance , 111 Mass. 93 ( 1872 )

Gray, J.

After a careful examination, in the light of the able arguments of counsel, of the voluminous record upon which these two cases have been submitted to us, we have not found it necessary to decide any question of fact upon which the testimony is conflicting, because we are of opinion that the principles of law already settled by the judgments of this court are decisive of the merits of the controversy.

The two principal legal questions at issue in the action at law were, 1st. Whether insurers of a vessel against perils of the sea, including collisions, are liable for the amount which the assured is compelled to pay for the injury done by a collision occasioned by fault of her master and mariners to another vessel; and 2d. Wffiether a warranty “ not to load more than her registered tonnage with ” either or all of certain articles, including coal, is broken by taking on board and carrying,- (besides that amount of coal and other prohibited articles as cargo,) and receiving freight for, a quantity of coal as dunnage, found by the jury to be a suitable material, not more than was reasonably necessary, and actually and in good faith used, for that purpose.

Each of these questions has been decided, after full argument and much deliberation, by a unanimous judgment of this court, in accordance with a previous decision of the Circuit Court of the ■United States in this district, in favor of the assured. Upon each, the Supreme Court of the United States has since come to a different conclusion. With the greatest deference to the opinions of that court, and fully appreciating the inconvenience of conflicting rules in the state and federal courts upon questions of mercantile law, we are constrained by our sense of judicial duty to adhere to the original decisions.

Upon the second of these questions, on which the validity of the whole policy depends, the decision of this court was made in this very case, overruling exceptions to the ruling of a justice of this court at the trial, in harmony with the ruling made in the Circuit Court of the United States at the trial of an action brought by the insurers against the assured to recover back the amount of a partial loss paid under the same policy, and affirmed % by the concurrent opinions of Mr. Justice Clifford and Judge Lowell after re-argument on a motion for a new trial. Thwing v. Great Western Ins. Co. 103 Mass. 401. Great Western Ins. Co. v. Thwing, 1 Lowell, 444. The judgment reported in 13 Wall. 672, by which the Supreme Court of the United States, by the opinion of five judges against three, reversed the ruling of the Circuit Court, appears to us, after that thorough and respectful consideration which the opinions of the highest judicial tribunal of the nation are entitled to receive, even upon a matter in which we are not bound by its adjudication, to be based upon the position that an article for which freight is paid cannot be received and used as dunnage, strictly so called ; and has not enabled us to divest ourselves of the opinion which we originally entertained, that that position depends upon a pure question of fact, of which we have no judicial knowledge, and which has been conclusively settled by the verdict of the jury.

Upon the other question, arising under the first count of the declaration, the decision made by this court more than twenty years ago in the case of Nelson v. Suffolk Ins. Co. 8 Cush. 477 following a decision of Mr. Justice Story in Hale v. Washington Ins. Co. 2 Story, 176, has, notwithstanding the opposing decision soon afterwards made by the Supreme Court of the United States in General Ins. Co. v. Sherwood, 14 How. 351, been repeatedly affirmed by this court, as having settled the law of this Commonwealth, in view of which all contracts since made here, containing no new and controlling clauses upon the subject, must be deemed to have been entered into. Walker v. Boston Ins. Co. 14 Gray, 288. Blanchard v. Equitable Safety Ins. Co. 12 Allen, 386.

The policy executed by the Great Western Insurance Company, embodying and superseding the previous negotiations and agreements between the parties, was delivered and accepted, and the premium note signed by the assured, in Boston. The contract in suit was therefore made in Massachusetts, and must be governed by our law. Heebner v. Eagle Ins. Co. 10 Gray, 131.

The conflicting evidence of the general understanding or usage in New York or Boston cannot control the established legal construction of the written contract. Eager v. Atlas Ins. Co. 14 Pick. 141. Seccomb v. Provincial Ins. Co. 10 Allen, 305.

It is immaterial that the insurance company had not previously appointed such an agent as our statutes required, on whom process might be served in this Commonwealth. Before the appointment of such an agent, the assured, a citizen of Massachusetts, might have sued the company here, if he had found any of its attachable property within the jurisdiction. Such an agent was appointed long before this action was brought, and the company has answered and gone to trial on the merits. The possibility that it might have evaded our jurisdiction, if sued at an earlier period, cannot affect the legal interpretation and effect of the contract.

The question of the liability of the insured ship for the injury done to the other vessel by the collision was litigated in good faith by the assured in an English court of admiralty, and the amount of that injury, after an adverse decision of that court upon the general question, fairly adjusted between the agents of the owners of the two vessels, and paid by the assured according to that adjustment. Under these circumstances, the fact that the insurance company had no notice of, or opportunity to contest, that suit, affords no ground for exempting them from liability for their proportion of the amount so paid. Hale v. Washington Ins. Co. 2 Story, 176. Blanchard v. Equitable Safety Ins. Co. 12 Allen, 386. Swansey v. Chace, 16 Gray, 303.

Nor can the insurance company be now permitted to avail itself of the want of formal notice and proof of this claim, in order to defeat a recovery. When an insurer, with knowledge of a claim made under a policy, rests his defence exclusively on other grounds, he is deemed to have waived all objections to the seasonableness and sufficiency of the notice and proofs of loss. Martin v. Fishing Ins. Co. 20 Pick. 389. Vos v. Robinson, 9 Johns. 192. Tayloe v. Merchants’ Ins. Co. 9 How. 390. The declaration filed in April 1868 in the action at law was notice to the defendants that the plaintiff claimed to recover of them the amount paid by him for the injury to the other vessel by the collision. The answer of the defendants put that claim in issue. The agreement filed in the case in August 1869 for the trial of the principal questions by a jury or an assessor, without reserving any objection to the want of notice or proofs of any part of the loss claimed, was a waiver of all such objections.

The application on the law side of the court to set aside that agreement, and the bill in equity to reform the policy, were both filed more than three years after the insurance company had notice by the declaration of the nature and amount of the plaintiff’s claims, more than two years after entering into the agreement in question, and after a trial by a jury of the issues submitted to them, argument and decision in the full court upon the exceptions taken at that trial, and subsequent reference of the sase to an assessor, in accordance with that agreement. To grant the relief asked for, in either form, after such a delay, would be ■jo reward inattention and loches at the expense of the party who had been duly vigilant in invoking the assistance of the court to secure his rights. Ryder v. Phoenix Ins. Co. 101 Mass. 548. Paddock v. Commercial Ins. Co. 104 Mass. 521. Conant v. Perkins, 107 Mass. 79.

The application to set aside the agreement filed in the action at law before the trial must therefore be denied, and the bill in equity dismissed, with costs.

Two minor questions, relating to the assessment of damages, remain to be considered.

The one is of the date from which interest shall be computed, on the amount paid by the assured for the injury to the other vessel by the collision. No demand for payment of that claim appears to have been made upon, or notice of its existence given to, the insurance company before suing them upon the policy. They could not be in default for not paying it while they were ignorant of its existence. The interest thereon must therefore be computed from the date of the writ.

The other arises upon the last paragraph of the additional agreement of the parties, filed pending the proceedings before the assessor. The paragraph is not quite grammatical, but, fairly construed, it seems to us to reserve the right to either party to offer proof of the dates and amounts of other policies, if deemed by the court to be material. As, by the terms of the policy in suit, prior insurances are to be taken into consideration, and subsequent insurances are not, in computing the amount of this company’s liability, proof of the amounts of such prior insurances might be material, and the case is,

For this purpose only, recommitted to the assessor.