Merchants & Miners' Transportation Co. v. Associated Firemen's Insurance

Robinson, J., delivered the opinion of the Court. This suit is brought by the appellant, owner of the steamer “ George Appold,” on a fire policy issued by the appellee, insuring said steamer against loss by fire. It appears that on the 20th October, lS^T, while loading at the port of Savannah, a fire was discovered among a cargo of cotton stowed in the forehold of the steamer, and in order to save both the steamer and cargo from destruction, it was found necessary to submerge the vessel. The damages direct and indirect to the steamer itself, were estimated at $2500, and the damages to the cargo at $10,500.

The adjuster to whom the matter was referred decided, that the damages to the cargo were according to the usage and laws of 'the port of Baltimore, subject to the law of general average; and the appellant as owner of the steamer was obliged to contribute to the cargo the sum of $5231.29. The steamer was insured by the appellee and other fire companies to the amount of $80,000; and the cargo was insured under marine policies. The fire companies tender themselves ready to pay $2500, the amount of damage sustained by the steamer, ⁴⁵⁹ hut the appellant claims that in addition to this sum, he is entitled to recover the amount paid hy him under the law of general average to the cargo. And this is the question, and the sole question at issue between the parties.

Were this a question to he determined purely upon equitable principles, there might he some ground to support the appellant’s contention. The steamer was fully insured hy the fire companies, and in the event of its destruction hy fire, they would have been liable for the entire loss sustained hy the appellant. In that event, instead of the sum of $5231.29 now claimed hy the appellant, they would have been obliged to pay the entire amount covered by their respective policies. If the steamer was saved from destruction hy being submerged, and the appellant as owner was in consequence thereof, obliged to pay five thousand dollars for damages to the cargo, it would seem hut fair and equitable that he' should he reimbursed a loss thus incurred for the benefit and protection of the insurers.

The liability however of the insurer is one arising upon contract, and must be determined by the terms of the policy upon which this suit is brought. It is hardly necessary to say, that a policy of insurance like any other contract, must he construed according to the evident intention of the parties, to he gathered from the language used taken in connection with the subject-matter to which it refers. The rights and obligations of the parties to this suit must therefore he determined hy the contract as made between them; and we have no power to add new conditions or to extend the risk beyond what is fairly within the terms of the policy itself. Now what are the terms of this policy ?

Looking to the face of it, we find the thing insured is a steamer, and the peril insured against is loss by fire. No other risk was assumed hy the insurer, and indemnity ⁴⁶⁰ against loss from this peril and this alone was the consideration for which the premium was paid by the insured. Here then is a contract in regard to a specific subject and made for a specific purpose, and by it the córrela tive rights and obligations of the parties must be determined. It is not contended that the appellee has in express terms agreed to reimburse the appellant for losses which as owner he might be obliged to contribute to the cargo, but the argument is, that the insurer is liable for all damages resulting directly from the peril insured against, and that actual combustion is not always the test by which such damages are to he ascertained.

This in a certain sense is true. The insurer of a stock of goods may he liable for damages caused by water, although the water was used to extinguish a fire upon the house in which such goods are stored. And upon the same principle it has been held, that the insurer of a house is liable for its destruction, when such destruction was absolutely necessary to arrest the progress of a fire in a city. City Fire Ins.

Co. vs. Corlies, 21 Wendell, 367 ; Wetherall vs. Marine Ins. Co., 49 Me., 200; Geisek vs. Crescent Mutual Ins. Co., 19 La. An., 297; Hillier vs. Allegheny Co. Mut.

Ins. Co., 3 Penn., 470 ; Thompson vs. Montreal Ins. Co., 6 U. C., Q. B., 319. In these and other like cases, the law presumes, that the parties from the very nature of things, must have contemplated the natural aad physical consequences resulting from the peril insured against.

So, in this case, the appellee is not only liable for the damages to the ship from actual combustion, hut also for