Georgia Insurance & Trust Co. v. Dawson , 2 Gill 365 ( 1844 )

Magruder, J.,

delivered the opinion of this court.

The defendants in error, being about to ship a quantity of tin from New York to Baltimore, the plaintiff in error undertook, for the premium agreed upon, to insure the same to the amount of $3,500, shipped, or to be shipped on board the schooner Edward Vincent, at and from New York to Baltimore.

On the voyage, the vessel encountered gales and storms, which caused her to leak badly, and the tin insured was discovered, on its arrival at Baltimore, to be damaged by salt water, in consequence of the gales and storms, which the vessel encountered, and for the amount of the damages done to the property insured as aforesaid, this action was brought.

These facts are not denied, but the plaintiff in error resists the claim, upon the ground that the tin insured was stowed upon sand ballast, and badly and insufficiently dunnaged, and that the risk was greater, than if the stowage and dunnage of the same, had been usual, sufficient, and proper. These facts too, the points which were raised, in the court below, require us to assume.

A verdict having been obtained by the defendants in error, a motion in arrest of judgment was made, and this because, as was contended, the remedy which is given against foreign corporations by the act of 1832, ch. 280, is taken away by a subsequent law, passed in 1834, ch. 89. This motion was properly over-ruled. The latter gives, and was designed to give, to the creditors of such corporations, an additional remedy, and cannot be interpreted to deprive the defendant in error, of the remedy which the previous law afforded to him.

The questions which remain to be decided, are presented by the bills of exceptions, taken in the progress of the trial, by the plaintiffs in error.

On the part of the defendant, it is contended, that the damage done to the tin, was occasioned by the perils of the sea, and that the gales and tempests, which the vessel encountered, being the proximate cause of the loss, they are entitled to recover, even although his adversary has found in wrong stowage and dunnage, what is called a remote cause of such damage.

Much of controversy has arisen upon the question, which is here presented, and by many it has been insisted, that;' although the loss be occasioned by any of the perils mentioned in the policy, yet the insurer is not liable, if there can be found another and remote cause of the loss, and it can be ascribed to misconduct, or negligence of the captain and crew, the same not amounting to barratry. Chancellor Kent, in the chapter of his Commentaries, which treats of the law of insurance, (in the edition of 1828,) refers to decisions, for and against the insurer, and adds: “It may be expedient to suspend our own judgment, under such a sad uncertainty of the law, and leave the question for further judicial investigation, since an eminent judge of the Supreme Court of the United States, (Justice Story,} has thought proper to take this course.” A number of decisions, both in England and this country have, since then, taken place on this once very vexed question, and in 1837, (see 11th Peters 220,) Justice Story said, that in the case, 10 Peters 507, “the court thought, that, in marine policies, whether containing the risk of barratry or' not, a loss whose proximate cause was a peril insured against,: is within the protection of the policy, notwithstanding, it might have been occasioned remotely by the'negligence of the master and mariners. We see no reason to change that opinion; and, on the contrary, upon the present argument, we are confirmed in it.” In these two cases, (10 11 Peters,) are cited most of the English cases, in which the question was decided. The reported decisions-of some of our sister States-, furnish other cases, establishing the same doctrine, and this court can feel no disposition, in deciding this case, to depart from the rule stare decisis. It is to be understood then to be the settled law of Maryland, “that the underwriters are liable for a loss, the proximate cause of which, is one of the enumerated risks, though the remote cause may be traced to the negligence of the master and mariners.”

It is however contended by the plaintiff in error, that the cases referred to- do not settle the law of this case; that these cases only establish, that a policy, which being once attached, is not discharged by reason of the remote cause of the loss or damage sustained by the assured, but in the case now under consideration, the question is, whether the policy ever attached? The reason of this distinction, however, between this and the other cases is not perceived. The policy is on a cargo, shipped, or to be shipped on board of a vessel, at and from New York to Baltimore. If the policy had said not “at and from,” but “from N. York to Baltimore,” the risk would have commenced only when the vessel broke ground; but as the 1 anguage here used, is “at and from New York to Baltimore,” it is understood, to “include all the time the ship is in port, after the policy is subscribed, and the goods are on board, 4"c.”

The owners, &c., of the vessel, it is said, are the agents of the assured, and are answerable to the shippers for any damage, which is the consequence of bad stowage. This may be so, but still we are told, 2 Barn. $• Aid. 82, that “a loss, whose proximate cause, is one of the enumerated risks in the policy, is chargeable to the underwriters; although the remote cause may be traced to the negligence of the master and mariners.” The act of insuring, is the voluntary act of the insurer; he can prescribe the terms on which he will underwrite; may undertake as few or as many risks as he pleases, and in the policy of insurance, may, if he thinks proper, insert such clauses as will secure him against all liability, if the stowage and dunnage be not as they ought to be. If there be no such express warranty on the part of the owner of the cargo, still the underwriter may rely on the implied warranty, and is discharged, if the warranty express or implied, will exonerate him. Now, it is not pretended, that in this case the underwriter can claim to be discharged, by any express warranty. Does the implied warranty furnish him with a defence ? By effecting a policy, whether it be on the ship, freight, or cargo, or the commissions or profits, to accrue upon the cargo, the assured is always understood to warrant, that the ship is sea-worthy, or the materials of which the ship is made, its construction, the qualifications of the captain, the number and description of the crew, the tackles, sails and rigging, stores, equipment and outfit generally, are such as to render the ship, in every respect, fit for the voyage insured. Phillips on Insurance, 113. (Am. edit., 1823.) The policy implies the seaworthiness of the ship. To render a ship seaworthy, it must be staunch, and of sound materials, or rather, it must be sufficiently staunch and sound, for the employment or situation intended by the insurance. Phillips 113. The author then proceeds to explain, that this relates to the beginning of the risk, that the breach of the warranty, discharges the underwriter from all subsequent liability; that the vessel must be of proper construction, must have sufficient stores and supplies, must have a skilful master and competent crew, and a competent pilot, where it is customary to take one, but no where tells us, that this warranty ex vi termini, implies any thing, with regard to the stowage or dunnage of the vessel, which it certainly would be unreasonable to expect, that the owners of the articles insured, would attend to.

But it is said, that the liability of the insurer does not commence, until the articles insured are placed as they ought to be. In 3rd Kent, 310, (3rd edit.,) the doctrine is not so laid down.

There would seem to be no good reason for this, as it is generally understood, that afterwards, and even after the vessel has left the port for some time, it is the right, and generally the duty of the master, to arrange the cargo differently, to trim the ship; and it is not contended, that because of a mistake then committed, the underwriter must be discharged.

The owners of the ship, it is said, are answerable to the shipper, for any damage in consequence of bad stowage. It does not thence follow, that the underwriter is discharged. If damages are to be recovered, because of the manner in which goods on board of a vessel are stowed away, it would seem to be but right, that in the action, which is to decide whether the damage was the result of bad stowage, the owner should be the party defendant, and that such a question should not arise in an action, upon the policy of insurance; and who is so fit a person to be the plaintiff in the action, to recover damages for any such negligence or unskilfulness, as the insurer himself, who by relying on such a defence, proves, that he is in possession of the proof, and if there had been no subsequent loss or damage of the articles insured, might have retained the premium, and concealed the damage occasioned by the bad stowage, which perhaps, lessened the value of the article when sold? If the insurer be, as he alleges, in possession of proof, to fix the loss of the cargo upon the owner or captain, he becomes entitled, upon payment of the amount of he loss or damage, to stand in the place of the owner, and to be subrogated to all his rights against the person answerable for bad stowage or dunnage.

The conclusive answer however, to all that was urged on this subject, is to be found in the decisions alluded to, in England and America, and which have established, that in case of loss, the consequence of the negligence or fault of the assured, their agents or servants, the underwriters will be liable, provided the proximate cause of the loss or damage be one of the enumerated risks in the policy. The good effects which are anticipated by an adherence in such cases to the maxim, “causa próxima, non remota spedaturf would be entirely lost, if in an action upon the policy, the defendant might insist upon one, yet more remote than the remote cause, which it is settled, can furnish the insurer with no defence. In the case of Waltron vs. Maitland, 5 Barnwell & Alde. 174, the judge said, “no decision can be cited, wherein such a case, (the loss by a peril of the sea,) the underwriters have been held to be excused, in consequence of the loss having been remotely occasioned by the negligence of the crew. I am afraid of laying down any such rule, It will introduce an infinite number of questions as to the quantum of care, which, if used, might have prevented the loss.” Justice Story, in delivering the opinion of the court, in Waters vs. Louisville Insurance Company, observes, “if negligence of the master or crew were, under such circumstances, a good defence, it would be perfectly competent and proper to examine on the trial, any single transaction of the whole voyage, and every incident of the navigation of the whole voyage, whether there was due diligence, in all respects, in hoisting or taking in sail, in steering the course, in trimming the ship, in selecting the route, in stopping in port, in hastening or retarding the operations of the voyage; for all these might be remotely connected with the loss. If there had been more diligence, or less negligence, the peril might have been avoided, or escaped, or never encountered at all. Under such circumstances, the chance of a recovery upon a policy, for any loss, from the peril insured against, would of itself, be a risk of no inconsiderable hazard and surely, this reasoning, applies to the case now under consideration, and to the defence which is relied on. Policies of insurance would seldom be contracts of indemnity, if, when the actual peril insured against has occurred, the payment of the loss depended upon every act, in regard to the properly insured, which, by possibility, might have increased the risk of loss.

The court can discover no error, either in the instruction which was given, at the instance of the counsel, for the plaintiff below, or in the refusal to give the instructions, which were asked by the defendant below.

JUDGMENT AFFIRMED.