U.S. Supreme Court JONES v. INSURANCE CO OF NORTH AMERICA, 4 U.S. 246 (1802)
4 U.S. 246 (Dall.)
Jones et al.
The Insurance Company of North-America.
Supreme Court of Pennsylvania.
December Term, 1802
COVENANT, on a policy of insurance, dated the 30th of November 1792, upon the freight of the brig, called the Benjamin Franklin, valued at 3000 dollars, for a voyage 'at and from Bourdeaux to a port in the United States,' against 'the seas, &c.; arrests, restraints, detainments of all kings, &c.;' in the usual terms of the printed policies. The premium was six per cent.; and, it was declared, 'that this insurance is made on the freight of the above brig, valued at the sum insured, for two thirds thereof, &c.;'
On the evidence, it appeared, that the brig sailed from Bourdeax on the 17th day of November 1792, bound for Philadelphia; but, on the 20th of November, before she had reached the mouth of the Garonne, she was embargoed by the French government. The embargo continued until the 10th of January 1793; when the brig prosecuted her voyage; arrived at Philadelphia on the 5th of March; and there, on delivery of the cargo, the assured received the amount of the freight, originally stipulated to be paid, from the respective shippers.
During the embargo, however, an expense was incurred, for the seamen's wages and provisions, and extra-pilotage, amounting to 875 dollars and 13 cents, for two thirds of which (according to the proportion of freight insured) the plaintiffs claimed to be indemnified, by the underwriters upon the present policy: and the validity of this claim, was the only matter in controversy, upon the trial of the cause.
For the plaintiffs, it was contended, that the expenses incurred during the embargo, were a direct consequence of the embargo, operating as a partial loss upon the freight; that, therefore, the
sum ought to be paid, or reimbursed, by the defendants, so far as the interest of the plaintiffs extended; that the expenses of the embargo, might either be estimated by the jury, upon a consideration of the time, and the burthen of the vessel; or from the actual disbursement (which the counsel for the defendants agreed and admitted) and that the premium, being paid for an insurance against the peril of an embargo, applied to a partial, as well as to a total, loss of the frieght. In the course of the plaintiffs' argument, the ollowing books were cited: Mill. on Ins. 339. Park, 121. 124. Abb. 274, 5. 282, 3, 4, 5, 6. 2 Marsh. 620. 628. 2 T. Rep. 414. 1 Val. Com. 168, 169, 170. 1 Emerig. 539. Park, 53. 1 T. Rep. 127. 129. 132. 4 T. Rep. 208. 210, 211. 6 T. Rep. 413. 419. 422, 423. 425. Park, 127. 1 Mag. 250. 254. 7 T. Rep. 421. Park, 78. 2 East, 544. 1 Bous. & Pull. 203. Doug. 268. 586. 1 East, 228. 2 Burr. 696.
For the defendants, it was insisted, that on this policy upon freight, specifically, the expenses of seamen's wages, &c.; during the embargo, were not recoverable; for, the brig, coming to her port of delivery in safety, had earned, and actually had received, her whole freight. Besides, it was contended, that such an allowance would be contrary to an established and uniform usage, among merchants and underwriters; and it was attempted to prove by the testimony of witnesses, and the certificates of insurance brokers (admitted by consent) that such an usage existed. The attempt failed, however, on the investigation; and the verdict of the jury gave a negative to the usage. In the course of the argument for the defendants, the following books were cited. 1 T. Rep. 127. Park, 59. 2 Marsh. 628. 4 T. Rep. 210. Abb. 221, 2, 3. 2 Marsh. 570. 625, 6. 628. 1 Emerig. 539. Pothier, 'Charter Party.' 35. Park, 116. Abb. 228, 9. 2 Marsh. 467. Park, 124. Wesk. 252, 3. 499. 135. 244. Beawes. L. M. 137. 4 T. Rep. 208. 1 Mag. 168, 9, 170.
The CHIEF JUSTICE delivered the unanimous opinion of the Court (all the Judges being present) in the charge to the jury.
SHIPPEN, Chief Justice.
There is no direct judicial authority in the books, upon the case now before the Court. The case must, therefore, be decided either upon principle, or upon usage.
The present policy is an insurance upon freight, against the peril of an embargo, as well as against the other enumerated perils. The expense for seamen's wages and provisions, claimed upon the policy, was an immediate consequence of the embargo at Bourdeaux. That expense, it has been often decided, does not fall upon the underwriters of the ship, or the cargo; but, it is remarkable, that Judge BULLER (a Judge of uncommon understanding and precision) when, concurring in that opinion, emphatically adds, 'the freight must bear it:' and, if the freight must bear
it, the implication is strong, that the policy upon freight, must be the appropriate instrument of indemnity.
Considering the point, however, abstractedly, upon principle, it is naturally asked, why the law should admit, upon every other subject of insurance, a recovery against the underwriters, for a partial, as well as for a total, loss; and exclude such a recovery, in the instance of freight? Freight is exposed to a partial diminution of its value, as well as the ship, or the cargo; and, equally with those, contributes to the payment of a general average, arising from a loss, in its nature partial. The assured on freight, too, may abandon to the underwriters, in the same cases of a loss, not actually, but constructively, total, in which the abandonment is permitted to the assured upon the ship, or cargo. Where, then, is the ground of descrimination, upon the present question? Though the assured receive, nominally, the amount of the freight, from the shippers, they receive, in fact, so much less of the valued freight, than they would have received, if there had been no embargo, as is the amount of the expense, which the embargo occasions. The injury is done exclusively to the freight; and if the detention were long, it might, in some cases, amount to the whole freight. Now, every insurance is meant to be an indemnity; but refuse to pay the assured upon freight, the extracharge, a charge not contemplated in the ordinary course of the voyage, which falls upon freight, in consequence of an embargo (a risque insured against) and how can the insurance be called an indemnity? In short, though the case has not hitherto been expressly decided; and though he have not had much time for deliberation; yet, we think, that as far as the opinion of the Judges of England can be ascertained, by a fair inference, from the expressions of the books; and, we are confident, by a fair application of the principle of insurance; the plaintiffs are entitled to a verdict, unless there is a settled, uniform, usage of commerce, to the contrary.
The existence of such a usage was strongly stated, in the opening of the defence; and we expected to receive light and satisfaction from the evidence upon the subject: for, the usages of any trade; but, above all, the usages of trade and commerce, in giving a practical construction to policies of insurance; are of so high a consideration, that they are deemed to be a part of the express and written contract, whenever they are proved with sufficient certainty. Nor is a usage of trade, to be scanned by the strict rules, for the allowance of a common law custom. If it exists; if it is known and uniform; and if it is not, in itself, unlawful; it ought to prevail in the decision of a commercial controversy.
But, we confess, that we have been disappointed in our own general expectations; though we leave it to the jury (whose exclusive province it is) to decide upon the proof of the usage, in the present case. It appears, that the question has seldom occurred
among the merchants and underwriters of Philadelphia; and, in the few instances, in which it has occurred, the demand has been as often allowed, as it was rejected. Still, however, we repeat, the jury have a right to pronounce their own sense of the evidence. If they think, a commercial usage upon the subject has been proved, in opposition to the claim of the plaintiffs, their verdict must be for the defendants. But, in the absence of any commercial usage, the weight of authority and principle, seems to call for a contrary decision.
Verdict for the plaintiffs.
Dallas, for the plaintiffs.
Ingersoll, E. Tilghman, and Moylan, for the defendants.
doubted on this point, we should have been inclined to afford an opportunity, for the revision of our opinion on the principal question; however satisfied we are, in our own minds, that it is correct in principle and law. [ Footnote 1 ] Footnotes
Footnote 1 In the case of Kingston v. Girard, the Court declared, that, after long and mature consideration, they were perfectly satisfied with their decision in Jones et al. v. The Insurance Company of North America. The case is still depending in the High Court of Errors and Appeals, upon the bill of exceptions. It has been once argued there; but a second argument has become necessary, in consequence of several changes on the bench.