Subscribe to Cases that cite 12 U. S. 75 RSS feed for this section

U.S. Supreme Court

Gracie v. Marine Insurance Company of Baltimore, 12 U.S. 8 Cranch 75 75 (1814)

Gracie v. Marine Insurance Company of Baltimore

12 U.S. (8 Cranch) 75




A policy on goods to be safely landed at Leghorn is discharged by landing them at the lazaretto, that being the usage of trade.

Quaere whether ransom can be recovered where there is a warranty against particular average.

The facts of the case, as stated by MR. CHIEF JUSTICE MARSHALL in delivering the opinion of the Court were as follows:

This case arises on a policy of insurance bearing date 19 June, 1807, for $20,000 on the cargo of the ship Spartan "at and from Baltimore to Leghorn," the risk to commence on the loading and to continue "until the said goods shall be safely landed at Leghorn aforesaid."

The policy contained, in the printed part, the usual stipulation that the assured, in case of loss, shall labor, &c., for the preservation and recovery of the goods, to the expense of which the assurers would contribute according to the rate of the sum insured; in the policy is inserted in writing the words "warranted free from particular average."

The vessel sailed from Baltimore in June, 1807, and on 15 August arrived in the port of Leghorn.

According to the laws and usages of the place, ships arriving at that port and their cargoes were obliged to perform a quarantine of thirty days before admission of the cargo or of any person on board, into the city, the ships performing it in the port, the cargoes in a certain lazaretto erected for that purpose on the shore of the port about half a mile from the city. Some specified articles were excepted from this rule, but the cargo of the Spartan did not come within the exception. On the arrival in port of a vessel liable to quarantine, chanrobles.com-red

Page 12 U. S. 76

the officers of government took possession of the cargo and removed it in public lighters to the lazaretto. Freight was earned upon the depositing of the cargo in the lazaretto, but payment of it, though often made before, could not be enforced until after the expiration of the quarantine, and until payment, the lien for the freight continued on the goods. The duties also accrued in the lazaretto, and until they were paid the goods could not be removed thence into the city.

The goods remained in the custody of the officers of government until the expiration of the quarantine, during the continuance of which neither the master of the ship nor the consignees had any power to interfere with or even see them but under a permit from the local authorities; such permits were commonly allowed the consignees, who might take samples and sell by those samples while the goods were performing quarantine.

After quarantine was performed and an order from the master obtained, the goods were received at the lazaretto by the owner or consignee, and transported at his risk and expense into the city. This transportation was most usually made by water, but there was a road along which light goods might be and frequently were carried. Even when goods were sold during the quarantine, they were removed at the risk and charge of the vendors.

In conformity with these regulations, the cargo of the Spartan was placed in the lazaretto. While it remained there performing quarantine, a body of French troops took possession of the city, seized the lazaretto, sequestered the goods there deposited, and refused to give them up until a ransom amounting to 53 percent on their estimated value should be paid for them. This ransom the owners or consignees were compelled to pay in order to obtain restitution of their goods. This action is brought to recover it from the underwriters.

Judgment was rendered in the circuit court for the defendants, which judgment is now brought before this Court by a writ of error. chanrobles.com-red

Page 12 U. S. 82

MR. CHIEF JUSTICE MARSHALL, after stating the case, delivered the opinion of the Court as follows:

The plaintiff in error contends

1st. That the placing of the goods in the lazaretto was not "a landing in safety at Leghorn" and a termination of the voyage.

2d. If the loss happened during the continuance of the risk, the plaintiff is not prevented from recovering by the warranty in the policy against particular average.

In support of his first point, he contends that "Leghorn," in the policy, means the city, and not the port of Leghorn.

2d. That the lazaretto being substituted for the ship for the greater safety of the goods, their situation, as it respects all parties, while performing quarantine in the lazaretto is precisely the same as if performing quarantine in the ship. This argument is supposed to be much strengthened by the facts that freight cannot be demanded until quarantine is performed, and that the lien for the freight continues after the landing of the goods.

3d. That a landing in safety must be such a landing as places the goods at the disposal of the owner or consignee.

However true it may be in general that when we speak of Leghorn, we speak of the city which bears that name, it does not follow that the same meaning is attached to the word when used in a policy. The insurance is "at and from Baltimore to Leghorn." Now if, as is admitted, Baltimore means the port of Baltimore, it would seem not unreasonable to suppose that, in the same instrument, Leghorn means the port of Leghorn -- the place which is the ultimate destination of the vessel on board which the goods are laden. The voyage is understood to be terminated when the vessel arrives at her port of destination and has been moored there in safety for twenty-four hours.

But it will be conceded that the termination of the voyage as to the ship does not necessarily terminate the risk on the goods. This risk may continue when the voyage at to the ship is ended. Its duration depends on the intention of the parties, and this intention must be found in their contract.

This brings us to consider the argument that the goods, while performing quarantine in the lazaretto, remain at the risk of the insurer in like manner as if performing quarantine in the ship.

The words of the policy being

"beginning the adventure on the said lawful goods and merchandises from and immediately following the lading thereof on board of said vessel at Baltimore aforesaid, and so shall continue and endure until the said goods and merchandises shall be safely landed at Leghorn aforesaid."

The risk continues until the goods be safely landed, although the chanrobles.com-red

Page 12 U. S. 83

voyage as to the ship, might be terminated previous to their landing.

In ordinary cases, where the government does not interfere between the parties, this risk would continue until the goods should be landed in safety at the usual place and at the disposal of the consignee. If it were usual to receive goods at the lazaretto or at any other place on the shore of the port, it would be the duty of the owner or consignee to receive them there, and a landing at such place, it is admitted, would be a landing at Leghorn.

If on the other hand the goods while performing quarantine remained on board the ship and could not be landed, it is not to be doubted that they would remain at the risk of the insurer. How then, it is asked, can the substitution of the lazaretto for the ship alter this risk? A substitution made not by the act of the parties, but of the government of the country? A substitution which does not alter the rights of the parties, since it leaves the lien of the master for his freight unimpaired and gives no power over the goods to the owner or consignee? A substitution beneficial to the insurer since it diminishes the risk on the goods?

Whatever might be the effect of this reasoning if the establishment of the lazaretto and the laws of quarantine had been of so recent a date as not to have been in the contemplation of the parties to the contract, as to which the Court gives no opinion, this cause may well be decided upon the usage found in this case -- a usage of ancient date and of general notoriety. It existed and was known to exist when this contract was formed. When the parties stipulated that the adventure should continue till the goods were landed in safety at Leghorn, they knew that the place of landing was the lazaretto, and that the landing would be made under the direction and control of the local authority. This then must be considered as the landing contemplated in the policy. It is the landing which terminates the risk. Had the parties intended to continue the risk during the continuance of the goods in the lazaretto, they would have inserted, in the policy, words manifesting that intention. Instead of terminating the adventure on the landing, a chanrobles.com-red

Page 12 U. S. 84

fact which they knew must take place at the lazaretto thirty days before the goods could be delivered to the owner or consignee, they would have continued it till the goods should be landed in safety and should perform their quarantine.

The Court is of opinion that under this policy, the goods in the lazaretto were not at the risk of the underwriters, and consequently that there is no error in the judgment of the circuit court.

It is

Affirmed with costs.


ChanRobles Professional Review, Inc.

ChanRobles Professional Review, Inc. : www.chanroblesprofessionalreview.com
ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com
ChanRobles CPA Review Online

ChanRobles CPALE Review Online : www.chanroblescpareviewonline.com
ChanRobles Special Lecture Series

ChanRobles Special Lecture Series - Memory Man : www.chanroblesbar.com/memoryman