Hearne v. Marine Insurance Company
87 U.S. 488 (1874)

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U.S. Supreme Court

Hearne v. Marine Insurance Company, 87 U.S. 20 Wall. 488 488 (1874)

Hearne v. Marine Insurance Company

87 U.S. (20 Wall.) 488

Syllabus

1. Where, by the terms of a policy, a vessel is insured "to a port in Cuba, and at and thence to port of advice and discharge in Europe," and the vessel is lost in going from the port of discharge in Cuba to another port in the same island for reloading, held on a suit on the policy for a loss that evidence by the assured was inadmissible to show a usage that vessels going to Cuba might visit at two ports, one for discharge and another for loading. [In the present case, the court held that the evidence offered did not show such a usage.]

2. Where there has been a deviation in a voyage insured, no decree will be made for a return of any part of the premium. The deviation annuls the contract as to subsequent parts of the voyage and causes a forfeiture of the premium.

Hearne filed a bill in the court below against the New England Mutual Marine Insurance Company to reform a contract of insurance, he alleging that the policy as made out did not conform to the agreement of the parties, taking that agreement with the usage or custom which he insisted entered into and formed a part of it.

The case was thus:

On the 7th of May, 1866, Hearne made his application by letter to the company for insurance. He said:

"The bark Maria Henry is chartered to go from Liverpool to Cuba and load for Europe, via Falmouth for orders where to discharge. Please insure $5,000 on this charter valued at $16,000, provided you will not charge over 4 percent premium. "

Page 87 U. S. 489

On the 9th of that month, the company, through its president, replied:

"Your favor of the 7th is at hand. As requested, we have entered $5,000 on charter of bark Maria Henry, Liverpool to port in Cuba and thence to port of advice and discharge in Europe, at 4 percent."

The policy was made out on the same day and described the voyage as follows:

"At and from Liverpool to port in Cuba and at and thence to port of advice and discharge in Europe."

Thereafter, the policy was delivered to the assured and received without objection. The vessel was loaded with coal at Liverpool and proceeded thence to St. Iago de Cuba. There she discharged her outward cargo. She went thence to Manzanillo, another port in Cuba, where she took on board a cargo of native woods. On the 13th of September, 1866, she sailed thence for Europe, intending to go by Falmouth for orders. Upon the 18th of that month, on her homeward voyage, she was lost by perils of the sea. Due notice was given of the loss, and it was admitted to have occurred as alleged in the bill. The company refused to pay upon the ground that the voyage from St. Iago de Cuba to Manzanillo was a deviation from the voyage described in the policy, and therefore put an end to the liability of the insurers.

On the 7th of December, 1868, two years after the loss occurred, Hearne brought an action at law against the company. The court held that he was not entitled to recover by reason of the deviation before stated. He failed in the suit. On the 16th of January, 1871, he filed the bill in this case and prayed therein to have the contract reformed so as to cover the elongated voyage from St. Iago to Manzanillo.

The bill averred that at the time of chartering the bark and at the time of the issuing of the policy, there existed at Liverpool a general and uniform usage of trade that all vessels chartered at said port for a round voyage from said port to the Island of Cuba and thence to return to

Page 87 U. S. 490

Europe, carrying coal as their outward cargo to Cuba and bringing a return cargo thence to Europe, should visit one port in the said island for the purpose of discharging the outward cargo, and that they should then proceed to another port for the purpose of shipping a return cargo, and further that this usage was well known to all merchants and others engaged in the trade between Liverpool and Cuba.

Evidence was introduced to establish the usage. It showed that about four-fifths of the vessels which go laden with coal to Cuba take their return cargo elsewhere on the island than at the port of discharge, and that a few used the same port for both purposes. But it appeared also that the contract in both cases was expressed according to what the parties purposed.

The court below dismissed the bill, and from its action Hearne took this appeal.

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