Hugg v. Augusta Insurance & Banking Co.,
48 U.S. 595 (1849)

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U.S. Supreme Court

Hugg v. Augusta Insurance & Banking Co., 48 U.S. 7 How. 595 595 (1849)

Hugg v. Augusta Insurance & Banking Co.

48 U.S. (7 How.) 595


In an insurance upon freight, there is no total loss of a memorandum article as long as the goods have not lost their original character, but remain in specie, and in that condition are capable of being shipped to their destined port, no matter what may be the extent of the damage.

If, however, the articles are not capable of being carried in specie to the port of destination, arising from danger to the health of the crew or to the safety of the vessel, or the public authorities at the port of distress order the articles to be thrown overboard from fear of disease, there would be a total loss.

In construing the contract of insurance upon freight, the interest of the insured or of the underwriters of the cargo is not considered. Therefore, if the vessel is in a condition to carry on the cargo to the port of destination or another vessel can be procured for that purpose, it is the duty of the owner of the vessel to carry it on, although it may be for the interest of the insured and insurers of the cargo to sell it at the port of distress.

If so sold, the insured cannot recover for a total loss of freight.

But although it is the duty of the owner of the vessel either to repair his own or to procure another at the port of distress to carry on the cargo, yet if it should be made to appear that the repairs or procurement of another vessel would necessarily produce such a retardation of the voyage as would in all probability occasion a destruction of the article in specie before it could arrive at the port of destination, or from its damaged condition it could not be reshipped in time consistently with the health of the crew or safety of the vessel, or would not be in a fit condition, from pestilential effluvia or otherwise, to be carried on, it then became the duty of the master to sell the goods for the benefit of whom it might concern.

A policy of insurance upon

"freight of the bark Margaret Hugg at and from Baltimore to Rio Janeiro and back to Havana or Matanzas or a port in the United States, to the amount of $5,000, upon all lawful goods &c., beginning the adventure upon the said freight from and immediately following the lading thereof aforesaid at Baltimore, and continuing the same until the said goods, wares, and merchandise shall be safely landed at the port aforesaid,"

upon which a greater premium was paid than was usual for the outward voyage alone, must not be construed as a policy upon the round voyage.

The insurers were therefore not entitled to a deduction for the outward freight.

The Reporter finds the following statement prefixed to the opinion of the court, as delivered by MR. JUSTICE NELSON.

This is an action upon a policy of insurance on the freight of the bark Margaret Hugg, at and from Baltimore to Rio Janeiro and back to Havana or Matanzas, with liberty to touch and stay at any intermediate port in case of stress of weather or for the purpose of transacting business. The amount $5,000; premium, $158.25.

The policy contained the usual memorandum, enumerating various articles warranted free from average and all others that were perishable in their own nature.

About four hundred tons of jerked beef were shipped on board the vessel at Montevideo, which were to be delivered in good order at the port of Matanzas or Havana to the consignees,

Page 48 U. S. 596

they paying freight. The bill of lading was signed 25 April, 1842.

The vessel sailed from Montevideo on 29 April, and, after being out some forty-seven days, encountered a storm and was driven on Gingerbread Ground, where she received considerable damage; the rudder was broken and unshipped, and as the extent of the damage could not be ascertained, it was deemed prudent, on consultation with the captain of a wrecking vessel and Bahama pilot, to go into Nassau for the purpose of a survey and repairs. The wind was fair for that port, but strong ahead in the direction of Matanzas. The vessel was taken in charge of one of the wreckers, and arrived at Nassau on the second day, about 20 June, and grounded on the bar while entering the harbor and under the charge of the King's pilot, and sustained a good deal additional damage.

A part of the beef had been thrown overboard to lighten the vessel while on the Gingerbread Ground, and a much larger quantity while on the bar at Nassau. She had leaked while on the ground in the former place, so that it was necessary to work the pumps every half hour, and at the latter there was seven or eight feet of water in the hold, with some fourteen men at the pumps.

The beef was so much damaged by the sea water that the board of health at Nassau refused to allow but about one hundred and fifty tons to be landed. The rest was ordered to be carried outside the bar and thrown into the sea for fear of disease; it was wet and very much heated, some of it so changed as to become green, and all emitting an offensive stench. The portion allowed to be landed was wet and heated, and not in a fit condition to be shipped, and the board of health recommended to the authorities that it should be removed as soon as conveniently could be.

The vessel was surveyed after the cargo was discharged, and it was found that the rudder was entirely broken off, the forefoot gone, and the keel greatly shattered and damaged, and it appears to be conceded that she could not have been repaired at that port so as to have carried on the cargo, and that, if she could, it would have cost more than half her value. She was repaired sufficiently to bring her home in ballast. It also appears that there was no vessel in port that could be procured to forward on the remaining cargo even if it had been in a condition to be shipped.

The salvors libeled the vessel and cargo for salvage services in the Vice-Admiralty Court of the Bahamas on 30 June, 1842, to which the master put in an answer on 7

Page 48 U. S. 597

July, insisting that the libellants were entitled to compensation for pilotage only, and not for salvage.

The court, on 18 July, decreed $2,100 salvage to the libellants for services rendered to the vessel and cargo. Appraisers of the vessel and cargo taken on shore had been previously appointed, and on an examination of the cargo it was found to be so much damaged and in such a condition that they advised an immediate sale, as it was deteriorating in value daily.

The master assented to a sale accordingly, which was ordered by the court on his application on 1 July. The net proceeds amounted to $2,664.92. The time occupied in an ordinary voyage from Nassau to Matanzas is three days, and to Baltimore ten.

It was proved by several masters of vessels that the navigation at the place where the Margaret Hugg first grounded and was visited by the pilots was very hazardous, and that under similar circumstances they would have considered it their duty to have carried their vessel into the harbor at Nassau.

The regular premium for insurance of freight of the cargo covered by the policy for the outward voyage was about one and one eighth percent

Upon this state of facts appearing at the trial, the following questions were raised, and presented to the court, viz.:

1. It being admitted that the loss is to be adjusted according to the terms of the Baltimore Insurance Company, if the jury find that jerked beef was a perishable article within the meaning of the policy, are the defendants liable as for a total loss of freight unless the entire cargo was so totally destroyed that no part of it could have been carried to the port of destination even in a deteriorated and valueless condition?

2. If the jury find that from the condition of that portion of the cargo sold at Nassau (occasioned by the disasters stated in the testimony), it was for the interest of the insured and insurers upon the cargo that it should be so sold, and not transported to Matanzas, is the plaintiff entitled to recover for a total loss of freight, provided his own vessel could have been repaired in a reasonable time, so as to perform the voyage in safety, or he could have procured another vessel, and have transmitted to the port of destination, in its deteriorated state, the portion sold at Nassau? And

3. Assuming that the plaintiff is entitled to recover, is the policy on the amount mentioned for one entire voyage round, from Baltimore out and home again?, and are the defendants entitled to deduct from the amount insured the freight earned in the voyage from Baltimore to Rio upon the outward cargo?

Page 48 U. S. 604

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