Opinion
March Term, 1868
John H. Reynolds, for the appellant.
Geo. B. Hibbard, for the respondent.
If the defendant, being the owner of the wheat in question, had caused himself to be insured in Rochester or in New York by a certificate of insurance, in the same form as was issued by the Resolute Insurance company, and referring for the details of the contract to a policy containing the same conditions as are found in policy No. 209, which was here referred to, I think it would hardly be claimed that the plaintiff acquired or had any interest therein, or in the moneys which, in case of loss, would become payable to the plaintiff.
It would have been a very simple case in which, up to a certain specified amount, the owner had insured his goods, and by the conditions of the policy the insured, notwithstanding the sum named in the policy, could recover no more than the value of the goods in New York, and if the loss happened before arrival, the freight, from the place of loss to the city of New York, must be deducted.
As between the owner and the insurance company, the freight between the place of loss and New York might become a material inquiry, and it might be wholly immaterial, but the amount of the freight or cost of transportation from the place of shipment to the place of loss, could never come in question between them. Transportation of the goods toward a contemplated market does, in the expectation of the parties, increase the value. But whether it does in fact increase the value, depends upon the state of that market, — the price at which the goods can be sold after their arrival.
The rights of the parties, under their contracts, do not depend on the actual price of the goods in New York, but upon the contracts themselves, and the relations thereby established.
Now, in the case just supposed, — i.e. an insurance by the defendant himself — suppose, by a rise in the market between the 15th of November (the date of shipment) and the 2d day of December (when the goods were sunk), the wheat on the last named day had been worth in New York ($1.70) one dollar and seventy cents per bushel — the defendant, under his policy, could only collect $1.46, and the case would be free from the apparent element, that the defendant had collected from the insurance company the very freight which the plaintiff claims in this action. But, as already suggested, if the defendant had himself made the insurance, it would in nowise have concerned the plaintiff that he had insured the wheat, whether he had insured it at one sum or another, or whether he had collected on such insurance more or less than its value. The plaintiff would have had no better claim than he would if the defendant had sold the wheat at $1.33 per bushel, free of freight and charges, the purchaser assuming all risk of loss or damage in the transportation. And yet, in case of loss by the way, the defendant might, even in such case, be said in a loose sense to have actually received the freight, i.e., he would have sold his wheat at New York price, which presumptively covers the cost of getting the wheat to the city.
I am not able to discover any thing in the form of the present insurance, or in the manner in which it was effected, that makes the case before us differ from the case I have thus supposed, or which warranted the submission of the question whether the insurance was for the plaintiff's benefit, to the jury.
By request of Sawyer, the agent of the defendant and shipper of the goods, Pease Trowbridge (who had engaged the wheat for transportation in the plaintiff's boat) insured the wheat in their own name, loss payable to the order of the shipper, and he indorsed the certificate of insurance to the defendant's consignees. In this there is nothing to indicate that any one was to have the benefit of the insurance, but the owner of the wheat. It was the wheat that was insured, not the freight thereon, — the consignees stood in the place of the defendant. The legal relations established by this form of making the contract, made it an insurance of the wheat to a sum named, loss payable to the owner, and gave to him or his consignees and factors for his benefit, a right to enforce the contract. I do not perceive, that, on the consummation of the arrangement, Peck, the owner, stood in any other relation to the plaintiff than he would if the policy, instead of being assigned to him had been taken in his name.
It is, however, suggested that the proof showed that the sum insured was intentionally made large enough to cover the freight. Undoubtedly it was made $8,000 instead of $7,000, with an expectation that it would cover the whole value of the wheat to the owner, including freight and charges, and the amount was fixed by the shipper (not by the plaintiff nor his agents) for that purpose. But this does not show that it was intended as an insurance for the plaintiff's benefit. It no more tends to show that, than the fact that the defendant, had he procured the insurance in New York in his own name, fixed an amount which he supposed would cover his whole risk in value, charges and freight. And so, also, in the present case, as before, the policy fixing the value in New York as the utmost which could be recovered, the question, whether, in truth, freight and charges were covered or not, would depend on the market price there on the day of loss. And, on the other hand, as the sum insured was the limit of the indemnity which the defendant could recover, if the price in New York should advance largely, the recovery by the defendant might not be equal to the value of the goods, irrespective of freight.
That the fact that Sawyer, the defendant's agent, desired the sum insured should be advanced to the sum of $8,000, so as to cover the freight, in nowise tends to establish any interest of the plaintiff in the insurance money, is further apparent from the certificate of insurance in its specification of the sum insured. Thus, the insurance was to the amount of $5,500 from Buffalo to New York, and an additional $2,500 from Troy to New York. That is to say, the insurance company would be liable to the amount of $5,500, if the wheat was lost between Buffalo and Troy, and to the amount of $8,000, if lost between Troy and New York. Now, suppose the wheat had been lost before it reached Troy? The utmost the defendant could recover on the insurance would be $5,500. And yet the value of the wheat in New York, the place where, by the policy, the value was to be ascertained, was $7,714, and with the deduction of the freight to New York, $6,438. In such case, the defendant would recover $5,500, and submit to the loss of the difference. Where, in such case, would be the argument that the defendant has collected the freight by virtue of the policy?
I deem it clear, that, upon the face of the papers and as matter of law, the plaintiff has no interest in the policy and no concern therewith. True, the plaintiff testified, that, about the 1st December (the loss having happened on the 2d), he paid the premium of insurance. Doubtless, if it had not been paid, the insurance company, having given credit therefor from the 15th of November, would have deducted it from their payment of the loss. But the payment by the plaintiff cannot alter the legal effect of the policy. It may entitle him to be repaid that amount. A carrier insuring the goods intrusted to him for carriage may be entitled to add insurance to his freight; but, in order to do this, he must show some request or some usage, or some sanction by way of affirmance; and it is doubtless true, in this case, that Pease Trowbridge, who, at the request of Sawyer (defendant's agent), effected the insurance, would have a just claim for the premium paid. And, although I do not perceive any connection between the certificate of insurance and policy No. 209, except that, for brevity, that policy was, in respect of form, referred to for an expansion of the certificate, and as an exposition of the responsibilities assumed by the company, and of the conditions of that responsibility, still, as the plaintiff paid the premium which Pease Trowbridge, while acting as his agents in procuring freight for his boat, became liable for, and as that payment inured to the defendant's benefit, I think he was entitled to be re-imbursed by the defendant.
This discussion shows, as I think, that the insurance, and the amount recovered upon the insurance, is no guide to the determination of the rights of these parties. It is a perfectly well settled and familiar rule, that freight is not covered by insurance, except when it is insured eo nomine. And yet, it is entirely competent for the owner of goods to insure them, and agree with the insurer (as was done in this case), that the value at the place of destination shall govern the recovery (within the limits of the sum insured). Whenever the value at the place of destination is so agreed to, it does, in a sense, include the freight, that is to say, it includes whatever additional value the transportation has given to the goods, if any it be. But it does not insure the freight, either in form or in fact. Cases might be supposed, in which such an insurance — the value at the place of destination being the measure of recovery — would not yield even so much as the freight.
On this branch of the subject, the conclusion is, I think, inevitable. The question between the plaintiff and the defendant is, not whether the defendant has collected his insurance, but has the plaintiff earned his freight? or has he earned freight pro rata itineris? For, if he has, then, and in either case, the amount which he has recovered by the verdict is not greater than is earned.
By the contract, the plaintiff was to carry the wheat to New York, and freight would not be payable, according to the contract, if the wheat was not transported. An actual destruction of the wheat on the journey would deprive the plaintiff of the opportunity to earn freight wherever such destruction happened, and although within sight of the city, and notwithstanding such destruction was by act of God, and without any fault of the plaintiff.
Nevertheless, the wheat in its entire passage was subject to the actual control of the owner. He could take the wheat from the carrier's possession, if he saw fit, at any point on the journey, whether it had been injured or not. But he could not thereby deprive the carrier of his full freight. Having accepted the goods, and begun the performance of his contract, the carrier was entitled to earn his freight, and if the owner chose to take the goods from him at any point, he could do so, but he must pay, in that case, full freight to New York.
Out of these two propositions spring the duty of the carrier in case of accident endangering the transportation, on the one hand, and the duty of the owner to pay freight pro rata, on the other.
When the plaintiff's boat was sunk in the basin at Albany, he was not absolved from his contract: it remained, as it was before, his duty to provide means of transportation, if they could be had, and, using reasonable care for the preservation of the damaged property, bring it to New York, and deliver it according to the bills of lading; and, if he neglected to do this (unless absolved by the act of the defendant, or some one acting on his behalf, or unless the expense would have exceeded the whole freight from Buffalo to New York), he could not recover freight. In such a condition of things, it would be absurd to inquire, whether the defendant had insured the property.
On the other hand, if the defendant, against the will of the plaintiff, took possession of the wheat, and deprived him of the opportunity to earn freight, then the defendant would be liable for the freight, which the plaintiff was entitled to earn, and which he could and would have earned, but for the defendant's interference.
And, intermediate these extremes, if the defendant voluntarily accepted the wheat at Albany, in relief of the plaintiff, and with his assent, then the plaintiff was justly and legally entitled to recover for the service already performed, if the damage to the goods was from no fault or negligence on his part, or on the part of his agents. Although that question of negligence was in issue by the pleadings, no question on that subject appears to have been raised on the trial, and no proof was given of the extent of the damage, nor whether it could be made a counter claim, if it arose from the plaintiff's fault. The theory upon which the case was tried probably made these questions appear immaterial.
Was there, then, an acceptance of the wheat at Albany, with the plaintiff's assent, which relieved the latter from the duty of bringing on the goods, and made it the duty of the defendant to pay for the service already rendered?
I think the jury have, in substance, found the facts which compel an affirmative answer to that question.
The defendant accepted a policy which authorized the agents of the insurance company, in case of damage to the goods, to intervene "in the care and saving of the property."
He had himself forwarded the certificate of insurance to his consignees, L. Roberts Co., indorsed to them. That act per se authorized them to deal with the insurance company, and collect the insurance. Payment of the value of the property in full by the company, as for a total loss to the plaintiff, operated, on well settled principles, to vest in the company the spes recuperandi, and whatever could be saved; and so amounted to an affirmance of the possession of the wheat taken by the insurance company for its care and preservation.
It is not necessary to call this a technical abandonment, under the law of insurance. The owner had not, under the policy, a right to insist on abandoning. But this would not prevent, and did not prevent, the parties consenting to treat the case as one of total loss, the company having taken actual possession of the property saved. And, if they so agreed, and the defendant accepted such payment, he consented to the actual and practical abandonment of the damaged wheat to the company, and to their acts in relation thereto.
In this view, it is clear, that there was evidence warranting the jury in finding a voluntary acceptance of the wheat at Albany, ratified by the defendant. The plaintiff offered to bring the damaged wheat to New York; and, if he had insisted upon doing so, I do not perceive that his claim to full freight to New York could be defeated, unless it was shown, that the wheat was damaged by the way, and he failed to show himself without fault therein. But, although he offered to bring the wheat to New York, yet, according to his own testimony, he yielded to the opinion of the insurance agent, and gave up the possession.
I think this, being in fact acted upon, and affirmed by the defendant, completed the right of the plaintiff to have freight to Albany, unless such right could be overcome by a counter claim, that the damage to the wheat was caused by his fault, and exceeded the pro rata freight.
For these reasons, I think the judgment may be affirmed, notwithstanding what I regard as an erroneous view of the relative rights of the parties governed the trial.
CLERKE, GROVER, MASON and DWIGHT, JJ., affirm, in accordance with the opinion of Judge WOODRUFF.
Judgment affirmed.