Merchants Mutual Insurance v. Wilson

Eccx.estoh', J., delivered the opinion of the court. The policy on which this action of assumpsit was instituted, was underwritten by the appellants, for the purpose of effecting an insurance from Baltimore to Rio de Janeiro and back, by vessel or vessels, upon goods laden or to be laden onboard of the barque Commerce. In regard to the amount of insurance, it is provided, that “the said goods for so much as concerns this insurance, by agreement between the insured and insurers, are, and shall be, to amount of nine thousand dollars.” There is also a provision, that the company shall not be liable “for any partial loss on coffee or cocoa in bags, sugar in boxes or casks, flax-seed or rice, unless it amount to seven and a half per cent., or upwards, on the sum hereby insured.” In addition to the present policy, there were four others, upon the same cargo, effected by the appellee, the four together amounting to seventeen thousand dollars. According to the testimony which appears in the exception the appellee shipped two thousand three hundred bags of coffee, at Rio de Janeiro, on board of the Commerce bound to Baltimore.

Being much injured by bad weather the vessel was obliged to put into Barbadoes, where, upon survey, she was condemned and sold. Forty-five hags of the coffee were sold at Barbadoes, and the proceeds applied to the payment of expenses. Seventy-four bags were shipped on board of the Wm. J. V^atson, bound for Philadelphia, and the residue of the coffee came to Baltimore in the brig Bermuda.

The portion sent to Philadelphia was all damaged and sold. After the arrival of the Bermuda at Baltimore, Joseph Withers was employed by the plaintiff to select from the cargo such parts of the coffee as he might believe not to be damaged. ²³⁰ Withers states, “ that he found a large part of said coffee was damaged, and that he picked out five hundred and ninety-six bags of 'said coffee which he believed to be undamaged, and weighed the same.” He also stated, that whilst he was weighing the coffee, the surveyors, Jackson and Pearson, tried it with the tryer, and told him that he was mistaken, that it was all more or less injured; that he then tried it and found it all more or less musty; that he had been misled by the appearance of the bags; that said five hundred and ninety-six bags of coffee were sent to the warehouse of the plaintiff, and the balance of the coffee brought by the Bermuda, was sent to the auction rooms of R. Lemmon and Co. The witness Withers, further says, that the five hundred and ninety-six bags of coffee were dry, but that coffee may be injured by being in contact with anything damp, as being in contact with other bags of coffee that are damp; that dampness, in any way, will injure coffee and render it musty. On cross-examination by the counsel of the defendants, he stated, “that the plaintiff was present some part of every day while witness was selecting and weighing the above mentioned five hundred and ninety-six bags of coffee, but was not present all the time, or long at a time.” The coffee -which came in the Bermuda was surveyed in Baltimore, by T. R. Pearson and W. R. Jackson. According to their certificate, which includes the portion selected by Withers as above stated, the balance of the cargo was all more or less damaged by sea'- water—twenty-three bags of which were taken from the hold in bulk, so much injured, that they recommended the same should be sold forthwith.

They also certified, that if the coffee had arrived in a sound state, it would have been worth, in Baltimore, at six months credit, an average of seven and fifty-three hundredths cents per pound. W. R. Jackson being examined as a witness on the part of the plaintiff stated, that he was one of the persons who made the survey and valuation of the coffee; that he was employed by the plaintiff for that purpose, together with T. R. ²³¹ Pearson; that he believed the statements made in said survey and valuation were true ; that a part of the coffee was taken to the warehouse of the plaintiff and there stored, but he had a very indistinct recollection about it, and could not say whether that coffee was damaged or not. The plaintiff also examined T. R. Pearson as a witness, who stated, that he, together with W. R. Jackson, at the instance of the plaintiff, made said survey and valuation; that to the best of his recollection, the five hundred and ninety-six bags of coffee, which were selected by Withers and sent to the plaintiff’s warehouse, were all more or less damaged. The Bermuda arrived in Baltimore on the 13th of April 1847, and discharged her cargo from the 16th to the 21st of that month, and in a few days after, the coffee taken to the auction rooms of R. Lemmon and Co., was sold.

The defendants proved by John Gill, that in May or June 1847, the plaintiff placed in his hands the papers necessary for the purpose of making statements of his loss and damage on the cargo of coffee. The witness at the ■ instance of the plaintiff, made the statements marked A and B, and delivered them to him. The said John Gill had been a notary public in the city of Baltimore for more than forty years, and accustomed to make out statements of losses under policies of insurances by the various insurance companies in the city, and he considered himself familiar with the usages in that respect. The statements A and B he said were correctly made, according to the usage of the city, with the simple exception, that he had neglected to deduct three per cent, from the value which the coffee would have amounted to if it had arrived at Baltimore in a sound state; the witness having overlooked the fact, that the valuation in the survey was based upon the supposition of a sale at six months credit instead of cash.

He afterwards made the statement marked C, in which this error is corrected, which latter statement he considered correct in all respects, according to the usage in Baltimore, and this reduced the loss, below an average, under the policy in in this case. The witness further stated, that when the plain ²³² tiff brought his papers, he gave no particular directions, but asked him to make out the claim in the usual form. After receiving the papers, A and B, from Mr. Gill, the plaintiff presented to the defendants his claim, based tupon those papers, and received payment accordingly. A few days after, an officer of one of the insurance companies concerned in this risk, informed the president of this company of the error committed by Mr. Gill in not deducting the three per cent.

The president, being convinced of the error by an examination of the papers, called upon the plaintiff to refund the money. He was urged to do so, because he was informed of the error before the money was received by him; and he was told, that if he would return the money the defendants would pay the amount that might be due at any time, as soon as they were satisfied that the statements were correct. He replied, he would see about it, and next day he called and re-, paid the amount of cash which he had received, retaining the premium note, which had been given up to him, and that he still holds. A correspondence took place in regard to the plaintiff’s claim, between Mr. Marshall, as counsel for him, and the president of the company.

The note'of the president speaks of two different statements of his loss having been furnished by the plaintiff, each differing from the other; and then he says, “your note appears to differ from each of those.” The' last letter of Mr. Marshall, dated the 3rd January 1848, shows what is the difference between the claim as presented by him, and that by the plaintiff himself. He says, “ I found, however, that the notary to whom he had entrusted the presentation of his claim, had undertaken to apportion this loss among the several offices with which Mr. Wilson had insurance, and to claim from each its proportional part of this loss, respectively, to the amount it had subscribed; and by this means a question had been raised, whether Mr. Wilson’s loss amounted to seven and a half per cent, upon the amount insured by you?” To such an apportionment Mr. Marshall positively objects, and insists, that this company shall pay the whole loss. ²³³ In the statements made by J. Gill in adjusting the loss, it will be seen, that the premium notes are not added to the invoice value. To sustain the correctness of such an omission the defendants produced evidence to show, that it was in accordance with the usage in Baltimore. The witnesses examined on that point were John Gill, Mr. Baldwin, a clerk or secretary of the Mutual Safety Insurance Company of New York, at their agency in Baltimore, E. Didier, the president of the Mutual Fire and Marine Insurance Company of Baltimore, Captain Graham, former president of the defendants, and Samuel Thompson, president of the Atlantic Mutual Insurance Company of the city of Baltimore, and formerly president of the Baltimore Insurance Company.

The last witness says, he has been familiar with the mode of stating and adjusting marine insurance losses since 1837, and before that time. J. Gill has been a notary public for upwards of forty years, and accustomed to make out statements of such losses. And the four witnesses unite in proving it to be the usage in the city of Baltimore not to add the premium to the invoice value. The five hundred and ninety-six bags of coffee, selected by Withers, were not included in the statements of the plaintiff’s claim; nor were the defendants ever notified that this portion of the coffee which went to the warehouse of the plaintiff, was injured, or that they would be required to make good any loss on account thereof, until during the trial of the cause.

At least, there is nothing in the record to show any such claim at an earlier date, and we know nothing of the coffee after it went into the posession of the plaintiff. Whether it was sold at private or public sale, or for what price, or what became of it, we are not informed. At the trial it became, an important inquiry, whether the plaintiff was entitled to- any damages, and if any, to what amount on account of the five hundred and ninety-six bags of coffee? And on this subject his first prayer was presented, which the court gave, instructing the jury, “that if they shall find from the evidence in the cause, that the coffee of the ²³⁴ plaintiff contained in the five hundred and ninety-six bags, which was removed, whilst the vessel was discharging, to the plaintiff’s warehouse, was, at the time of its arrival at the port of Baltimore, in a damaged condition, and that its said damaged condition was caused during the voyage from Rio de Janeiro to Baltimore, by some of the perils insured against by the defendants, then the jury, in estimating the plaintiff’s loss on the cargo of coffee which arrived at Baltimore, may and ought to include, as an item in the computation of the plaintiff’s loss on his cargo of coffee, such amount-as, from the evidence in the cause, they may find to have been the plaintiff’s loss in consequence of said damaged condition of said coffee in said five hundred and ninety-six bags.” This instruction submits to the jury not only the question, whether this portion of the coffee was injured, but also the amount of the- damage.

Of course, it assumes that there was such evidence before them as would, in such a case, authorise them to ascertain and assess in damages the extent of the injury. In this view of the subject, we think the court below were in error. An agent appointed by the plaintiff for the express purpose of selecting from the cargo the sound coffee, in the discharge of that duty, took out as undamaged the five hundred and ninety-six bags. During the- selection and weighing, the plaintiff was present, each day, for a short time.

The coffee was taken to his own warehouse, and there is no testimony to show what became of it afterwards. After the selection was made, and whilst the coffee was being weighed, according to the testimony of the agent, (Withers,) the surveyors tried said bags of coffee with the tryer, and told him he was mistaken, that it was all more or less injured. Withers then tried it and found it all more or less musty. He says he had been misled by the appearance of the bags, which were dry; that dampness in any way will injure coffee' and render it musty, and that an injury of this sort may result from being in contact with other bags of coffee which are damp.

The surveyor, Jackson, recollected that a portion of the coffee was ²³⁵ taken to the warehouse of the plaintiff and there stored, but he had a very indistinct recollection about it, and could not say whether it was damaged or not. The other surveyor stated, “that to the best of his recollection, the five hundred and ninety-six bags of coffee which were selected by Withers and sent 1o the plaintiff’s warehouse, were all more or less damaged.” He also proved, that if this coffee had arrived in a sound slate, its value would have been $7.53 per one hundred pounds, if sold at six months credit. Allow this testimony its full force and effect, and all it can prove is, that the coffee was more or less damaged. How was it possible for the jury, from this, to ascertain the amount of injury?

It was said by the counsel for the appellee, they had before them the sales of the other part of the cargo, showing the loss on that, which would be some guide in regard to this. But that could afford no assistance. The testimony did not profess to draw any comparison between the two parcels. And it must be evident that there was a manifest difference between them, for one parcel was condemned as unsound and damaged, whilst the other was selected as being sound, and was actually received and stored as such by the plaintiff.

The witnesses did not say, that the coffee in the five hundred and ninety-six bags was damaged more or less than the residue of the cargo. And even if they had, it would have been very vague and indefinite. But they simply said it was more or less damaged, without giving any data with which to compare the more or less. Such testimony leaves the jury nothing to guide them hut speculation and conjecture.

Supposing that the plaintiff sustained any loss, the means of proving it must have been known to him, whilst the defendants were lulled into security by his conduct. Taking the coffee to his warehouse, after a selection made by his own agent, selling the balance of the cargo at auction, and presenting his claim for damages, excluding the five hundred and ninety-six bags; then placing his claim in the hands of counsel, who, in urging payment, made no demand on account of this coffee, the defendants might well have supposed ²³⁶ that no such loss as is now insisted upon, ever did occur. And believing this, it could not be expected that they would feel any necessity of having this portion of the cargo examined, to prove its soundness or the quantum of injury it had sustained. The proof offered, not only does not bring home to them the slightest knowledge of any damage, but it all tends to justify the conclusion on their part, that this coffee was sound.

The fact of unsoundness, and particularly the degree of it, is rendered exceedingly doubtful and uncertain, in consequence of the failure on the part of the plaintiff to produce evidence of any loss on the sale. From the length of time, it is fair to presume, that a sale was made before the trial of the cause. If so, and there was a loss, why did not the plaintiff produce the proof of it? The failure to do so justifies an inference, that there was no loss, or if any, it was so inconsiderable as not to be of any avails If there had been no sale and the coffee was still in the possession of the plaintiff, that fact might have been disclosed and an opportunity given to have it examined.

Certainly no inference favorable to the plaintiff could have been drawn from an opposite course of conduct. In Park on Insurance, 126, (old Ed.,) he notices the Hamburg ordinances, by which it is required that in case of damage to goods, the assured shall not open them, except in the presence of the assurers or their deputies, and if time and circumstances afford no opportunity for them to attend, yet the goods are not to be opened, but in the presence of a notary and some witnesses. He admits, that in the English law of insurance there is no such regulation, and that it has not been adopted in practice. But he says: “Indeed, it seems to be needless; because an assured, in order to entitle himself to recover for a partial loss, must prove by disinterested witnesses, to the satisfaction of the jury, the quantity of goods damaged in the course of the voyage.

The parties may, however, insist upon being present.” On the present occasion, the conduct of the plaintiff fully ²³⁷ justified the belief on the part of the defendants that they were not to be charged with any loss on the five hundred and ninety-six bags. Nothing occurred to change this belief until the trial of the cause. And then the coffee, through the agency of the plaintiff', had been so disposed of as to deny