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If the charterer is to pay for the hire of the vessel only ou her safe arrival at the port of destination, the owner may insure the amount of the charter-money as freight, but the charterer cannot, because, if the vessel is lost, he pays nothing and so loses nothing, but it is said, that if a charterer has received goods on board from another party, who has engaged to pay him more than he is to pay for the hire of the vessel, he may now insure his interest in the freight.
The questions which have arisen on this subject are certainly difficult, and the authorities have been thought to be irreconcilable. We think that principles may be found, which will suffice to guide one through this apparent confusion. These cases are considered in our note.3
that unless the answer specially denies the fact that freight was paid in advance, the fact need not be proved.
1 Robbins v. New York Ins. Co., 1 Hall, 325 ; Mellen v. National Ins. Co., 1 Hall, 452.
2 Clark v. Ocean Ins. Co., 16 Pick. 289.
8 Mr. Phillips (1 Ins. ☺ 480) considers some of the decisions upon the application of the term freight, in cases where there have been charter-parties, irreconcilable. But it seems to us, after a careful consideration of them, that they may be reconciled with each other and with principle. It must be kept in mind that freight must belong either to the absolute owner or to the owner pro hac vice. Sec opinion of Putnam, J., in Clark v. Ocean Ins. Co., 16 Pick. 289. It has been universally admitted that the owner may insure, under the term freight, either what is to be paid him directly for the carriage of goods, or what is to be paid by a charterer. The difficulty is supposed to arise, when a charterer insures freight, in determining whether the term is to be applied, either to what he is to receive for carrying the goods of others, or to the increased value, which he expects will accrue from the carriage of his own goods.
That it will apply to the former, provided the charterer has any interest at risk, is virtually decided in the case of Clark v. Ocean Ins. Co.; for it is obvious that if the term freight will apply to that part of the amount to be so received by which it exceeds the amount to be paid under the charter, it will apply to the whole. The case of Riley v. Delafield, 7 Johns. 522, does not appear to us to conflict with this doctrine, In that case the plaintiff had owned the vessel and had chartered her to K. He then sold the vessel to H., and it was agreed that the plaintiff should have the whole benefit of the freight for the voyage upon which she was chartered. The plaintiff then insured "on the freight” for that voyage, without making any disclosures as to the nature of his interest. It was held, that there could be no recovery. 1. Because "all the interest of the plaintiff was founded upon this special agreement, and it could not strictly or technically be denominated freight, since it was not an interest accruing to the plaintiff, as owner of the vessel for the use of her.” 2. Because there was a material concealment. The first reason seems to be a sound one, for the plaintiff was not charterer, as the vessel was chartered to K., nor was he the general owner, nor in any sense could he be considered the owner pro hac vice, and the case, therefore, does not seem to conflict
If a party has a lien on freight by advancing money upon it, he can insure his interest under the name of freight.
There is a rule resting on public policy and expediency, that goods carried on deck, are not covered by a general policy on cargo, or property, or goods. But there prevails also an exceptional usage in some ports, to carry any goods on deck on certain voyages or passages ; and in others, to carry particular goods in this way, on certain voyages. The cases are quite numerous on this subject, and present some anomalies. But whatever the usage may be, if it be distinctly established, and
with the decision in Clark v. Ocean Ins. Co., or with the doctrine which we have supposed necessarily to follow from it. We find no other case which seems to conflict with it. In Mellen v. National Ins. Co., 1 Hall, 452, 463, the plaintiff, on the arrival of the vessel, was to receive a certain amount for carrying goods and to pay an equal or greater amount as charterer. Of course he would lose nothing if she did not arrive, and hence the court held, that he had no insurable interest.
We think it clear, therefore, on principle and authority, that a charterer may insure under the name of freight what he is to receive for carrying the goods of others, provided that amount is at his risk.
Another question is, whether a charterer can recover the increased value which accrues from the carriage of his own goods under the name of freight. From the cases cited ante, p. 205, n. 4, it appears that a general owner may recover this under the name of freight, and it would seem at first to follow that a charterer, or owner pro hac rice, could do the same. But it has been held otherwise, on the ground that the amount paid under the charter-party is to be considered the freight. Cheriot v. Barker, 2 Johns. 346; Mellen v. National Ins. Co., 1 Hall, 452, 463.
1 Robbins v. New York Ins. Co., 1 Hall, 325; Hall v. Janson, 4 Ellis & B. 500, 29 Eng. L. & Eq. 111. See also, Winter v. Haldimand, 2 B. & Ad. 649. In Sansom v. Ball, 4 Dall. 459, the plaintiff insured, under the term "freight advanced,” a sum of money paid for the privilege of filling a part of the vessel. Evidence of usage was introduced to show that that term was applied to the amount paid in that manner.
2 Wolcott v. Eagle Ins. Co., 4 Pick. 429; Adams v. Warren Ins. Co., 22 Pick. 163; Taunton Copper Co. v. Merchants’ Ins. Co., 22 Pick. 108; Milward v. Hibbert, 3 Q. B. 120. In Taunton Copper Co. v. Merchants’ Ins. Co., Putnam, J., said: “The general rule unquestionably is, that a policy on goods or merchandise or property in general terms, on board a ship, does not extend to goods, property, or merchandise laden on deck.” In both of the above cases the question was very elaborately discussed, and many foreign authorities were cited and commented upon. See the following note, and Ross v. Thwaite, Park, Ins. 25 ; Backhouse v. Ripley, id. 25; Lenox v. U. S. Ins. Co., 3 Johns. Cas. 178; Allegre v. Maryland Ins. Co., 2 Gill & J. 136. And the underwriters are not liable for a neglect to specify the cargo as being on deck, although a bill of lading stating the fact was handed to the secretary of the company, before the policy was issued, but which he did not open or read. Smith v. Miss. Mar. & F. Ins. Co., 11 La. 142. In Brooks v. Oriental Ins. Co., 7 Pick. 259, 269, insurance on a vessel and her appurtenances, was held not to cover a hawser stowed in a boat upon deck, when it should have been in the hold.
known, actually or constructively to the insurer, we think it must countervail the general rule, and an insurance either on goods generally, or on freight generally, would apply to such goods in the same way as if they were carried in the hold. And it has
1 In Milward v. Hibbert, 3 Q. B. 120, the precise question raised upon demurrer was, whether, in any case whatever, the ship-owner can recover of the underwriter the value of goods loaded on deck. After very elaborate arguments by Mr. Cresswell on one side and Sir W. W. Follett on the other, and a most thorough consideration of the authorities, both English and continental, by the court, it was held, “that the mere fact of stowing goods on deck will not relieve the underwriters from responsibility, inasmuch as they may be placed there according to the usage of the trade, and so as not to impede the navigation, or in any way increase the risk.”
In Da Costa v. Edmunds, 4 Camp. 142, the court seemed to regard the question as one of concealment, and implied that if the fact that goods were to be carried on deck were communicated, the policy would cover them. Under this view the only effect of a usage would be to obviate the necessity of making any representation, and it would not strictly be applied to affect the construction of the language of the policy. There are also dicta in the case of the Taunton Copper Co. v. Merchants’ Ins. Co., 22 Pick. 108, which point in the same direction. Putnam, J., said : “And we certainly agree, that if underwriters are informed of the kind of property, and such property is usually carried on deck for its own safety, particularly, as well as for the safety of the ship and the whole concern, they are to be answerable in the same manner as if they were expressly told that the property was to be carried on the deck of the ship.” This certainly implies that a communication of the fact that the goods were to be carried on deck would bring them within the contract, although there were no express agreement to that effect in the policy. But the obvious effect of this view of the case would be to avoid the policy in toto for concealment, if the carrying of the goods on deck is not communicated, whereas, if the doctrine applied to these cases is, that general terms in a policy will not ordinarily cover goods placed deck, the policy remains valid as to goods not carried on deck, while those which are so carried are excluded from it. The latter view appears to be the one taken in Milward v. Hibbert, supra, and in the decision of Taunton Copper Co. v. Merchants’ Ins. Co., supra, and the nature of the usage required in the latter case is in conformity with that view. If the question were merely, whether the assured should have communicated the fact that the goods were to be carried on deck, it would seem to be sufficient to show a usage to carry goods in that manner frequently, for this would put the underwriters upon inquiry, and that is sufficient to discharge the assured from the obligation to make representations, and it would not be necessary to show a usage of the underwriters to pay in such cases. But if it is incumbent on the assured to show that terms, which ordinarily do not apply to goods on deck, are on the ground of usage to be applied to them in any particular case, it follows that a usage so to apply those terms must be shown. It is not enough to show that goods are sometimes or often so carried on a particular voyage, the very statement of the rule that goods so carried are to be excepted, implies that it is well known that they are so carried. Merely increasing the number of exceptions does not change the rule, but a usage must be shown to dispense with the rule. Taunton Copper Co. v. Merchants’ Ins. Co., 22 Pick. 108; Smith r. Miss. F. & M. Ins. Co., 11 La. 142. If it could be shown that the goods insured were usually carried on deck, the very fact of insuring such goods would show an agreement to dispense with the rule.
been held, where the “catchings” in a whaling voyage were insured, and it was proved that the word included blubber which was usually carried on deck, that the underwriters were liable.
So it has been held, that the rule does not apply to goods which can, with equal or greater safety to themselves and the cargo generally, be carried on deck. Taunton Copper Co. v. Merchants’ Ins. Co.; Da Costa v. Edmunds.
But the fact that there has been a usage to stow goods, not liable to injury from dampness on deck, if there is a suitable cargo in the hold, was held not to be sufficient to charge the underwriters. Taunton Copper Co. v. Merchants’ Ins. Co. Putnam, J., said: “The usage stops in limine, or at most, is only one step in the journey. The general rule of law which we have considered, supposes that goods are carried on deck. . ... The usage does not find that underwriters have, in a single instance, ever paid a loss upon goods carried on deck, unless there has been a special contract or unless from the nature of the property the underwriters were by law to be presumed to have undertaken that particular risk.” We cannot see, however, any good reason for requiring that a usage for the insurers to pay, should be required, if the usage of carry. ing certain goods on a certain voyage be established, and the insurers insured those goods for that royage with a knowledge of that usage and without objecting to it. 1 Rogers 0. Mechanics’ Ins. Co., 1 Story, 603.
OF THE RISKS WHICH ARE COVERED BY THE POLICY.
OF THE GENERAL RESPONSIBILITY OF INSURERS.
The insured is never to be indemnified against his own act; nor against loss directly caused by his own personal misconduct. And this principle has been carried so far as to discharge
1 Emerigon, ch. xii., s. 11, § 1, Meredith's Ed. 290, says: “It is then certain that the insurers never answer for damages and losses which happen directly through the act or fault of the assured himself. It would be, in fact, intolerable that the assured should be indemnified by others for a loss of which he is the author. This rule is grounded upon first principles. It is delivered in the Law cùm proponas. It is applied to the contract of insurance by the Guidon, and is repeated in all our books. Si casus evenit culpâ assecurati, non tenentur, assecuratores. It is a general rule, from which it is not permitted to derogate by a contrary agreement: Nulla pactione effici potest ne dolus praestetur. As Pothier remarks : ‘It is evident that I cannot validly agree with any one that he shall charge himself with the faults that I shall commit.'
The principle of the common law appears to be the same. See Skidmore v. Desdoity, 2 Johns. Cas. 77; Goix v. Knox, 1 Johns. Cas. 337; Chandler v. Worcester Mut. F. Ins. Co., 3 Cush. 328. But if the policy excepts loss by the design of the insured, the underwriters will be liable for loss occasioned by his negligence, unless it be so great as to amount to fraud. Catlin v. Springfield F. Ins. Co., 1 Sumner, 434. In the case of Amicable Society v. Bolland, 2 Dow & C. 1, a case of life insurance, it was held that the insurers were not liable where the assured was executed for felony. And the court said that the law would be the same if the insurance had been specifically against a felonious death. This question was much considered in the recent case of Thompson v. Hopper, 6 Ellis & B. 937, 38 Eng. L. & Eq. 39. It is settled, as we have already scen, that in England there is no implied warranty in a time policy. The vessel was sent to sea by her owners in an unseaworthy condition, they knowing the fact. Soon after sailing, it was found to be impossible to proceed owing to her condition, and she was brought up in an open roadstead, and while there by an acci