Patapsco Insurance Company v. Coulter - 28 U.S. 222 (1830)
U.S. Supreme Court
Patapsco Insurance Company v. Coulter, 28 U.S. 3 Pet. 222 222 (1830)
Patapsco Insurance Company v. Coulter
28 U.S. (3 Pet.) 222
Insurance on profits on board the ship Mary,
"at and from Philadelphia to Gibraltar and a port in the Mediterranean not higher up than Marseilles, and from thence to Sonsonate in Guatemala, Pacific Ocean, with liberty of Guayaquil, the insurance to begin from the loading of the goods at Philadelphia, and to continue until the goods were safely landed at the said ports. The insurance, $5,000, declared to be on profits, warranted to be American property, to be proved at Philadelphia only, valued at $20,000."
The vessel proceeded with a cargo of flour to Gibraltar, where the same was to be sold and the proceeds invested at Marseilles in dry goods, to be sent from thence to Sonsonate or Guayaquil. While the vessel lay at Gibraltar, before the discharge of her cargo, she and her cargo were totally lost by fire. The evidence on the trial went to show that with proper diligence on the part of the captain and crew the fire might have been extinguished and the vessel and cargo saved. Soon after the fire commenced, the captain called upon the crew to leave the ship under an apprehension from a small quantity of gunpowder on board, and after they left her she was boarded by other persons, who endeavored without success to extinguish the flames, having, as was alleged, arrived too late. Evidence was given intended to show that the fire originated from the carelessness of the captain. The circuit court refused to instruct the jury that if the fire proceeded from the carelessness or negligence of the captain, the insured could not recover. That court also refused to instruct the jury that if the fire originated from accident or without any want of due care on the part of the master and crew, and if the jury should find that by reasonable and proper exertions the vessel and cargo might have been preserved by them, which they omitted, the assured could not recover. That court also refused to instruct the jury that, the assured having offered no evidence that the sales of the flour at Gibraltar would have yielded a profit, it was not entitled to recover. Held that there was no error in these instructions.
What is barratry. Its definition.
The British courts have adopted the safe and legal rule in deciding that where the policy covers the risk of barratry, and fire is the proximate cause of the loss, they will not sustain the defense that negligence was the remote cause, and hold the assurers liable for the loss.
The rule that a loss the proximate cause of which is a peril insured against is a loss within the policy, although the remote cause may be negligence of the master or mariners, has been affirmed in several successive cases in the English courts.
It seems difficult to perceive, if profit be a mere excrescence of the principal, as some judges have said, or identified with it, as has been said by others, why the loss of the cargo should not carry with it the loss of the profits. Proof that profits would have arisen on the voyage in order to recover on a policy on profits is not required if the cargo has been lost.
This action was instituted in the circuit court on a policy of insurance executed by the plaintiffs in error on profits upon goods on board the ship Nancy
"at and from Philadelphia to Gibraltar and a port in the Mediterranean, not higher up than Marseilles, and at and from thence to Sonsonate, in the province of Guatemala, Pacific ocean, with the liberty of Guayaquil, beginning the adventure upon the said goods from the loading thereof on board the said vessel at Philadelphia and continuing the same until the said goods shall be safely landed at the ports aforesaid."
The insurance was in the amount of $5,000, with this clause: "this insurance is declared to be on profits, warranted to be American property, to be proved at Philadelphia only, valued at $20,000."
The vessel, with a cargo of flour, proceeded from Philadelphia to Gibraltar, at which place the cargo was destined to be sold and the proceeds to be invested at Marseilles in the purchase of various specified dry goods. These dry goods were to be sent by the vessel from Marseilles to Sonsonate or Guayaquil. While the vessel lay at Gibraltar, before the discharge of her cargo, she and her cargo were totally lost by fire. Evidence was taken at Philadelphia as to the circumstances of the destruction of the property, and one witness (Mr. Fulford) was examined in addition as to those circumstances at the trial. The testimony of this witness went to show that with proper diligence on the part of the captain and crew, the fire might have been extinguished and the vessel and cargo saved, and the evidence obtained at Philadelphia was not inconsistent with that conclusion. It appeared from Mr. Fulford's testimony that soon after the fire commenced, the captain called upon the crew to leave the ship, exclaiming that there was gunpowder aboard and that the vessel would be blown up, and the captain and crew did then leave the vessel. It was in evidence that there was a small quantity of gunpowder on board, but that that ought not to have deterred exertions to save the property; an officer and a number of men from two British frigates having
in fact, a considerable time after the vessel was deserted by her captain and crew, boarded her and used all efforts to put out the flames, but unsuccessfully in consequence of their reaching the scene so late. There was evidence to infer that the fire originated from the carelessness of the captain with a candle used by him for sealing letters, or from negligence of the crew.
Evidence was had at Philadelphia of Mr. Clark concerning the markets at Sonsonate and Guayaquil for the specified articles at Marseilles. His testimony tended to show that these articles would have been sold with profit at Guayaquil at the time the vessel might have reached there. It was proved that at Gibraltar the flour would have sold without loss, but without profit.
The defendants prayed the court to direct the jury
1. That if it should believe from the evidence that the fire which occasioned the destruction of the ship and her cargo proceeded from the carelessness or negligence of the captain of the ship or any of her crew, the plaintiff was not entitled to recover.
2. That if it should believe that the fire which occasioned the ship's destruction originated from accident and without any want of due care and attention on the part of the captain or crew, and if it should further find that the captain and crew, after the discovery of the fire, might by reasonable and proper exertions have prevented the spreading of the same and have preserved the said vessel and cargo from destruction, and that they omitted to use said exertions, then the plaintiff was not entitled to recover.
3. That the plaintiffs had offered no evidence that the sales of the flour at Gibraltar would have yielded the plaintiff a profit, and that therefore they were not entitled to recover.
These prayers the court refused, but as to the second of them directed the jury as follows:
"That the plaintiff is entitled to recover unless it should be of opinion from the evidence in the cause that after the vessel was discovered to be on fire, the master and crew might have extinguished
the same and preserved the vessel and cargo. The master was bound to extinguish the fire if practicable. If he stood aloof, without making any exertion to extinguish the fire, and suffered the vessel to be destroyed, it would have afforded evidence of such gross negligence as to amount to barratry."
To the refusal of the prayers, and opinion and direction of the court, the defendants, now plaintiffs in error, excepted.