US SUPREME COURT DECISIONS

CASE on a policy of insurance, upon the freight of the ship Richmond, for a voyage, at and from Philadelphia to Batavia, and thence back again. The premium was 20 per cent. 'to return five per cent. if the ship proceeds only to Batavia and back to Philadelphia, and no loss happens;' and the insurance was declared to be 'on freight advanced here, and which, by agreement, is valued at 13,500 dollars.' The policy, also, contained the usual clause, that there should be no average loss recovered, if less than 5 per cent. unless it was general.

On the trial of the cause, it appeared, that the Richmond was owned by Messrs. Jesse and Robert Waln; that the plaintiff purchased from the owners, three-eighths of the tonnage of the ship, for the voyage, at the price of 10,837 dollars 50 cents, which was paid before the ship sailed; that the Richmond proceeded safely to Batavia, but, on her return thence to Philadelphia, she was captured by a French privateer, who ordered her to Guadaloupe, and she was afterwards re-taken by a British ship of war, who carried her into Martinique; that upon a libel for salvage at Martinique, [459-Continued.]

one half of the full value of the ship and cargo was decreed to the recaptors, and the claimants charged with all costs; and that by agreement between the captain and the supercargo, on the one hand, and the re- captors, on the other, one half of the cargo was specifically delivered to the latter, and 2750l. fixed for the salvage on the ship, which was paid by a draft on the owners at Philadelphia, secured by an hypothecation.

The present suit was brought to recover an average loss; and the case being submitted for the opinion of the Court, two questions were discussed: 1st. Whether the subject described in the policy was an insurable interest. 2d. Whether, under all the circumstances of the case, the insurers were liable for a general average. (a)

1st. The plaintiff's counsel, contending that the interest was insurable, urged, 1st. That it was a lawful interest. It is the payment of a sum of money, for the benefit of bringing home a return cargo, either as owner, or upon freight. There is no general law, no law of America, or of England, against the payment of freight in advance, whatever may be the law of France; 2 Marsh. 644. and there is scarcely a subject of property, for which

(a) Mr. Fitzsimmons, a merchant and underwriter of great in elligence and experience, proved, at the trial of the cause, that the interest, acquired by the plaintiff, in the tonnage of the ship, was a well known subject of insurance in Philadelphia. He, also, proved, that an adjustment of the average loss, on the present voyage, had been made; in which the insurance companies, and most of the private underwriters, had acquiesced. On the effect of the adjustment, the plaintiffs cited Park. 118. Marsh. 244.

Page 4 U.S. 459, 460

a price is paid and received, that may not be the subject of insurance, unless where general policy forbids; as in the case of seamen's wages. Park. 9. (5 Edit.) Ib. 103. Nor, can this be considered as a double insurance; for it is a distinct interest; and different insurances may be effected by different persons, having different rights, in the same property. 1 Marsh. 282. Park. 103. Nor is it a loan upon bottomry; for it was not advanced on the pledge of the ship herself, but for the use of her tonnage; and it is immaterial, that the valuation in the policy, exceeds the actual cost; as the plaintiff had a right to cover the premium, charges, interest, and profit, as well as his advance. 2d. The interest insured was liable to hazard and loss; and, therefore, it was insurable. If the ship had been totally lost, the plaintiff's use of the tonnage, for which he had paid, was gone, and the owner of the ship could not be compelled to refund. 3d. The interest is well described in the policy. It is not a purchase of a share in the vessel; but of a right to convey goods in her, upon the voyage insured; and the transaction does not violate the registering act, on the point of ownership, (2 vol. 147.s. 14. Swift's Edit.) or even, on the supposition of its amounting to a sale of a part of the vessel, it only forfeits the American privileges; it does not affect the insurable quality of the interest acquired. But, again: when it is objected, that none but the owners of a ship can recover upon an insurance of freight; the objection obviously arises from confounding the purchase of the right of freight, paid in advance, with freight to be earned and received, at the end of the voyage. It is clear, that the owners of the ship could not insure, (and certainly they did not attempt it) as freight, the tonnage purchased by the plaintiff. And when the plaintiff proposed the insurance, the intention of the parties, according to the facts disclosed, without objection at the time, ought to govern the construction of the policy. Park. 439. (4 Edit.)

2d. On the second point, the plaintiff's counsel insisted, that whether the salvage was considered as freight, or as a charge upon goods, the interest insured was liable to a general average; and, if so, the underwriters on the present policy were bound to furnish an indemnity. Ship, freight, and cargo, contribute to general average. Park. 121. Abbot 215. (Am. Edit.) 1 East, 220. If it is essential to a general average, that the loss should be voluntarily incurred, surely the payment of salvage, upon a re-capture, is an act as voluntary, as throwing goods into the sea, upon the coercion of a tempest. Nay, it is within the express stipulation of the policy, that the assured shall labour to recover the property from any jeopardy, in which it is involved, by a risque insured against. Park. 140, 1. 123. Ab. 218. 2 Burr. 1213. 1 Mag. 245. 1 Rob. Rep. 86. And, if ship, freight, and goods, all contribute to a general average, the plaintiff's interest in the use of the ship could only contribute in this way; and, contributing at all, is entitled [4 U.S. 459, 461]

Full Text of Opinion