Insurance. The steamboat
Lioness was insured on her
voyages on the western waters, particularly from New Orleans to
Natchitoches on Red River and elsewhere, "the Missouri and Upper
Mississippi excepted," for twelve months. One of the perils insured
against was "fire." The vessel was lost by the explosion of
gunpowder.
"On the trial of the cause, the judges of the Circuit Court of
Kentucky was divided in opinion on the following questions, which
were certified to this Court:"
"1. Does the policy cover the loss of the boat by a fire, caused
by"
the barratry of the master?
"2. Does the policy cover a loss of the boat by fire, caused by
the negligence, carelessness, or unskillfulness of the master and
crew of the boat, or any of them?"
"3. Is the allegation of the defendants in these pleas, or any
of them, to the effect that the fire by which the boat was lost,
was caused by the carelessness or unskillful conduct of the master
and crew, a defense to this action?"
"4. Are the pleas of the defendant, or either of them,
sufficient?"
A loss by fire, when the fire was directly and immediately
caused by the barratry of the master and crew as the efficient
agents when the fire was communicated and occasioned by the direct
act and agency of the master and crew, intentionally done from a
barratrous purpose, is not a loss within the policy if barratry is
not insured against.
If the master or crew should barratrously bore holes in the
bottom of a vessel, and she should thereby be filled with water and
sink, the loss would probably be deemed a loss by barratry, and not
by a peril of the seas or of rivers, though the water should
cooperate in producing the sinking.
The doctrine as applied to policies against fire on land has for
a great length of time prevailed that losses occasioned by the mere
fault or negligence of the assured or his servants, unaffected by
fraud or design, are within the protection of the policy, and as
such are recoverable from the underwriters. This doctrine is fully
established in England and America.
It is a well established principle of the common law that in all
cases of loss, we are to attribute it to the proximate cause, and
not to the remote cause. This has become a maxim to govern cases
arising under policies of insurance.
In the case of
Columbia Insurance Company v.
Lawrence, 10 Pet. 507, this Court thought that in
marine policies, whether containing the risk of barratry or not, a
loss whose proximate cause was a peril insured against is within
the protection of the policy, notwithstanding it might have been
occasioned remotely by the negligence of the master and mariners.
The Court has seen no reason to change that opinion.
As the explosion on board the
Lioness was caused by
fire, the fire was the proximate cause of the loss.
If taking gunpowder on board a vessel insured against fire was
not justified by the usage of the trade, and therefore was not
contemplated as a risk by the policy, there might be great reason
to contend that if it increased the risk, the loss was not covered
by the policy.
Page 36 U. S. 214
The plaintiff, a citizen of the State of Louisiana, on the 12th
day of September, 1832, caused insurance to be made by the
Merchants' Louisville Insurance Company at the City of Louisville,
in the State of Kentucky, in the sum of $6,000, on the steamboat
Lioness, her engine, &c., to navigate the western
waters usually navigated by steamboats &c, the assured having
the privilege of placing competent masters in command at any time,
the insurance to continue for twelve months, until 12 September
1833. The perils insured against were those
"of rivers, fire, enemies, pirates, assailing thieves, and all
other losses and misfortunes which shall come to the hurt or
detriment of the steamboat, her engine, tackle and furniture,
according to the true intent and meaning of the policy."
An action was instituted in the circuit court on this policy by
William Waters, the assured, to November term 1836, and the
plaintiff averred in the declaration an interest in the steamboat
Lioness at the time of the insurance and up to her loss of
$16,000; that the said steamboat
Lioness, her engine,
tackle and furniture, after the execution of said policy and before
its termination, to-wit, on 19 May, 1833, on Red River about one
mile below the mouth of Bon Dieu River whilst she was on her voyage
from New Orleans to Natchitoches, Louisiana, on Red River were, by
the adventures and perils of fire and the river, exploded, sunk to
the bottom of Red River aforesaid, and utterly destroyed, so as to
cause and make it a total loss. And the plaintiff averred that said
steamboat
Lioness was, at the time of the explosion,
sinking and destruction aforesaid, by the perils aforesaid,
sufficiently found in tackle and appurtenances thereto, and
completely provided with master, officers and crew, and in good
order and condition, and perfectly seaworthy. The declaration also
averred that a regular protest of the manner in which the loss of
vessel took place was made, and the same, with proof of the
plaintiff's interest, were delivered to the defendants. To this
declaration, the defendants filed the following pleas:
1. That the officers and crew of the
Lioness, and the
time of her explosion and sinking, so negligently and carelessly
conducted themselves in managing and attending to the safety of the
cargo on board, that
Page 36 U. S. 215
the steamboat was, by means of fire negligently and carelessly
communicated to gunpowder in the hold by the officers and crew,
blown up and destroyed.
2. That the
Lioness was loaded in part with gunpowder,
and that the officers and crew, or some of them, carelessly and
negligently carried a lighted candle or lamp into the hold, where
the powder was stored, and negligently handled the candle or lamp
at the time that the powder was exploded, and thereby produced the
explosion and destruction of the said steamer.
3. That the
Lioness was in part loaded with gunpowder,
and the same was so unskillfully, negligently and carelessly stowed
away in the boat by the officers and crew, or some of them, that
the gunpowder took fire by reason of the said unskillfulness,
negligence, and carelessness, and the boat was consequently lost
and destroyed by explosion.
4. That the
Lioness received and had on board a
quantity of gunpowder at the time of the explosion, which increased
the risk of the insurers, contrary to the true intent and meaning
of the policy, by which the insurers were discharged from the
obligations of the policy.
5. That the loss of the
Lioness was caused by the
officers and crew, or some of them, carelessly and negligently
carrying a lighted candle or lamp into the hold; and so negligently
or carelessly carrying the same, as the explosion of the vessel was
thereby produced.
6. That the loss of the boat was caused by the conduct of the
officers, managers and crew of the boat in taking and receiving on
board large quantities of gunpowder and by carelessly keeping the
same, in consequence of which the gunpowder became ignited while on
board the boat, and by its explosion caused her loss and
destruction. To these pleas the plaintiff demurred, and the
defendants joined in demurrer.
On the argument of the cause, the following questions and points
occurred upon which the judges of the circuit court were divided in
opinion, and the same, at the request of the defendants, were
stated and ordered to be certified to this Court.
1st. Does the policy cover a loss of the boat by a fire, caused
by the barratry of the master and crew?
2d. Does the policy of insurance cover a loss of the boat by
fire
Page 36 U. S. 216
caused by the negligence, carelessness or unskillfulness of the
master and crew of the boat, or any of them?
3d. Is the allegation of the defendants, in their pleas, or
either of them, to the effect that the fire by which the boat was
lost was caused by the carelessness or the neglect or unskillful
conduct of the master and crew of the boat, a defense to this
action?
4th. Are the said pleas, or either of them, sufficient?
Page 36 U. S. 218
MR. JUSTICE STORY delivered the opinion of the Court.
This is a case certified to us from the Circuit Court for the
District of Kentucky upon certain questions upon which the judges
of that court were opposed in opinion.
The action was brought by Waters, the plaintiff, on a policy of
insurance underwritten by the Merchants' Louisville Insurance
Company whereby they insured and caused to be insured, the
plaintiff,
"lost or not lost, in the sum of $6,000, on the steamboat
Lioness, engine, tackle and furniture, to navigate the
western waters usually navigated by steamboats, particularly from
New Orleans to Natchitoches, on Red River or elsewhere, the
Missouri and Upper Mississippi excepted (Captain Waters having the
privilege of placing competent masters in command at any time,
$6,000 being insured at New Albany, Indiana), whereof William
Waters is at present master, beginning the adventure upon the said
steamboat, from the 12 September, 1832, at twelve o'clock meridian,
and to continue and endure until 12 September 1833, at twelve
o'clock, meridian (twelve months)."
The policy further
Page 36 U. S. 219
provided, that
"It shall be lawful for the said steamboat, during said time, to
proceed to, touch and stay at any point or points, place or places,
if thereunto obliged by stress of weather or other unavoidable
accidents, also at the usual landings, for wood and refreshments,
and for discharging freight and passengers, without prejudice to
this insurance. Touching the adventures and perils which the
aforesaid insurance company is contended to bear, they are of the
rivers, fire, enemies, pirates, assailing thieves, and all other
losses and misfortunes, which shall come to the hurt, detriment, or
damage of the said steamboat, engine, tackle and furniture,
according to the true intent and meaning of this policy."
The premium was nine percent. The declaration avers a total
loss, and that the said steamboat and appurtenances insured "were,
by the adventures and perils of fire and the river, exploded, sunk
to the bottom of Red River aforesaid, and utterly destroyed."
The defendants pleaded six several pleas, to which a demurrer
was put in by the plaintiff, and on the consideration of the
demurrer, the following questions and points occurred:
1. Does the policy cover a loss of the boat by a fire, caused by
the barratry of the master and crew?
2. Does the policy cover a loss of the boat by fire, caused by
the negligence, carelessness or unskillfulness of the master and
crew of the boat, or any of them?
3. Is the allegation of the defendants in their pleas, or either
of them, to the effect that the fire by which the boat was lost was
caused by the carelessness or the neglect or unskillful conduct of
the master and crew a defense to this action?
4. Are the said pleas, or either of them, sufficient?
These question constituted the points on which the division of
the judges took place in the court below, and they are those upon
which we are now called to deliver our opinion, upon the argument
had at the bar.
As we understand the first question, it assumes that the fire
was directly and immediately caused by the barratry of the master
and crew as the efficient agents -- or in the other words that the
fire was communicated and occasioned by the direct act and agency
of the master and crew, intentionally done from a barratrous
purpose. In this view of it, we have no hesitation to say that a
loss by fire caused by the barratry of the master or crew is not a
loss within the policy. Such a loss is properly a loss attributable
to the barratry, as its
Page 36 U. S. 220
proximate cause, as it concurs as the efficient agent, with the
element,
eo instanti, when the injury is produced. If the
master or crew should barratrously bore holes in the bottom of the
vessel, and the latter should thereby be filled with water and
sink, the loss would properly be deemed a loss by barratry, and not
by a period of the seas or of rivers, though the flow of the water
should cooperate in producing the sinking.
The second question raises a different point -- whether a loss
by fire, remotely caused by the negligence, carelessness, or
unskillfulness of the master and crew of the vessel, is a loss
within the true intent and meaning of the policy. By unskillfulness
as here stated we do not understand in this instance a general
unskillfulness, such as would be a breach of the implied warranty
of competent skill to navigate and conduct the vessel, but only
unskillfulness in the particular circumstances, remotely connected
with the loss. In this sense it is equivalent to negligence or
carelessness in the execution of duty, and not to incapacity.
This question has undergone many discussions in the courts of
England and America, and has given rise to opposing judgments in
the two countries. As applied to policies against fire on land, the
doctrine has, for a great length of time, prevailed that losses
occasioned by the mere fault or negligence of the assured or his
servants, unaffected by fraud or design, are within the protection
of the policies, and as such recoverable from the underwriters. It
is not certain upon what precise grounds this doctrine was
originally settled. It may have been from the rules of
interpretation applied to such policies, containing special
exceptions, and not excepting this, or it may have been, and more
probably was, founded upon a more general ground that as the terms
of the policy covered risks by fire generally, no exception ought
to be introduced by construction except that of fraud of the
assured, which, upon the principles of public policy and morals,
was always to be implied. It is probable, too, that the
consideration had great weight, that otherwise such policies would
practically be of little importance, since, comparatively speaking,
few losses of this sort would occur which could not be traced back
to some carelessness, neglect, or inattention of the members of the
family.
Be the origin of it, however, what it may, the doctrine is now
firmly established both in England and America. We had occasion to
consider and decide the point at the last term in the case of
Page 36 U. S. 221
Columbia Insurance Company
of Alexandria v. Lawrence, 10 Pet. 517-518, which
was a policy against the risk of fire on land. The argument
addressed to us on that occasion endeavored to establish the
proposition that there was no real distinction between policies
against fire on land and at sea, and that in each case the same
risks were included, and that as the risk of loss by fire
occasioned by negligence was not included in a marine policy unless
that of barratry was also contained in the same policy, it followed
that as the latter risk was not taken on a land policy, no recovery
could be had. In reply to that argument, the court made the
comments which have been alluded to at the bar, and the correctness
of which it becomes now necessary to decide.
It is certainly somewhat remarkable that the question now before
us should never have been directly presented in the American or
English courts,
viz., whether in a marine policy (as this
may well enough be called), where the risk of fire is taken and the
risk of barratry is not (as is the predicament of the present
case), a loss by fire, remotely caused by negligence is a loss
within the policy. But it is scarcely a matter of less surprise,
considering the great length of time during which policies against
both risks have been in constant use among merchants, that the
question of a loss by negligence, in a policy against both risks,
should not have arisen in either country, until a comparatively
recent period.
If we look to the question upon mere principle, without
reference to authority, it is difficult to escape from the
conclusion that a loss by a peril insured against and occasioned by
negligence is a loss within a marine policy, unless there be some
other language in it which repels that conclusion. Such a loss is
within the words, and it is incumbent upon those who seek to make
any exception from the words to show that it is not within the
intent of the policy. There is nothing unreasonable, unjust, or
inconsistent with public policy in allowing the assured to insure
himself against all losses from any perils not occasioned by his
own personal fraud. It was well observed by Mr. Justice Bayley, in
delivering the opinion of the court in
Busk v. Royal Exchange
Assurance Company, 2 Barn. & Ald. 79, after referring to
the general risks in the policy, that
"the object of the assured, certainly, was to protect himself
against all the risks incident to a marine adventure. The
underwriter being therefore liable,
prima facie, by the
express terms of the policy, it lies upon him to discharge himself.
Does he do so by showing that the
Page 36 U. S. 222
fire arose from the negligence of the master and mariners? . . .
If indeed the negligence of the master would exonerate the
underwriter from responsibility, in case of a loss by fire, it
would also in cases of a loss by capture or perils of the sea. And
it would therefore constitute a good defense in an action upon a
policy to show, that the captain had misconducted himself in the
navigation of the ship, or that he had not resisted an enemy to the
utmost of his power."
There is great force in this reasoning, and the practical
inconvenience of carving out such an implied exception from the
general peril in the policy furnishes a strong ground against it,
and it is to be remembered that the exception is to be created by
construction of the court, and is not found in the terms of the
policy. The reasons of public policy and the presumption of
intention in the parties to make such an exception ought to be very
clear and unequivocal to justify the court in such a course. So far
from any such policy or presumption being clear and unequivocal, it
may be affirmed that they lean the other way. The practical
inconvenience of creating such an exception would be very great.
Lord Tenterden alluded to it in
Walker v. Maitland, 5
Barn. & Ald. 174.
"No decision [said he] can be cited where in such a case [the
loss by a peril of the sea] the underwriters have been held to be
excused in consequence of the loss' having been remotely occasioned
by the negligence of the crew. I am afraid of laying down any such
rule. It will introduce an infinite number of questions as to the
quantum of care which, if used, might have prevented the loss.
Suppose, for instance, the master were to send a man to the
masthead to look out, and he falls asleep, in consequence of which
the vessel runs upon a rock, or is taken by the enemy; in that case
it might be argued, as here, that the loss was imputable to the
negligence of one of the crew and that the underwriters are not
liable. These and a variety of other such questions would be
introduced in case our opinion were in favor of the
underwriters."
His Lordship might have stated the argument from inconvenience,
even in a more general form. If negligence of the master or crew
were, under such circumstances, a good defense, it would be
perfectly competent and proper to examine on the trial any single
transaction of the whole voyage and every incident of the
navigation of the whole voyage, whether there was due diligence in
all respects in hoisting or taken in sail, in steering the course,
in trimming the ship, in selecting the route, in stopping in port,
in hastening or retarding the operations of the
Page 36 U. S. 223
voyage, for all these might be remotely connected with the loss.
If there had been more diligence or less negligence, the peril
might have been avoided or escaped, or never encountered at all.
Under such circumstances, the chance of a recovery upon a policy
for any loss from any peril insured against would of itself be a
risk of no inconsiderable hazard.
This is not all. We must interpret this instrument according to
the known principles of the common law. It is a well established
principle of that law that in all cases of loss, we are to
attribute it to the proximate cause, and not to any remote cause;
causa proxima non remota spectatur; and this has become a
maxim not only to govern other cases, but (as will be presently
shown) to govern cases arising under policies of insurance. If this
maxim is to be applied, it disposes of the whole argument in the
present case, and why it should not be so applied we are unable to
see any reason.
Let us now look to the authorities upon the point. In
Busk
v. Royal Exchange Assurance Company, 2 Barn. & Ald. 73,
the very point came before the court. The policy covered the risk
by fire, and the question made was whether the fact that the loss
of the ship by fire was occasioned by the negligence of the crew
was a good defense; the court held that it was not. In that case,
the policy also included the risk of barratry, and it is now said
that the decision of the court turned wholly upon that
consideration, the court being of opinion that in a policy where
the underwriter takes the superior risk of barratry, there is no
ground to infer that he does not mean to take the inferior risk of
negligence; it is certainly true that the court does rely in its
judgment upon this circumstance, and it certainly does fortify it.
But there is no reason to say that the court wholly relied upon it
and that it constituted the exclusive ground of the judgment; on
the contrary, Mr. Justice Bayley, in delivering the opinion, takes
pains in the earlier part of that opinion to state and to rely upon
the maxim already stated. He said
"In our law, at least, there is no authority which says that the
underwriters are not liable for a loss the proximate cause of which
is one of the enumerated risks but the remote cause of which may be
traced to the misconduct of the master and mariners. . . . It is
certainly a strong argument against the objection, now raised for
the first time, that in the great variety of cases upon marine
policies which have been the subjects of litigation in courts of
justice (the facts of many of which must have presented a ground
for such a defense),
Page 36 U. S. 224
no such point has ever been made."
In
Walker v. Maitland, 5 Barn. & Ald. 173, a
similar question was presented, where the maxim was still more
strongly indicated, as the general, though not as the exclusive,
ground of the judgment. The case of
Bishop v. Pentland, 7
Barn. & Cres. 219, turned exclusively upon the very ground of
the maxim, and not a single judge relied upon the policy as
containing the risk of barratry. Indeed it does not appear that the
risk of barratry was in that case in the policy. Mr. Justice Bayley
on that occasion put the former cases as having been expressly
decided upon this maxim. His language was
"The cases of
Busk v. Royal Exchange Assurance Company
and
Walker v. Maitland establish as a principle that the
underwriters are liable for a loss the proximate cause of which is
one of the enumerated risks though the remote cause may be traced
to the negligence of the master and mariners."
Then came the case of
Patapsco Insurance Company v.
Coulter, 3 Pet. 222, where the loss was by fire and
barratry also was insured against. The Court on that occasion held
that in such a policy, a loss which was remotely caused by the
master or the crew was a risk taken in the policy, and the doctrine
in the English cases already cited was approved. It is true that
the Court lay great stress on the fact that barratry was insured
against, but it may also be stated that this ground was not
exclusively relied on, for the Court expressly referred to and
adopted the doctrine of the English cases that the proximate, and
not the remote, cause of a loss is to be looked to. It is known to
those of us who constituted a part of the Court at that time that a
majority of the Judges were then of opinion for the plaintiff upon
this last general ground, independently of the other. It was under
these circumstances, that the case of
Columbia
Insurance Company of Alexandria v. Lawrence, 10
Pet. 507, came on for argument, and the Court then thought that in
marine policies, whether containing the risk of barratry or not, a
loss whose proximate cause was a peril insured against is within
the protection of the policy notwithstanding it might have been
occasioned remotely by the negligence of the master and mariners.
We see no reason to change that opinion, and on the contrary, upon
the present argument, we are confirmed in it.
The third and fourth questions are completely answered by the
reasoning already stated. Those pleas contain no legal defense to
the action in the form and manner in which they are pleaded, and
are not sufficient to bar a recovery by the plaintiff.
Page 36 U. S. 225
Some suggestion was made at the bar whether the explosion, as
stated in the pleas, was a loss by fire or by explosion merely. We
are of opinion that as the explosion was caused by fire, the latter
was the proximate cause of the loss.
The fifth plea turns upon a different ground. It is that the
taking of gunpowder on board was an increase of the risk. If the
taking of the gunpowder on board was not justified by the usage of
the trade, and therefore was not contemplated as a risk by the
policy, there might be great reason to contend that if it increased
the risk, the loss was not covered by the policy. But in our
opinion the facts are too defectively stated in the fifth plea to
raise the question.
Our opinion will be certified to the circuit court
accordingly. On the first question in the negative, on the second
question in the affirmative, and on the third and fourth questions
in the negative.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Kentucky and on the questions and points on which the judges of the
said circuit court were opposed in opinion and which were certified
to this Court for its opinion, agreeable to the act of Congress in
such case made and provided, and was argued by counsel. On
consideration whereof it is the opinion of this Court, 1st, that
the policy does not "cover a loss of the boat by a fire, caused by
the barratry of the master and crew;" 2d, that the policy does
"cover a loss of the boat by fire, caused by the negligence,
carelessness or unskillfulness of the master and crew of the boat,
or any of them;" 3d, that the allegations of the defendants in
their pleas or either of them to the effect that the fire by which
the boat was lost was caused by the carelessness or the neglect or
unskillful conduct of the master and crew of the boat "is not a
defense to this action," and 4th, that the said pleas or either of
them are not sufficient in law as a bar to the action of the
plaintiff. Whereupon it is now here ordered and adjudged by this
Court that it be so certified to the said circuit court.
