Graves & Barnewall v. Boston Marine Insurance Company - 6 U.S. 419 (1805)
U.S. Supreme Court
Graves & Barnewall v. Boston Marine Insurance Company, 6 U.S. 2 Cranch 419 419 (1805)
Graves & Barnewall v. Boston Marine Insurance Company
6 U.S. (2 Cranch) 419
A policy of insurance in the name of one joint owner "as property may appear" does not cover the interest of the other owner, there being no clause in the policy stating the insurance to be for the benefit of all concerned.
The interest of a co-partnership cannot be given in evidence on an averment of individual interest, nor an averment of the interest of a company be supported by a special contract relating to the interest of an individual.
Evidence of the knowledge of the underwriters of the intention of the insured at the time of making the policy ought to be very clear to justify a court of equity in conforming the policy to the alleged intention.
It is a good general principle that written agreements ought to be expounded by themselves.
Appeal from the Circuit Court for the District of Massachusetts in which was dismissed a bill filed by the appellants seeking to charge the appellees upon a policy of insurance effected by them and to obtain relief against an alleged mistake by omitting to insert the name of Barnewall in the policy, the interest and property insured being that of Graves & Barnewall, and so intended to be insured.
Graves & Barnewall were equally and jointly interested in the ship Northern Liberties and her cargo, and they had various insurances effected in different places upon the ship and cargo from New York to Teneriffe as well as from thence to La Vera Cruz, always for their joint and equal benefit.
On 24 April, 1800, Graves wrote to Elisha Sigourney & Sons of Boston, inquiring the rate of insurance on the risk and describing himself as "one of the parties interested in the property to be insured." On receiving a reply, he wrote, 5 May, 1800:
"Your office asks too high a premium for the risk I was inquiring after; the vessel cannot be out of time as she sailed from hence for Teneriffe in February, where we have not learned that she had arrived; less so that she had sailed; but as it is my principle to run no risks where I can help it, I have prevailed upon my co-partner to anticipate her arrival and sailing again to Vera Cruz. To give you a perfect idea of the nature of the risk to be insured, you will find a copy on the other side of the application to our offices, who took a good deal at seventeen and a half percent; we may be induced to give one or two percent more to complete the business, and wish you to say whether it could not be effected with you at seventeen and a half percent or near that; if so, and we have not insured elsewhere before a return of your answer, I may likely give you an order to effect $20,000 to $25,000.420"
The copy of the application annexed to the letter stated that
"On 20 February last, the ship Northern Liberties sailed from this for Teneriffe commanded by Frederick King, a man of courage and good conduct; she mounted sixteen six-pounders, and had a crew of thirty in number. No vessel could have been more completely fitted, is copper sheathed, and by the report of the pilot who carried her out to sea, sails remarkably fast. Upon this vessel's cargo we want insurance at and from Teneriffe to La Vera Cruz. The ship and cargo really and truly belong to American citizens."
This communication was laid before the appellees, and offer was made by them to insure the property, which was communicated to Graves by Sigourney & Sons, and on 15 May, 1800, he directed the insurance to be made upon the cargo to the amount of $16,000, upon the best terms and within certain limits. Upon these orders, they made insurance with the Boston Marine Insurance Company, the appellees, in the sum of $10,000 upon the cargo of the ship, for the voyage mentioned in the letter of 5 May, 1800.
The printed forms of policies used by the appellees did not contain the ordinary clause importing the insurance to be made as well for the benefit of the persons named in the policy as for the benefit of all concerned. Of this fact Graves and Sigourney & Sons were ignorant.
The complainants alleged in their bill that the letter of Graves of 5 May, 1800, and the copy of the application were shown to the president and directors of the company as the order for the insurance, and were received and acted upon by them as the basis upon which such insurance was made and that it was well understood.
The answer of the company its by their president under the corporate seal admitted the execution of the policy and that Graves had some interest in the property insured, but it did not know to what amount -- that upon due proof of loss, it was bound and are ready to pay him the amount of loss which he had sustained. It admits that E. Sigourney, in the beginning of May, applied for insurance, but denies that either of the letters of 24 April or 5 May was shown to him or left with the president or secretary of the company or any other person for their use. It admits that the copy of the application to the New York offices was left with the president, but avers that the premium required was higher than E. Sigourney & Sons would give, and that no bargain or contract was at that time made, but the application was withdrawn. That no insurance was made by it in pursuance of the letter of 15 May or any other letter from Graves, and no further application was made until 14 June, when Andrew Sigourney applied for the insurance of $10,000 on the cargo of the ship Northern Liberties, whereupon the policy was made for and on account of John Boonen Graves and for account of no other person whatsoever. It denies that before or at the time of making and subscribing the policy, it was mentioned by the said Sigourney & Sons or either of them or known or understood or suspected by the defendant that the property
proposed to be insured was the joint property of Graves & Barnewall or of any company or co-partnership of which Graves was a member, or that it was the object and intent of the said insurance to cover the interest of the concerned therein in general, but only the separate and particular interest of Graves.
It denies all mistake or misunderstanding in inserting the name of Graves alone, but insists that his name alone was inserted, because the interest of no other person was intended to be insured.
It avers that after the policy was prepared and filled up, it was delivered to Andrew Sigourney, of the house of E. Sigourney & Sons, and by him read and approved, and that he thereupon gave his promissory note for the premium.
It denies that any alteration or omission in the form of policies had been made or adopted by the president and directors subsequent to the form first adopted and agreed upon by them after their incorporation, and avers that the form in the present case is the same which was then adopted, and which was settled by the president and directors upon mature advice and deliberation and with the express intent that the president and directors might know the nature, character, quality, and condition of every person whose interest they might insure, and to protect themselves from all responsibility and hazard on account of the interest of any person or persons not named in the policy, and that the said printed form had been openly and continually used by the company, of which all persons procuring insurance to be done at their office had notice, and that a like form had been used at the other offices in Boston for more than a year before 14 June, 1800.
Elisha Sigourney stated in evidence that about 12 May, 1800, he showed Graves' letter of 5 May to a person writing as clerk in the office of the defendants, and left it with him till the next morning, when the clerk informed him the terms on which the president and directors would insure.
That at the time of effecting the insurance, he did not know that the form adopted by that insurance company
differed from the usual form, but supposed the interest of all concerned was insured.
The deposition of Andrew Sigourney stated that on 14 June, when he made application for insurance, he showed to Mr. May, the secretary of the company, only the instructions on the back of the letter of 15 May and a memorandum to insert the words "as property may appear." That he did not read any but the written part of the policy before he took it from the office. That at the time of making the application, he did not mention the name of any person as interested in that insurance except the name of John Boonen Graves. He only showed the instructions.
That he knew by the letter of Graves that he had partners, but he did not know the name of any of them; he supposed that the policy covered the interest of all concerned, and had no notice of any variation from the customary form of policies.
The deposition of Mr. May, the secretary of the company, stated that the only paper which A. Sigourney showed him on 14 June, when he applied for insurance, was a copy of a proposal made to some other offices for insurance on the same risk, and that he did not leave it, but only showed it to the deponent. That he, the secretary, filled the policy, and understood the insurance was for Graves and for no one else, as the policy purports. That he is not sensible of any error in the filling it; that he filled it as he understood the intention of the parties in the contract. That A. Sigourney read it over deliberately before he gave the premium note, and after reading, it went away. He afterwards returned and requested the secretary to add to it the words "as property may appear," which by permission of the president were interlined.
The first policy written by the company was dated 3 April, 1799. The president and directors had made no alteration in the printed form of policies from their first commencing business until 14 June, 1800.
On 9 May, E. Sigourney & Sons, in answer to Graves' letter of the 5th, say that the gentlemen will not insure under 20 percent premium.
On 15 May, Graves requested insurance to be made
"for $21,000 on the ship valued at that sum, and $16,000 on the cargo as interest shall appear. The latter completes the sum intended to insure on the cargo. Your policy therefore being the last dated, it is understood that short interest (if any should appear) is to be settled with your underwriters."
On 3 June, E. Sigourney & Sons wrote to Graves that "$5,900 is done on your policy on the cargo. It goes on very heavily."
Graves, in answer, on 10 June, said,
"With much reluctance do I learn the little progress you have made in insuring the cargo. I hope by offering two and a half percent more you may induce the companies or solid individuals to fill up the remainder. At any rate, it will not answer my purpose to have the risk uncovered; you therefore, on receiving these presents, will please to ascertain whether there is a prospect of succeeding. If not, give me immediate notice in order to propose it elsewhere."
The material words of the policy are
"This policy of assurance witnesseth that the president and directors of the Boston Marine Insurance Company do by these presents cause John Boonen Graves to be assured, lost or not lost, $10,000 on property on board the ship Northern Liberties, as property may appear, at and from Teneriffe to Vera Cruz."
"And it is hereby agreed that if the assured shall have made any other assurance upon the property aforesaid prior in date to this policy, then the said insurance company shall be answerable only for so much as the amount of such prior assurance may be deficient towards fully covering the property at risk. And the said insurance company shall receive the premium (excepting half percent) upon so much of the sum by them assured as they shall be exonerated from by such prior assurance. And in case of any assurance upon said property subsequent in date to this policy, the said insurance company shall nevertheless be answerable to the full extent of the sum by them herein assured, without right to claim contribution from such subsequent
assurers, and shall accordingly be entitled to retain the premium by them received in the same manner as if no such subsequent assurance had been made."
It was fully proved that Graves & Barnewall were jointly and equally interested in the ship and cargo, and the representation to the New York offices stated that fact. Four other policies upon the same ship and cargo and for the same voyage were exhibited by the complainants, all of which had the usual clause,
"as well in his own name, as for and in the name and names of every other person or persons to whom the same doth, may, or shall appertain in part or in whole."
Three of them were in the name of Graves, and one in the name of Barnewall.
There was full proof of a total loss of ship and cargo.
A suit at law had been brought by Graves & Barnewall upon the present policy in which judgment was rendered against them, which judgment was affirmed in this Court at December term, 1801.