Chase v. Alliance Insurance

Hoar, J.^*

The first question which the case presents is, whether the payment on account of freight stipulated in the charter party, and which was made before the vessel sailed from Greenock, can be recovered back by the charterer from the insured. If it can, then the whole valued freight was at risk at the time of the loss, and the plaintiff is entitled to recover.

“ The general rule of law,” as was said by the chief justice in the recent case of Benner v. Equitable Ins. Co. 6 Allen, 222, “ is, that freight paid in advance is not earned, unless the voyage for which it is stipulated to be paid is fully performed; and the owner of the vessel is liable to a claim for reimbursement in favor of the shipper, if for any fault not imputable to the latter the contract of affreightment is not fulfilled. This rule may be varied or annulled by an express agreement in the charter party or bill of lading, by which it is provided that money paid in advance on account of the freight shall be deemed to be absolutely due to the owner at the time of its prepayment, and not in any degree dependent on the contingency of the performance of the contemplated voyage, and the entire fulfilment of the contiact of carriage. But as such a stipulation is intended to control the usual rule of law applicable to such contracts, and to substitute in its place a positive agreement of the parties, it is necessary to express it in terms so clear and unambiguous as to leave no doubt that such was the intention in framing the contract of affreightment. Otherwise, the general rule of law must prevail.” The doctrine thus stated, and which was held upon full consideration in Minturn v. Warren Ins. Co. 2 Allen, 86, renders any discussion of the general proposition unnecessary, that a payment made in advance for freight may be recovered back, if the freight is not earned, in the absence of any express agreement to the contrary.

But the charter party in the case before us was made in Scotland, and is therefore a contract to be governed by the law of Scotland, if that law differs from the law of Massachusetts, and not by the law of this commonwealth.

We do not find that the precise point has ever been expressly adjudicated by any Scottish court; nor has any case been cited which is a direct authority in point. The defendants have relied in argument upon a series of English decisions which are more or less at variance with the decisions of this court upon the subject, and upon citations of Scotch authorities to show that the mercantile law of Scotland is generally the same with that of England.

But while we can have no doubt that the decisions of English courts would be regarded as of the highest authority by any Scotch tribunal upon a question of commercial law, we do not find that these decisions are binding upon the courts of Scot land. The question is not one of local jurisprudence, but of the construction and effect of a commercial contract, on which the role adopted by any local tribunal, if it seems to be erroneous npon general principles, must be confined to the jurisdiction within which it is made. Wood v. Corl, 4 Met. 203. Cribbs v. Adams, 13 Gray, 597. The general doctrine of the English cases, although they do not seem to be wholly consistent or founded on any clear and uniform principle, appears to be that a payment of freight in advance cannot be recovered back, unless it is made to appear affirmatively that it was intended by the parties merely as a loan. But as we do not regard these decisions as correct in principle, we must treat them as indicating a local peculiarity of English law, which is not to be extended beyond the jurisdiction in which it is shown to have been adopted. It appears to us inconsistent not only with sound principles of construction in the interpretation of the contracts to which it applies, but also irreconcilable with the general principles relating to affreightment which have been recognized by the judges and approved text writers of Scotland.

Coming to this conclusion, the plaintiff is entitled to recover upon the facts agreed; and it is not necessary to consider the other question which has been elaborately argued, whether, under the English decisions, the freight to which the valuation in this policy applies would be only that which remained at risk after the advance payment had been made under the charter party.

We have held this case for a considerable time under advisement, and have carefully examined the authorities cited by counsel, although we do not consider an extended review of them advisable. Since the decision was made, but before it was announced, the counsel for the defendants have formally presented a motion, which was suggested at the close of their argument, to discharge the statement of facts so far as to allow testimony to be taken to prove the law of Scotland as a fact in the case. The suggestion certainly came very late at the time when it was first made. The parties had elected to submit the case to the court as it stood; and the argument had been made upon that basis. But as there is no suggestion that there is any statute or judicial decision applicable to the question which is not already accessible to the court, we see no sufficient reason to believe that justice would be promoted by further delay, of that any substantial change would be made in the position of the cause as it was at first submitted by the parties.

Judgment for the plaintiff.

* Bigelow, C. J. did not sit in this case.