De Wolf v. State Mutual Fire & Marine Insurance — 13 N.Y. Super. Ct. 191

Majority

p. 191

David R. De Wolf v. The State Mutual Fire and Marine Insurance Company.

Headnote

Action upon a policy on freight. The cargo was salt in sacks, and a large portion of the contents was washed out by an accident attributable to the perils of the sea. The sacks were delivered, some entirely, and others partially empty.

Seld, that upon the principles of Nelson v. Stephenson, (May Term, 1866,) the freight was lost to the ship-owners; that it was nearly an universal rule, that when freight could not be recovered from the shippers, it could be from the underwriters, in a policy.

That salt and sugar were to be deemed soluble articles within the case referred to.

(Before Oakley, Ch. J., Hoffman and Slosson, J.J.)

General Term,

October, 1856.

p. 192

The action was brought upon a policy of insurance, executed in favor of the plaintiff, by the defendants, upon freight to the amount or sum of $1,500, upon all kinds of lawful goods or merchandise laden, or to be laden, on board the good British bark Bessie, on a voyage from Liverpool, Great Britain, to Alexandria. The policy is in the usual form against “ the seas, men-of-war, etc., and all other perils, losses, and misfortunes whatever, whereby the said freight, or any part thereof, shall be lost.”

The cargo consisted of three hundred and fifty-four tons of common salt, contained in three thousand five hundred and forty sacks, which were shipped in Liverpool, at the rate of twenty-eight shillings a ton for freight, and five per cent, primage.

The vessel arrived in the Potomac, about twenty-five miles from Alexandria, her destined port, and was there so cut and damaged by the ice that she filled, and lay on her beam ends, when the water flowed in and through her, and a large part of the salt was washed out of the sacks. She was ultimately raised and taken to Alexandria. It was there found that two thousand seven hundred and ninety of the sacks were entirely empty, four hundred and thirty-two were delivered with some salt in them, and three hundred and eighteen were totally lost and destroyed, the sacks themselves not being delivered.

The sum of $226.88 was paid for the freight of the salt actually delivered, and payment refused for the rest. About thirty-two tons were delivered.

The bill of lading was dated in Liverpool, on the 30th of November, 1854, and was in the usual form.

Judgment was rendered by Justice Hoffman, at Special Term, in favor of the plaintiff for $1859.07, the amount adjusted by the parties, from which the present appeal is brought..

Young, for the plaintiff-

Moultrie, for defendants.

In the case of Nelson v. Stephenson, (May Term, 1856,^[1] ) this court examined the subject of

* Reported 5 Duer, 588 .

p. 193

the relative rights and obligations of shippers and ship-owners as to freight of liquids contained in casks, etc., which have leaked out in whole or in part. The following were the conclusions arrived at:

1st. The owner of liquids shipped in casks of any description is, in the first instance, chargeable with the duty of supplying proper casks, and would presumptively be responsible for a loss arising from their insufficiency or defects. The effect of an unqualified bill of lading is to transfer this presumptive responsibility to the captain and owner of the vessel. They acknowledge by it the good condition of the casks upon their reception on board, and engage to deliver them and their contents as described, in the same condition.

2d. That when the case presents nothing else, if the casks be delivered empty, or nearly so, and the actual cause of the leakage be unknown or conjectural, the owners of the vessel lose the freight for the portion not delivered. They have not performed their engagement. The loss, in these cases, is legally attributable to defective stowage, or some other cause over which the master had control, and for which he has engaged to be responsible.

3d. As, however, a bill of lading, treated as a receipt, is not conclusive, it is open to the ship-owner and master to prove explicitly that the casks were, in fact, unsound or badly made, and, in such a case, the original responsibility of the owner for their condition is restored, and he is bound to pay the freight.

It is an obvious conclusion, from the principles thus laid down, that when the loss of liquids - arises solely from the perils of the sea, although the casks are delivered, and it is the case of an ordinary bill of lading, the ship-owner must lose his freight. It is this point which we consider was settled in Frith v. Barker, ( 2 John. Rep. 334 ).

We consider the principles applicable to all soluble articles, such as sugar and salt. The present case is governed by them.

It was clearly a loss by perils of the sea, attributable solely to that cause, and without a fault of the shipper. The freight was not earned, and could not have been recovered.

It follows, as nearly an invariable result, that if freight cannot be recovered from the shipper or -his agent, it is to be recovered from the insurers. It is the contingency covered by the policy.

p. 194

Justice Nelson, in Hugg v. The Augusta Ins. Co., ( 7 Howard, 604 ,) thus states the rule: “ The contract of insurance upon freight is, that the goods shall arrive at the port of delivery notwithstanding the perils insured against, and that if they fail thus to arrive, and the owner is thereby unable to earn his freight, the underwriter will make it good.”

The counsel insists that the character of the goods to be taken on board was unknown, and had they been known, the risk would have been declined, or the premium increased. The answer is, that the general words of the policy cover the goods in question, and the underwriters could have controlled the nature of their risk, and amount of premium, by special clauses.

It is also urged that doubts may arise as to what are soluble articles, or where the line shall be drawn between articles delivered in specie, though deteriorated in quality, and articles entirely wasted away. The court will be competent to meet these difficulties when they arise. In the mean time nothing is more apparent than that experienced underwriters can readily frame, what the counsel says the court will have to do, a specification of articles of this description, and a tariff of the rates of premium at which they will consent to take such risks.

We consider that the plaintiff was clearly entitled to the judgment he obtained, which must, therefore, be affirmed with costs.