When a cargo is insured by diverse policies in some of which the
rate of exchange is fixed at which the prime cost of the cargo
shall be valued, in ascertaining the amount of the interest of the
insured upon settlement of those policies in which the rate of
exchange is fixed, the whole cargo is to be valued at that rate of
exchange without regard to the rate of exchange by which the value
may have been ascertained in the other policies.
Error to the Circuit Court for the District of Maryland in an
action upon a policy of insurance dated 18 May, 1810, on the cargo
of the brig
Elizabeth from St. Petersburgh or Cronstadt to
Philadelphia against all risks, for $6,000, "valuing
Page 12 U. S. 56
the invoice ruble at 46 cents." The invoice amounted to
95,565.71 rubles, equal, at 46 cents per ruble, to $43,960.23.
Before this policy was made, the plaintiff had effected eight
other policies in Philadelphia to the amount of $36,900. In the
first seven of these policies, there was no valuation of the ruble,
but in the eighth it was valued at 40 cents. The defendants, at the
time of executing this policy, had no knowledge of those affected
in Philadelphia.
The vessel and cargo were captured by a Danish vessel and
condemned. The plaintiff abandoned in due time.
The underwriters at Philadelphia paid. But on settlement of the
seven first policies, in which the value of the ruble was not
fixed, and which insured
429,900, the underwriters, in order to ascertain whether the
plaintiff's interest in the cargo amounted to the sum insured by
those policies,
viz.,: $29,900, insisted upon fixing the
value of the ruble at thirty-three and a third cents.
On settlement of the eighth policy, which valued the ruble at
forty cents, and which insured $7,000, the calculation (in order to
ascertain whether the plaintiff had still a sufficient interest
left to entitle him to receive the $7,000 insured by that policy)
was made by converting the whole amount of the invoice into at 40
cents per ruble, and deducting therefrom the $29,900 received upon
the seven preceding policies. By this mode of calculation, it
appears (according to the statement in the bill of exceptions,
which, however, does not seem to be accurate) that after the
plaintiff had received the $29,900 insured by the seven first
policies, and the $7,000 insured by the eighth policy, his
remaining interest to be covered by the ninth policy, was only
1,481.71 rubles, equal, at 46 cents per ruble, to $682.58.
But if, on settlement of this last policy, the plaintiff is
entitled to have the value of his interest in the cargo ascertained
by converting the whole amount of the invoice
Page 12 U. S. 57
into, at the rate of 46 cents per ruble, and deducting therefrom
the $36,900 covered by the eight prior policies, then his remaining
interest to be covered by this policy would be more than the $6,000
insured thereby.
The only question saved by the bill of exceptions at the trial
below was whether the plaintiff should recover according to the
first or according to the latter mode of calculation.
The plaintiff contended for the latter, but the court overruled
him and directed the jury that he was only entitled to recover
according to the former -- they found a verdict accordingly,
whereupon the plaintiff brought his writ of error.
JOHNSON, J. delivered the opinion of the Court as follows:
This is the case of an insurance on a voyage from St.
Petersburgh or Cronstadt to Philadelphia, effected in the year
1810. The vessel was captured and the assured abandoned. The only
difficulty arises on the principles upon which the loss shall be
adjusted.
Besides this policy, eight others were effected in Philadelphia.
In seven of them, no valuation was attached to the ruble. In the
eighth, it was valued at 40 cents, and on this, which was the ninth
in order, at 46 cents. In settling the seven first the ruble was
estimated at thirty-three and a third cents, which was the received
value at Philadelphia. On the eighth it was settled at the
stipulated value of 40 cents. The value of goods laden on board the
ship was proved to be 95,565 rubles. The sums paid on the eight
first policies corresponded to the adjusted value of 94,084 rubles,
leaving a balance of only 1,481, equal, at 46 cents, to about $682
unpaid. But if the whole amount of
Page 12 U. S. 58
the cargo be brought into at 46 cents to the ruble, and the sum
in actually paid on the other policies be deducted, there will
still remain more unpaid than would exhaust the whole sum
underwritten on the ninth policy.
On the part of the defendant it is contended that the
compensation paid to the plaintiff on the other policies is
absolute and complete as to the corresponding amount in rubles,
leaving only $1,481 unpaid. On the other hand, the plaintiff
contends that the compensation was only relative, and cannot affect
his rights as between himself and this defendant. And of this
opinion is the majority of the Court.
The object to be attained is to secure to the assured a fair
indemnity under all the advantages which he has purchased of the
insurers.
The intention of the parties in attaching a fixed value to the
ruble appears in the order for insurance, to-wit: "to distinguish
between the paper and specie ruble."
It is very well known that the ruble is the money of account in
Russia. It was originally a coin corresponding in value to the
American dollar. But by the forced circulation of a paper
representative of the ruble, dependent on nothing but mere national
faith or national force for its value, the silver ruble has
nominally doubled or trebled itself in value. The astonishing and
rapid fluctuation in its value appears from the evidence in this
case, in which it is stated that in the year 1810 it varied from
forty-eight to twenty-five cents.
To secure the assured against the effects of this fluctuation
was the object of the parties in attaching a specific value to the
ruble, and as the whole cargo would be affected in value by this
cause, and the policy was upon the cargo generally, we are of
opinion that no other principle in calculating the loss would
afford him the indemnity stipulated for in the policy.
The principle contended for by the defendant is subject to this
obvious objection that it is not reciprocal.
Page 12 U. S. 59
Had the adjustment of the value of the ruble in the other cases
exceeded forty-six cents, that adjustment would not in any respect
have resulted to his benefit.
There is one difficulty of which the Court is fully aware, which
is that the interest assigned in the abandonment if estimated in
rubles will be inversely as the rate at which the ruble is
estimated, so that he who pays most would acquire least. But in
this case the objection does not arise, as the plaintiff, by a
compromise with the underwriters on some of the other policies, has
reserved a sufficient interest in the subject of abandonment to
meet the just claims of these underwriters. And in no case would
this consideration create a difficulty as between the parties to a
policy. Among the underwriters alone in the distribution of the
proceeds of the thing abandoned would it be necessary to determine
on the correct rule to be applied in such a case.
Had the policy which is the subject of this suit been a valued
policy, and declared the value of the whole cargo to be $43,929,
the actual amount at the stipulated valuation of the ruble, the
same objection would have presented itself, but certainly would not
have availed to prevent a recovery.
The judgment below must therefore be
Reversed and the case remanded.
