Equitable Insurance Company v. Hearne - 87 U.S. 494 (1874)
U.S. Supreme Court
Equitable Insurance Company v. Hearne, 87 U.S. 20 Wall. 494 494 (1874)
Equitable Insurance Company v. Hearne
87 U.S. (20 Wall.) 494
Where a party proposed to insurers to insure his vessel on a "voyage from Liverpool to Cuba and to Europe via Falmouth" at a rate named, and the company offered to insure at a somewhat higher rate, saying, "It is worth something, you know, to cover the risk at the port of loading in Cuba," held that it was implied that "the port of loading" might be different from the port of discharge, and where the assured accepted this offer, and told the insurer to insure "at and from Liverpool to Cuba and to Europe via a market port," &c., held further that a policy which insured "to port of discharge in Cuba, and to Europe via a market port," &c., did not conform to the contract, and was to be reformed so as to do so.
The controversy in this case grew out of a contract of insurance upon the same charter party as in the preceding case, though here the insurance was by a different company from the insurance there. The present case was thus:
On the 2d of May, 1866, Hearne addressed a letter to the Equitable Insurance Company as follows:
"Insure $4,000 on the charter party of the bark Maria Henry, valued at $16,000, if you will not charge me more than 3 percent; voyage from Liverpool to Cuba, and to Europe via Falmouth, for orders where to discharge. She will take her registered tonnage of coal."
On the 4th of the same month, the company replied:
"We cannot write the charter of the bark Maria Henry at your rate, viz., 3 percent, including coals, from Liverpool to
Cuba. Our rate will be 4 percent for the voyage, to include coals."
On the 7th of the month Hearne answered, arguing against the rate proposed, and offered "3 percent, or 4 percent, 1 1/2 percent to be returned if no loss."
On the day following the company responded:
"We will write upon the charter of the bark Maria Henry as proposed by you -- Europe to Cuba and back to Europe -- at 3 1/2 percent net. It is worth something, you know, to cover the risk at the port of loading in Cuba."
On the next day, Hearne wrote:
"I accept your proposition in reference to the insurance of the bark Maria Henry. Please insure $4000, at 3 1/2 percent, on the charter valued at $16,000, at and from Liverpool to Cuba, and to Europe via a market port, for orders where to discharge."
The contract, as expressed in the policy, was for
"Four thousand dollars on charter of bark Maria Henry, at and from Liverpool to port of discharge in Cuba, and at and thence to port of advice and discharge in Europe."
The facts of the case were the same in all respects, down to the close of the litigation at law between the parties, inclusive, as those in the case immediately preceding, where the controversy was with the other company. That case is referred to for the particulars. Hearne having been defeated in his action at law, filed this bill for the reformation of the contract, as stated in the policy. The circuit court decreed in his favor. The company brought the case here for review.