U.S. Supreme Court Pleasants v. Maryland Insurance Company, 12 U.S. 8 Cranch 55 55 (1814)
Pleasants v. Maryland Insurance Company
12 U.S. (8 Cranch) 55
ERROR TO THE CIRCUIT COURT
FOR THE DISTRICT OF MARYLAND
When a cargo is insured by diverse policies in some of which the rate of exchange is fixed at which the prime cost of the cargo shall be valued, in ascertaining the amount of the interest of the insured upon settlement of those policies in which the rate of exchange is fixed, the whole cargo is to be valued at that rate of exchange without regard to the rate of exchange by which the value may have been ascertained in the other policies.
Error to the Circuit Court for the District of Maryland in an action upon a policy of insurance dated 18 May, 1810, on the cargo of the brig Elizabeth from St. Petersburgh or Cronstadt to Philadelphia against all risks, for $6,000, "valuing
the invoice ruble at 46 cents." The invoice amounted to 95,565.71 rubles, equal, at 46 cents per ruble, to $43,960.23.
Before this policy was made, the plaintiff had effected eight other policies in Philadelphia to the amount of $36,900. In the first seven of these policies, there was no valuation of the ruble, but in the eighth it was valued at 40 cents. The defendants, at the time of executing this policy, had no knowledge of those affected in Philadelphia.
The vessel and cargo were captured by a Danish vessel and condemned. The plaintiff abandoned in due time.
The underwriters at Philadelphia paid. But on settlement of the seven first policies, in which the value of the ruble was not fixed, and which insured
429,900, the underwriters, in order to ascertain whether the plaintiff's interest in the cargo amounted to the sum insured by those policies, viz.,: $29,900, insisted upon fixing the value of the ruble at thirty-three and a third cents.
On settlement of the eighth policy, which valued the ruble at forty cents, and which insured $7,000, the calculation (in order to ascertain whether the plaintiff had still a sufficient interest left to entitle him to receive the $7,000 insured by that policy) was made by converting the whole amount of the invoice into at 40 cents per ruble, and deducting therefrom the $29,900 received upon the seven preceding policies. By this mode of calculation, it appears (according to the statement in the bill of exceptions, which, however, does not seem to be accurate) that after the plaintiff had received the $29,900 insured by the seven first policies, and the $7,000 insured by the eighth policy, his remaining interest to be covered by the ninth policy, was only 1,481.71 rubles, equal, at 46 cents per ruble, to $682.58.
But if, on settlement of this last policy, the plaintiff is entitled to have the value of his interest in the cargo ascertained by converting the whole amount of the invoice
into, at the rate of 46 cents per ruble, and deducting therefrom the $36,900 covered by the eight prior policies, then his remaining interest to be covered by this policy would be more than the $6,000 insured thereby.
The only question saved by the bill of exceptions at the trial below was whether the plaintiff should recover according to the first or according to the latter mode of calculation.
The plaintiff contended for the latter, but the court overruled him and directed the jury that he was only entitled to recover according to the former -- they found a verdict accordingly, whereupon the plaintiff brought his writ of error.
JOHNSON, J. delivered the opinion of the Court as follows:
This is the case of an insurance on a voyage from St. Petersburgh or Cronstadt to Philadelphia, effected in the year 1810. The vessel was captured and the assured abandoned. The only difficulty arises on the principles upon which the loss shall be adjusted.
Besides this policy, eight others were effected in Philadelphia. In seven of them, no valuation was attached to the ruble. In the eighth, it was valued at 40 cents, and on this, which was the ninth in order, at 46 cents. In settling the seven first the ruble was estimated at thirty-three and a third cents, which was the received value at Philadelphia. On the eighth it was settled at the stipulated value of 40 cents. The value of goods laden on board the ship was proved to be 95,565 rubles. The sums paid on the eight first policies corresponded to the adjusted value of 94,084 rubles, leaving a balance of only 1,481, equal, at 46 cents, to about $682 unpaid. But if the whole amount of
the cargo be brought into at 46 cents to the ruble, and the sum in actually paid on the other policies be deducted, there will still remain more unpaid than would exhaust the whole sum underwritten on the ninth policy.
On the part of the defendant it is contended that the compensation paid to the plaintiff on the other policies is absolute and complete as to the corresponding amount in rubles, leaving only $1,481 unpaid. On the other hand, the plaintiff contends that the compensation was only relative, and cannot affect his rights as between himself and this defendant. And of this opinion is the majority of the Court.
The object to be attained is to secure to the assured a fair indemnity under all the advantages which he has purchased of the insurers.
The intention of the parties in attaching a fixed value to the ruble appears in the order for insurance, to-wit: "to distinguish between the paper and specie ruble."
It is very well known that the ruble is the money of account in Russia. It was originally a coin corresponding in value to the American dollar. But by the forced circulation of a paper representative of the ruble, dependent on nothing but mere national faith or national force for its value, the silver ruble has nominally doubled or trebled itself in value. The astonishing and rapid fluctuation in its value appears from the evidence in this case, in which it is stated that in the year 1810 it varied from forty-eight to twenty-five cents.
To secure the assured against the effects of this fluctuation was the object of the parties in attaching a specific value to the ruble, and as the whole cargo would be affected in value by this cause, and the policy was upon the cargo generally, we are of opinion that no other principle in calculating the loss would afford him the indemnity stipulated for in the policy.
The principle contended for by the defendant is subject to this obvious objection that it is not reciprocal.
Had the adjustment of the value of the ruble in the other cases exceeded forty-six cents, that adjustment would not in any respect have resulted to his benefit.
There is one difficulty of which the Court is fully aware, which is that the interest assigned in the abandonment if estimated in rubles will be inversely as the rate at which the ruble is estimated, so that he who pays most would acquire least. But in this case the objection does not arise, as the plaintiff, by a compromise with the underwriters on some of the other policies, has reserved a sufficient interest in the subject of abandonment to meet the just claims of these underwriters. And in no case would this consideration create a difficulty as between the parties to a policy. Among the underwriters alone in the distribution of the proceeds of the thing abandoned would it be necessary to determine on the correct rule to be applied in such a case.
Had the policy which is the subject of this suit been a valued policy, and declared the value of the whole cargo to be $43,929, the actual amount at the stipulated valuation of the ruble, the same objection would have presented itself, but certainly would not have availed to prevent a recovery.
The judgment below must therefore be
Reversed and the case remanded.