Marine Insurance Company of Alexandria v. Hodgson, 10 U.S. 206 (1810)

U.S. Supreme Court

Maine Insurance Company of Alexandria v. Hodgson, 10 U.S. 6 Cranch 206 206 (1810) Maine Insurance Company of Alexandria v. Hodgson

10 U.S. (6 Cranch) 206

ERROR TO THE CIRCUIT COURT OF THE DISTRICT

OF COLUMBIA FOR THE COUNTY OF ALEXANDRIA

Syllabus

In an action of covenant on a policy under seal, all special matter of defense must be pleaded. Under the plea of covenants performed, the defendant cannot give evidence which goes to vacate the policy.

After a cause is remanded to the inferior court, such court may receive additional pleas or admit amendments to those already filed, even after the appellate court has decided such pleas to be bad upon demurrer.

The refusal of an inferior court to allow a plea to be amended or a new plea to be filed or to grant a new trial or to continue a cause cannot be assigned as error.

It is a useless practice to read the proceedings in a foreign court of admiralty condemning a vessel at length. The depositions stated in such proceedings are not evidence in an action upon the policy of insurance.

In an action upon a valued policy, it is not competent for the underwriters to give parol evidence that the real value of the subject insured is different from that stated in the policy.

In order to prove the condemnation of a vessel, it is only necessary to produce the libel and sentence.

The former judgment of the court below in this cause in favor of the now plaintiff in error having been reversed in this Court, and the cause sent back for the trial of the issues of fact, see 9 U. S. 9 U.S. 100, the plaintiffs in error, before the cause could be regularly called for trial according to the rules and practice of the court, moved the court below for leave to amend the pleadings by adding to the former eight pleas, a ninth and a tenth plea, in the words following:

"9th plea. And the said defendants, by their attorney aforesaid, by leave of the court and by virtue of the statutes in such cases made and provided, for further plea in this behalf say that the said plaintiff ought not to have and maintain his action aforesaid against them because they say that the said marine insurance company (by the act of assembly of Virginia incorporating said company, which act of assembly they now bring here into court) are authorized to make rules and regulations for the conducting the business of the said corporation, and that one of their said rules and regulations requires that every order for insurance shall be made in writing and shall contain the name of the vessel and master, the place from whence and to which insurance is required to be made, with as full a description of the vessel and voyage as can be given thereof, and especially as to her age, tonnage and equipment, and that it was always and is the practice of the said insurance company to make no insurance upon the body of a ship, her tackle, apparel and furniture beyond the reasonable value thereof according to the representation and description given thereof as to her age, tonnage, and equipment, which rule and practice diminishes the risks of insurance in

Page 10 U. S. 207

regard to losses contrived, designed, effected, and concealed by the insured when they are greatly overinsured, and that the said rule and practice was, at the time of making and concluding the contract aforesaid in the declaration mentioned, well known to each of the said parties making the said contract, and that to induce them, the said defendants, to sign, seal, and deliver the aforesaid policy of insurance, thereby insuring to the value of $8,000 upon the body, tackle, apparel, and other furniture of the brigantine Hope aforesaid, he the said plaintiff, in effecting the said policy on 30 September, 1799, at the county aforesaid, stated and represented that the said brigantine, in the month of July in the year last mentioned, was a stout well built vessel of about 250 tons burden, in good order, and well found in sails, rigging, &c., built in Massachusetts, and from six to seven years old, and requested an insurance upon the said brigantine, her tackle, apparel, and furniture, rating her value at the sum of $10,000 for the voyage in the declaration mentioned at the commencement of the risks to be insured. And the plaintiff represented to the defendants on the same 30 September, 1799, at the county aforesaid, that the said brigantine, her tackle, apparel and furniture, were of the value of $10,000 at the time the risks of the voyage to be insured by the contract aforesaid would commence, and the defendants aver that in consequence of the said representation and placing full faith and credit therein, they were induced to sign, seal, and deliver and did sign, seal, and deliver the said policy of insurance on the said 30 September in the year aforesaid at the county aforesaid to the plaintiff, thereby agreeing in the said policy to fix the value of the said origantine, her tackle and apparel and other furniture at the sum of $10,000, and thereby insuring to the amount of $8,000 dollars for the voyage aforesaid upon the said brigantine, her tackle, apparel, and furniture. And the said defendants further aver that the said brigantine Hope was not, in the month of July in the year aforesaid or at any time a well built vessel of the burden of about 250 tons, and was

Page 10 U. S. 208

not from six to seven years old in the said month of July in the year aforesaid, but was much older than from six to seven years old in the said month of July in the said year -- that is to say, more than eight and a half years old, and had been ill built in the year 1790, in the Province of Maine, in Massachusetts, and thereafter was raised upon and rebuilt; that the value of the said brigantine, her tackle, apparel, and furniture was never at any time whatever equal to one-half the said sum of $8,000. And the defendants say that the difference aforesaid between the true built, age, tonnage and value of the said ship and the aforesaid represented built, age, tonnage, and value thereof was material in regard to the risks of the voyage in the said policy of insurance mentioned, and this they are ready to verify, wherefore they pray judgment, &c."

"10th plea. And the said defendants, by their attorney aforesaid, by leave of the court and of the statutes in such cases made and provided, for further plea in this behalf say that the said plaintiff ought not to have or maintain his action aforesaid against them, because they say that the said policy of insurance was had and obtained of them by means of the fraud of the said George F. Straas in the declaration mentioned, with intent to deceive and defraud the said defendants of a large sum of money -- that is to say of the difference between the just and fair value of the said brigantine, her tackle, apparel and furniture and the sum of $8,000 intended to be insured by the said policy, which difference exceeded one-half the sum last mentioned -- that is to say, exceeded $4,000, and this they are ready to verify, wherefore they pray judgment, &c."

But the court below refused to permit the pleadings to be so amended, in consequence of which the cause went to trial upon the three issues of fact which had already been joined, viz.,

1. That the defendants "have well and truly done

Page 10 U. S. 209

and performed all things they by the said policy of insurance were bound to perform."

2. That the brigantine Hope

"was not taken and seized by certain British vessels and carried into Jamaica and there libeled, condemned, and sold in manner and form as in the declaration is set forth,"

and

3. That the brigantine Hope was not, when she sailed from her last port in the Island of St. Domingo on the voyage insured, a good, sound, staunch, seaworthy ship able to perform the voyage insured.

Upon the trial of these issues the defendants offered evidence of the facts stated in the ninth and tenth pleas, which the court rejected as inapplicable to either of the issues. To which refusal the defendants excepted.

The defendants also offered in mitigation of damages evidence to prove that the vessel, at the time she sailed upon the voyage insured, was not worth one-half the sum insured, and that the high valuation in the policy was produced by an untrue and unfair representation on the part of the insured of the age, tonnage and built of the vessel, and that the misrepresentation in those respects was material to the contract of insurance, and thereupon prayed the court to instruct the jury that if they found the facts to be so, they ought not to take the valuation stated in the policy as the true value of the subject intended to be insured, but in assessing the damages of the plaintiff, they ought to take the just value of the said brig, &c., at the commencement of the risk insured, although all the issues of fact should be found for the plaintiff. Which instruction the court refused to give, having already instructed the jury, in case it should find the issues for the plaintiff, to reserve, for the decision of the court the question as to the principle upon which the damages should be estimated and assessed. To which refusal the defendants also excepted.

The plaintiff, for the purpose of proving the libel

Page 10 U. S. 210

and condemnation in the declaration mentioned, produced and read to the jury, without objection at the time on the part of the defendants, a copy of the whole record and proceedings in the Vice-admiralty Court at Jamaica, respecting which the counsel for the parties had entered into the following agreement, viz.,

"The defendants waive all exceptions to the authentication of the record of the proceedings in admiralty concerning the condemnation of the brig Hope, but save every objection to the contents of the said record excepting the matter of authentication. The plaintiff admits as evidence the affidavit of Gibson & Evans."

After the reading of which, the defendants, in order to prove that the vessel was not at the time of capture in the due course of the voyage insured, and the condition she was then in, offered to read in evidence to the jury from the said record of proceedings, a copy of the deposition of William Murray, taken in preparatorio, to be used in the said court of vice-admiralty.

But the court instructed the jury that the said deposition of the said William Murray, so taken, is not competent evidence in this cause to prove the said facts. To which instruction the defendants excepted.

The plaintiff moved the court to direct the jury that if from the evidence it finds all the issues of fact for the plaintiff, then it should find its verdict in the following form, viz.,

"We of the jury find all the issues of fact joined in this cause for the plaintiff, and do assess his damages by reason of the breach of covenant in the declaration mentioned, to the sum of _____. The amount of damages so assessed to be nevertheless subject to the opinion of the court upon the following point reserved, viz., if the value fixed in the policy, set out in the declaration be not conclusive upon the parties, and it be competent to the jury, under any of the issues of fact joined in this cause, to hear evidence concerning, and to inquire into the real value of the vessel in the said policy mentioned, so as to reduce the agreed value mentioned in the said policy, and

Page 10 U. S. 211

to estimate the plaintiff's damages according to such reduced value, as actually proved, then, and not otherwise, we assess the plaintiff's damages (in lieu of the sum above assessed) to the sum of _____."

To which direction the defendants objected and prayed the court if it gave the jury any instruction upon the subject, to direct it to find the smaller sum in damages if the court should be of opinion that it was competent for the jury to hear evidence concerning the misrepresentation as to the age, built, and tonnage of the vessel.

But the court refused to give the instruction prayed by the defendants, having before refused to suffer the defendants to give evidence of misrepresentation by the plaintiff in obtaining the policy under either of the issues of fact joined in this cause, to which refusal the defendants had taken a bill of exceptions. But the plaintiff having consented to permit the defendants to give evidence of the real value of the vessel at the time the risks insured commenced (saving the objection to the competency of any parol evidence upon any of the said issues of fact, concerning the real value of the said subject insured), the court directed the jury to find their verdict as prayed by the plaintiff.

To which refusal and instruction the defendants excepted.

The jury found a verdict in the form directed by the court, and filled the first blank with the sum of $11,452.34s, and the other with the sum of $6,441.71.

The court, after consideration, rendered judgment for the largest sum, being of opinion that the value stated in the policy was conclusive between the parties.

The defendants brought their writ of error.

Page 10 U. S. 217

LIVINGSTON, J. delivered the opinion of the Court as follows:

This is an action of covenant on a policy of insurance, to which the defendants pleaded 1. that they had performed all things which, by the policy, they were bound to perform; 2. that the vessel insured was not captured and condemned as in the declaration is mentioned; and, 3. that the vessel insured was not seaworthy, on which pleas issues we taken by the plaintiff.

There were also five special pleas, to which there were demurrers, all of which were allowed by the circuit court except the one to the sixth plea, which on a writ of error to this Court heretofore brought was allowed here, and the cause then remanded to the circuit court for further proceedings to be had therein. On the return of the cause to the circuit court, the defendants moved for leave to file two additional pleas, which motion was denied, and is now relied on as one of the errors for which the present judgment should be reversed.

This Court does not think that the refusal of an inferior court to receive an additional plea or to amend one already filed can ever be assigned as error. This depends so much on the discretion of the court below, which must be regulated more by the particular circumstances of every case, than by any precise and known rule of law, and of which the superior court

Page 10 U. S. 218

can never become fully possessed, that there would be more danger of injury in revising matters of this kind than what might result now and then from an arbitrary or improper exercise of this discretion. It may be very hard not to grant a new trial or not to continue a cause, but in neither case can the party be relieved by a writ of error; nor is the Court apprised that a refusal to amend or to add a plea was ever made the subject of complaint in this way. The Court therefore does not feel itself obliged to give any opinion on the conduct of the inferior court in refusing to receive these pleas. At the same time, it has no difficulty in saying that even in that stage of the proceedings, the circuit court might, if it had thought proper, have received these additional pleas or admitted of any amendment in those already filed.

The court below having refused to receive these pleas, the trial proceeded on the three on which issues were joined, and the defendants offered, under them or some of them, to prove that it was one of the rules of their office that every order for insurance shall contain as full a description as can be given of the age, tonnage, and equipment of the vessel, and that it was always their practice to make no insurance on a vessel beyond her reasonable value, according to the representation given of her age, tonnage, and equipment, and that such rule was known to the plaintiff, and that, to induce them to insure $8,000 on the brig Hope, the plaintiff represented her as a stout, well built vessel of about 250 tons burden, and from six to seven years old, and that she was worth $10,000; in consequence of which, they insured her for $8,000; that, on the contrary, she was not a well built vessel of 250 tons burden, and was not from six to seven years old, but was more than eight and a half years old, and had been ill built, and that this difference between her true and her represented built, age, and tonnage, was material to the risks of the voyage insured. This evidence, being objected to, was deemed inadmissible, and this Court is now called on to say whether in this opinion there was any error.

Page 10 U. S. 219

However desirable it may be to admit in evidence, on the general issue in an action of covenant on a policy of insurance, everything which may avoid the contract or lessen the damages, as is done in actions on the case, this Court does not know that it possesses the power of changing the law of pleading or to admit of evidence inconsistent with the forms which it has prescribed. No rule on this subject is more inflexible than that, in actions on deeds, all special matter of defense must be pleaded. Of this rule it is very certain, from a mere inspection of the record, that the defendants cannot allege ignorance. If everything, then, which is relied on to avoid a contract under seal must be pleaded, it will at once be conceded that none of the matter offered in evidence applied to either of the pleas. The defendants could not thus set up an excuse for not doing that which by one of the pleas they professed to have done, and as to the other pleas, which denied the capture and seaworthiness of the vessel, it will not be pretended that any of this matter supported either of them. The same remarks apply to the second and third bills of exception. Neither fraud nor misrepresentation as to the value of the vessel or her age or tonnage could be received in evidence under either of these issues, no more than infancy or coverture, on a plea of non est factum, for most certainly none of the matters here offered by the defendants the rejection of which occasioned these exceptions went in any degree to prove either of the pleas on which issue had been joined.

The fourth exception is to the refusal of the court to admit the deposition of William Murray, which appeared among the admiralty proceedings and which was offered by the defendants to prove that the vessel was not in the due course of her voyage when she was captured, and the condition she was in at the time of capture. As the defendants have not in either of their pleas relied on a deviation, it may be doubted whether any evidence of that fact were admissible; but if it were proper, for the purpose of discrediting any testimony which had been offered by the plaintiff, to show where the Hope had been taken, it is not thought that

Page 10 U. S. 220

the circuit court erred in instructing the jury that the deposition of Murray was not competent evidence to prove that fact. If all the proceedings in the admiralty had been read by the plaintiff without any previous agreement on the part of the defendants to save every objection to their contents excepting the matter of authentication, the Court will not say that the defendants might not have insisted on using any deposition, among the papers, which made in their favor; but as the plaintiff could have read them for no other purpose than to prove the libel and condemnation, and must have attempted to prove no other fact by them, for which purpose it is expressly stated that they were offered, and as the defendants had by their agreement explicitly reserved to themselves every objection to their contents, it does not appear reasonable to permit them to select a deposition as evidence for them while the plaintiff could not have made use of that or any other if ever so favorable to himself. The circuit court therefore did not err in the instruction which it gave to the jury on this subject. This Court cannot forbear remarking here that it can never be necessary, in order to prove a condemnation, to produce anything more than the libel and sentence, although it is a frequent but useless practice to read the proceedings at length.

The fifth exception is taken to a refusal of the circuit court to direct the jury to find damages for the value of the vessel, as agreed in the policy, and, conditionally, for her actual value, if, in the opinion of the court, it was competent for the jury, under any of the issues joined, to inquire into the real value of the vessel. As it had already been decided, and as this Court thinks, correctly, to receive no evidence of the real value of the vessel, there was no error in refusing to give this direction, and although the plaintiff at length consented to permit the defendants to give evidence of the real value of the vessel, saving objections to the competency of such evidence upon any of the issues of fact, and the jury, thereupon, found conditional damages, this Court is of opinion that as evidence of the real value of the vessel under any of these issues was incompetent, and as objections to its competency

Page 10 U. S. 221

were saved to the plaintiff, the circuit court did right in giving judgment for the damages found by the jury according to the value of the vessel fixed in the policy, which judgment this Court

Affirms with costs.