towards the complainants in the place she would occupy if she now owned the patent, and must abide by the agreemeni. An injunction is granted.
THE SIDNEy. 1 THE WILLIAM
PROVIDENOE WASHINGTON INs. CO. v.
and her Consort,
(District Oourt, S. D. New York. ,January 30, 1885.)
A cargo of wheat, from the west to New York, was laden at Buffalo, through M. & Co., forwarders, on the canal-boat W., and insured by them as part of the price of freight agreed upon. At the beginning of the season, M. & Co. had taken out an "open policy" with the libelants "for whom it may concern," which required that each transaetion under it should be entered in an accompanying policy book, or indorsed on the policy, stating the persons 011 whose account it was effected. A certificate payable to order was issued on thifl transaction to M. & Co., in their names, without the words" on account of whom it may concern," or eqnivalent words, and their names only were entered in the policy book. M. & Co. delivered the certificate, indorsed by them, along with the bill of lading signed by the captain of the W., which they also signed, to the agents of the owners, paying some $200 prior charges, and also making' further advances to the captain for the trip. They took from the master a separate bill of lading in which they were described as shippers, and in which the Loat and cargo were consigned to their own New York agents, for their own prutection. While the 'Vorden was coming down the Hudson, in charge of the Sidney, both vessels belonging to the same owner, a steam-tiue on the 8id· ney burst; the vessels drifted and stranded npon an island and the W.'s cargo was lost. The owners abandoned to thE' insurers, who paid them as for a total loss, and, claiming to be suhrogated to the rights of the owners against the carriers, filed a Ii bel against the S. and W. to recover for the loss. Held, that the consignees, the carrier, and M. & 00. had each an insurable interest in the cargo to its whole valne; that a policy" for whom it may concern" assures all persons, having an insurable interest, that are intended to be covered by it, whether known to the insurers or not; that the conditioll8 of the policy and the certificate in this case limited the general words of the policy, and that only M. & Co., the persons named, were" the assured" under the policy; and that the persons and interests assured could not be enlarged by parol evidence, and that the libelants, on paying the owners, as indorsees of the certiticate, were subrogated to the rights of M. & 00. only.
SAME-CAnmERS-AGE!<[Cy-BENEFI'J' OF INSURANCE.
M. & Co., in procuring freIght and making advances on account of the carrier, acted as his agents. The insurance effected by M. & 00. was intended for the benefit of the shipper, the carrier, and for themselves, and was effected upon the request and authority of bot h, there being no express reference to suhrogation in the policy. Held, that such subrogation is a mere equity, depending on the actual relation of the various parties to one another, and is therefore subordinate to the equitable rights existing between a principal and his agent, who effects the insurance for the benefit of both; that the payment by the insurers in this case to the owners, was, III effect, the same as a payment to M. &
lRellorted by R. D. & Edward Benedict, Esqs., of the New York bar
& 00., the carrier, as principal, could have compelled a payment by M. & Co.,
Co., and by thc lattcr to thc owners; that on payment of the insurance to M.
as his agents, to the owners, in discharge of their joint liability under the bill of lading; and therefore that no equitable right of subrogation existed through M. & Co., against the carrier, in favor of the insurers.
SAMg-VOLUNTARY SETTLEMENT-NEGLIGENCE-BuHDEN OF PROOF-PRIVIES.
The policy loss tlll'ough .. want of ordinary care and skill in navigating said \)oats." Held, that if the case were one of doubt whether the loss happened \)y negligence or not, and if the carrier were not equitably entitled to the benefit of the policy, the insurers might have paid the owners of the goods with an assignment of all claims for damages to themselves, and then have prosecuted the carriers for indemnity, and recovered on proof that the loss was in fact due to negligence of the carrier; but that as the company has once paid the owner upon a voluntary settlement, as upon a loss under the policy, and the carrier being equitably entitled to the benefit of the policy, he is entitled to the benefit of the settlement made under it; and that such a settlement cannot be set aside except for duress, fraud, or mistake, and that the burden of proof, in an action to recover back the money from the carrier, was upon the libelants to show the fraud or mistake, and also that the loss was within the exception of the policy, and not a valid claim.
SAME-Loss :KOT COVERED BY POLICY.
And as the libel charged negligence, and the answer denied It, and averred that the stranding of the boat occurred under such circumstances as negatived the charge of negligence, and no proof being offered by either party on this point, or that there was any fraud or mistake in the settlement, lwld, the libelant could not recover on the claim tha.t the loss was not covered by the policy.
In Admiralty. E. D .· "r[cCarthy, for libelants. H.IIland (c· Zabriskie, for respondents. BROWN, J. The libelants, at Buffalo, insured a cargo of wheat on board the canal-boat Worden, in tow of the Sidney, consigned to Armour, Plankinton & Co., of New York. One of the steam-flues of the Sidney having burst while she was coming down the Hudson river, she became unmanageable, and, as the answer states, drifted with the tide upon the rocks of Esopus island, whereby the cargo on board the Worden was lost. The cargo was abandoned to the libelants, who thereupon paid the consignees as for a totalloss,-$9,21l.75,-and, claiming to be subrogated to the rights of the consignees against the carrying vessels for the loss of the wheat, filed this libel to recover the sum of $6,175.89, the amount of the loss, after deducting the sum realized from the damaged cargo. The libel alleged that the stranding occulTed through the negligence of the respondents, which the answer denies. On the question of negligence no evidence was given upon the trial. On that point both sides rested upon the pleadings, each claiming that the burden of proof was upon the other. Without reference to the question of negligence, however, inasmuch as the carrier had given a clean bill of lading binding himself to a delivery of the goods without exception or qualification, the libelants claimed that upon payment to the consignees they were subrogated to the benefit of the consignees' right of action for the loss of the goods against the carrier, as the principal debtor, for the non-rlelivery of the cargo; also that, upon the admissions of the answer, it was incumbent on the carrier to show that the stranding was without any fault on his
part, if that is material.. The general principles of law invoked by the libelants ate ndt denied, either as regards an insurer's right to subrogation, upon payment of a total loss, to the rights of the assured against any other persons primarily liable for such loss; or as regards the presumptions of negligence. The only question is as to the applicability ofthese principles to the facts of the case. The contract of insurance, in this case, contains no express provision for any sUbrogation of the insurers to the rights of the assured on payment of the loss. In such cases, the right of subrogation, if any exists, being no part of the contract, does not depend upon the contract, or on the form of it; it is a mere equity to be worked out through the rights of the assured only, in his relation to other parties ·... If the assured has a legal right to indemnity for the loss against a Carrier that has no legal or equitable right to the benefit of the insurance, then the liability of the carrier to the assured is regarded as the primary liability for the loss, and the liability of the insurer as secondary,and similar to that of asurety only. The insurer, on payment, is therefore held, in such cases, to be eqU'itably entitled to stand in the shoes of the insured, and to recover such indemnity as the insured was entitled to recover against other persons having no right to the benefit of the insurance. Mobile a: M. Ry. Co. v. J.urey, 111 Dr S. 584; S. C. 4 Sup. Ct. Rep. 566; Hall v. Railroad Cos. 13 Wall. 367; Garrison v. Memphis Ins. Cos. 19 How. 312. In the case of Hall v. Railroad Cos., supra, the court say:
"In respect to the ownership· of the goods, and the risk incident thereto, the owner [the assured] and the insurer are considered but one person, hav. ing together the beneficial right to the indemnity due from the carrier for a breach of his contract, or for non-performance of his legal duty. Standing thus as the insurer does, practically, in the position of a surety, stipUlating that the goods shall not be lost or injured in consequence of the peril insured against, whenever he has indemnified the owner [the assured] for the loss, he is entitled to all the means of indemnity which the satisfied owner [the assured] held against the party primarily liable. His right rests upon famIliar principles of equity. It is the doctrine of subrogation, dependent not at all npon privity of contract, but worked out through the right of the creditor or owner rthe assured.] lIence it has often been ruled that an insurer who has paid a loss may use the name of the assured in an action to obtain redress from the carrier whose failure of duty caused the loss."
As the right of the libelants to subrogation can only be claimed through the rights of the assured, the questions chiefly litigated were -First, who were insured under the policy in this case? and, second, was the owner of these vessels equitably entitled to the benefit of the insuranoe, so as to cut off any right of subrogation that the insurers might otherwise have had against him? The faots are as follows:
The policy was issued in the name of Morse & Co.· whose business is variously described as that pf forwarders, carriers, transportation brokers, or, familiarly, scalpers. For convenience, I shall call them forwarders. They belong to a class of middle-men, long established in Buffalo, who handle all
lhe freight business there, as intermediaries between the boatmen and the owners of grain and produce, or their agents, who desire to ship it eastward. The forwarders see the consignors; agree upon the price of freight, which includes insurance; procure boats to take the grain upon the terms fixed: get a certificate of insurance and deliver it to the shipper along with the bill of lading, which they sign as well as the captain: pay prior charges, if any: make any advances necessary to the boatmen for the trip: and receive, for their services, from the boatman, a commission, usually 5 per cent. upon the amount of stipulated freight. The insurance companies that engage in this kind of insurance have provided a particular form of policy specially prepared for it. The shipper designates the company in·which the insurance shall be effected. The forwarder, at the beginning of each season, procures from the various companies what is termed an "open policy," which is attached to a "policy book," in which are entered the particUlars of each insurance under it. To effect a particular insurance, the policy and the policy book are taken to the office of the companies' agents, who enter in the policy book the particulars of the insurance as applied for, and thereupon issue and deliver to the forwarder a certificate stating that insurance is effected, under the policy, upon cargo on board the vessel, of the value designated, and on acconnt of the persons named; the loss, if any, payable to "the assured, or order, and return of this certificate." The certificate is thereupon indorsed in blank by the forwarder and delivered to the shipper, with the bill of lading, also signed by the forwarder, as above stated. The transaction in this case was in accordance with the general custom above described. The grain in question was in charge of Mr. Meadows, m; agent of the consignees in New York. Morse & Co. applied to him in negvtiating for its transportation, and agreed upon the rate of five cents per bushel. inclUding insurance, which the shipper directed to be taken in the libelants' company. Morse & Co. thereupon placed the transportation with Capt. Wager, the owner of the Sidney and the Worden, and the grain was loaded upon the latter. When the cargo was loaded, Morse & Co. obtained the captain's bill of lading, and, having previously procured a certificate of insurance, delivered it, indorsed by them in blank, to Mr. Meadows, along with the bill of lading, which Morse & Co. also signed, paying- him at the 1lme $200 for prior charges. The bill of lading recited Meadows as shipper on board the Worden, and provided for the delivery of the grain to the conf'gnees in New York, without any exception or qualification, on payment of freight and prior charges, which were to be paid to Brooks & Co., the New York agents of Morse & Co. The form of insurance was as follows: The "open policy" No. 772 stateS' that the libelants, "by this policy, on account of Morse & Co., for whom it may concern, do insure the several persons whose names are hereinafter indorsed thereon as owner, adllancer, or common carrier, on goods on his own boat, or boats belonging to others, from place to place, as indorsed hereon or in a book kept for that purpose, for the amounts, at the rate, and on the goods specified in said indorsement; no risk considered as insured until said indorsement is approved and signed." There are various provisions in reference to the lading and unlading, and the time allowed therefor. The risks assumed by the company are those of the seas, canals, rivers, and fire, and all other perils, losses, or misfortunes to the goods during said trip, "excepting perils, etc., from ice. jettison, theft, or from want of ordinary care and skill in lading or navigating said boats." 'rhere are numerous other provisions not material in this case. The certificate issued May 17th, on the application of Morse & Co., states that "Morse & Co. is insured under policy No. 772 in the sum of $9,875, in board, cargo of boat Wm. Worden, on wheat $9,875, at and from Buffalo to New York; loss, if any, payable to assured or order and return of this certificate."
The name of the consignees is not usually made known to the forwarder, and was not in this case known to him, until the grain was loaded. Upon the delivery of the bill of lading to the shipper. the name and direction of the consignee were written in the margIn. When Morse & Co. obtained the certificate of insurance, they did not know who was to be the consignee. The agents of the insurers in Buffalo, who insured the certificate, and made the entry in the policy book, were fully acquainted with the established customs and usages in this business. They knew that Morse & Co. were forwarders, doIng business in the manner above stated; they understood that the certificate of insurance applied for was designed to accompany a bill of lading of the goods in questIon; that Morse & Co. obtained the shipment of this cargo as agents of the captaIn; that they usually signed the bills of lading along with the captain; that they were accustomed to pay prior charges and to make advances to the captain; that the prIce of freight included insurance; and that Morse & Co were paid for their services by the carrier by a commission on the amount of freight.
and they as clearly acted, and were understood to q,ot, on account of the captain also. The insurance premium, though paid by Morse & Co., was charged as an advance against the captain and the freight. and was allowed as such by the captain before the loss; and the evidence was that they acted for the captain's benefit as well as for their own. It is well settled that a policy "for whom it may concern" in such a case inures to the benefit of all persons having an insurable interest that are intended to be benefited by it, whether known to the insurers or not, and that such persons may sue upon the policy in their own names. A recovery by one against the insurers, in such cases, inures to the benefit of all, and bars any subsequent action by the others. Hooper v. Robinson, 98 U. S. 528; Aldrich v. Equitabie Safety Ins. Co. 1 Woodb. & M. 272; Henshaw v. Mutual, etc., 2 BIatch£. 99; Fabbri v. Phmnix Ins. Co. 55 N. Y.129, 133; Walsh v. Washington, etc., 32 N. Y. 427, 439; 1 Am. Ins. 169, note; Waters v. Monarch Assur. Co. 5 E. & Bl. 870,871. The certificate of insurance issued in this case does not contain the words "on account of whom it may concern," or any equivalent words, but the names of Morse & Co. only. The necessary construction of the original policy with its conditions, is that, in oruer to make any particular transaction available under it, the names of the individuals on whose account any particular insurance under it is effected, must appear by indorsement on the policy, or by an entry made in the policy book. This condition of the policy is a perfectly lawful one, and, being clearly expressed, is controlling. In this case the name of Morse & Co. alone is entered in the policy book, without any additional words, as "for whom it may concern;" nor are they described as agents. '1'he certificate is in accordance with this entry, and is made payable to Morse & Co., or their order. There is no language in it that can be so extended as to include other persons. Upon the written contract, therefore, "the assured," in the language of the policy, are Morse & Co. only. In such a case parol evidence is not receivable to vary the written contract, or to enlarge the interests of the persons directly assured. Am. Ins. 169, note; v. Mercantile, etc., 67 Barb. 519. The indorsement of the certificate by Morse & Co. to the consignees, who were the owners of the cargo, effectually secured the latter. The consignees, in receiving payment of the loss from the insurers, received it, not as "the assured" under the policy, but as the indorsees of Morse & Co., pursuant to the terms of the contract, which provided for payment "to order." This was the mode agreed on and accepted for the security of all. It was a legal and effectual mode. In paying the consignees, the insurers paid them on account of Morse & Co., who were "the assured," pursuant to the indorsement; and hence the rights, if any, to which the insurers were subrogated upon this payment, were the rights of Morse & Co., and not the rights of the consignees, independently considered, against Capt. Wager and his vessels. In legal effect, the transaction is the
"same as respects the insurer!!' :rights of subrogation as if they had paid the whole loss to Morse & Co. as the "assured," and the latter had tbenpaid the owners in discharge of their liability to them. 2. The i'elation of Morse & Co. and Capt. Wager, as between themselves, was, as I have said, that of agent and principal. Morse & Co., by signing the bill of lading, had indeed made themselves liable as principals to the consignees; but, as between themselves, their liabilities were those of principal and' surety. The insurance effected by Morse & Co. was, as I have said, clearly shown by the evidence to have been intended as much for the benefit of Capt. Wager as for themselves. It was effected upon his request and authority, and the premiums paid by Morse & Co. were charged against the captain and freight. Capt. Wager was absolutely liable to Morse & Co. for this advance of premium, whether the freight or insurance money should ever be collected or not. The fact that these premiums, as part of the freight, were a lien upon the cargo and would be repaid to the captain or to Morse & Co. upon the delivery of the cargo to the owners, in case there were no loss of the cargo, is therefore immaterial as respects Capt. Wager's interest in the policy. The insurance company sufficiently understood all this, since it was in the usual course of business as fully understood by them. But the insurance did not cover any negligence of the carrier, because such negligence was expl'essly excepted by the terms of the policy. Under such circumstances there can be no question that Morse & Co., on recovering from the insurance company the whole amount of the loss, would hold the money for the discharge of the joint obligation of themselves and Capt. Wager to the consignee, and to that extent they would be regarded as trustees of Capt. Wager, as the principal obligor; and Capt. Wager, as principal, would have the right to compel that application of the insurance moneys. This would not in any way conflict with any of the terms of the policy, or of the certificate; and the relation of the parties, and the circumstances that gave Capt. Wager this right, could. therefore, be legally established by parol. The situation is, in substance, analogous to the situation of mortgagor and mortgagee, where the latter, at the request of the mortgagor, insures the mortgaged premises in his own name, and at the expense of the mortgagee, and the insurance is intended for the benefit of both. In auch cases, it haa been repeatedly held that the mortgagor is entitled to the benefit of the insurance, and to have the amount paid to the mortgagee by the insurers applied in reduction of the mortgage debt; and that the insurers, consequently, have no right of subrogation thereto. STORY, J., in Carpenter v. Provi.dence Ins. Co. 16 Pet. 502507; Holbrook v. American Ins. Co. 1 Curt. 193, 200; Kernochan v. New York Bowery, etc., 17 N. Y. 428; Waring v. Loder, 53 N. Y. 581,5H5; Cromwell v. Brooklyn Fire Ins. Co. 44 N. Y. 42, 47. But if the mortgagee insure his own interest, without any privity with the mortgagor, or if the insurance policy itself, in terms, provides for sub-
rogation to the mortgagee's rights upon payment of the loss, then the terms of the policy will prevail, and the mortgagor cannot have the benefit of the insurance, or compel the application of the payment to the reduction of his debt, and the insurers will be entitled to be subrogated to the mortgagee's rights against him. Springfield, etc., v. Allen,43 N. Y. 389; Excelsior., etc., v. Royal Ins. Co. 55 N. Y. 343, 359; Foster v. Van Reed, 70 N. Y. 19; Bank oj S. C. v. Bicknell, 1 Clif. 85, 91-93. In this case there is no provision for subrogation in the insurance contract; hence any right of subrogation here, as previously stated, is a mere equitable right depending upon the actual relation of the other parties to each other. It is, therefore, subordinate to the equitable rights existing between a principal and his agent who effects the insurance for the benefit of both, and upon the account, and at the primary charge, of the principal. It has been held that where the carrier expressly stipulates in the bill of lading that he shall have the benefit of any insurance effected upon the goods by the shipper, no subrogation against the carrier would arise in favor of the insurers upon their payment of a loss. Carstairsv. Mechanics' d; Traders' Ins. Co. 18 FED. REP.473; Rintoul v. New York Cent. d; H. R. R. Co. 21 Blatchf. 439; S. C. 17 FED. REP. 905. If such a stipulation is upheld when inserted in the bill of lading, it must be equally valid when clearly proved to exist by extrinsic evidence. This insurance having been obtained, in fact, for the benefit of Capt. Wager, as the principal carrier, and at his primary charge and request, as well as for the benefit of the agent, and also for the benefit of the consignees, through an indorsement of the certificate to them, and the insurers, in effect, knowing all the facts, Capt. Wager, as principal, has a superior equity to the application of the insurance moneys in discharge of his liability as carrier; and as this equity is incompatible with any subrogation to the rights of Morse & Co., as "the assured," against Capt. Wager or his vessel, no such subrogation can be allowed. The insurers' right being a mere equity to stand in place of Morse & Co., their right is subject to the same equities that affect Morse & Co. See Kernochan v. Bowery, 17 N. Y. 428; Benjamin v. Saratoga Mut., etc., 17 N. Y. 415, 420; Cromwell v. Brooklyn Fire Ina. 00. 44 N. Y.42, 47. As Capt. Wager, moreover, had the right to have the moneys paid by the insurers, whether it was paid to Morse & Co. or to their indorsees, applied in dischal'ge of his, Capt. Wager's, obligation as carrier, the payment by, the insurers operated in law as an extinguishment of Capt. Wager's liability; and hence no obligation of Capt. Wager to either Morse & Co., or to the owners, remained to which there could be any subrogation. 3. In what has been said above, reference has been had to a loss through causes covered by the policy. The policy, however, expressly excepts "want of ordinary care and. skill in lading or navigat-
ing said boats." If the loss in this case happened through the negligence of Capt. Wager or the carrying vessels, or from the want of ordinary care, then the loss was not covered by the policy, and no one was entitled to recover upon it against the insurers. For the loss by such negligence the consignees could have held both Morse & Co. and Capt. Wager, under the bill of-lading which both had signed; and Morse & Co., on paying the consignees, could have resorted 'to Capt. Wager and the carrying vessels for his indemnity, tbough he would have no valid claim upon the insurance company. If the case were one of doubt whether the loss happened by negligence or not, and the carrier were a stranger to the policy, having no equitable interest in the application of the insurance moneys, the insurers, instead of litigating their liability with the assured or their indorsees, might pay the owners of the cargo, as they did in this case, and take, as they did here, an abandonment of the goods, with an assignment of Jl,ll claims for damages to themselves, and then prosecute the carriers for indemnity. Excelsior, etc., v. Royal Ins. Co. 55 N. Y. 343, 352. It is not material to the carrier, according to the authorities, with whom he l,itigates the question of negligence; and the insurers, in settling and paying such doubtful claims, are not mere volunteers. The Monticello, 17 How. 152, 155; Insurance Co. v. The C. D., Jr., 1 Woods, 72; Sun Mutual Ins. Co. v. Mississippi Val. Transp. Co. 17 FED. REP. 919. But here the carrier, as I find upon the facts, is not a mere stranger to the insurance. He is equitably entitled to the benefits of the pol. icy; and hence entitled by an equity paramount to that of the insurers, and as against Morse & Co., or their indorsees, to havS' any moneys paid on account of the loss to either of them applied in discharge of his own obligation. Any VOluntary settlement made by the insurers with either, inures to his benefit as much as to theirs. A voluntary settlement and payment are in general binding, and cannot be ripped up and set aside except upon some of the special and recognized legal grounds therefor; such as duress, fraud, or mistake of fact. 2 Greenl. Ev. §§ 85, 120-123; Elliott v. Swartwout, 10 Pet. 137, 154; Nichols v. U. S. 7 Wall, 128. This rule applies not only to the immediate parties to the settlement, but in favor of others also that are in privity with them. The carrier here, being equitably entitled to the benefits of the policy, is clearly in privity with Morse & Co., the assured, and their indorsees. A settlement by the insurers with either inures directly to the benefit of all. It is as binding as respects all, as respects either; and it cannot be set aside, as against either, except upon some of the special grounds above referred to. Upon either of these grounds it might be set aside, doubtless, in an action against the carrier; but then only upon appropriate averments in the libel, and upon appropriate proof. And iu such a case the whole burden of proof is upon the libelants. "It is ,incumbent upon them,'.' say the court in the analogous case of
Hooper v. Rouinson, (98 U. S. 540,) "to establish everything necessary to entitle them to recover, and they have no right to throw upon the defendant any part of the burden that belonged to themselves." See, also, Transportation Co. v. Downer, 11 Wall. 129, 134. If the proofs had shown, therefore, that this loss occurred by such negligence as rendered the insurers not liable upon their policy, and that the insurers had settled with and paid the owners upon a clear mistake of the facts in regard to their liability, I 6hould hold that the libelants would be entitled to maintain an action against the carrier, under an appropriate libel for that purpose. But this is not a libel of that character. No mistake or misapprehension of any of the facts at the time of settlement and payment is alleged in the libel, or suggested in the proofs; and as to the alleged negligence, no evidence has been given by either party. The libel charges negligence; the answer denies it, and states that the stranding occurred under such circumstances as negative the charge. These averments of the answer must be taken as a whole. rfhe libelants having once paid the loss, as a loss covered by the policy, if they sought to recover back the amount paid in an action against a carrier equitably entitled to the benefit of the policy, on the ground that the loss was within one of the exceptions of the policy, and was paid under a mistake of fact, must sustain the entire burden of proof, and affirmatively show both their ignorance and mistake as to the facts, and that the loss was actually within the exceptions of the policy. The libelants are not in the situation of mere naked assignees of a cause of action for damages held by the consignees against the carrier; nor do they sue in that character. It has been said that insurance companies have no power to purchase and sue on such claims independent of any question of their own liability. Excelsior v. Royal Ins. Co. 55 N. Y. 343, 357. Here they sue as insurers, who have paid the loss as a loss covered by the policy; and they now claim subrogation, in consequence of such payment, to a claim against the carrier. If, for the reasons above stated, they might be allowed to reopen the settlement made upon a mistake of fact, and prove that the loss was one not really obligatory on them to pay, because caused by negligence, the action must be one appropriate to that purpose, and the burden of proof in all respects be sustained by them. Neither the form of action nor the proofs meet these requirements; and the libel must, in every point of view, therefore, be dismissed, with costs. v.23F,no.2-7
'(Circuit Court, S. D. New York. January 6,18811.)
CARRIERS BY WATER - SEAWOH'fHINESS - UHARTER-PARTY FltUlT .CARGO-VENTILATION-PnOXIMA'fE CAUSE OF INJURY. OVERLOADING
Where a vessel was chartered to take a specified cargo of fruit, after loading with other cargo, and the contract contained a clause that the hatches should be taken off, "whenever practicable, as usual, for the ventilation of green fruit," and the master ovcrloaded the ship, in consequence of which the hatches could not be removed, as usual, on the vovage, lwld: (1) that the charter-party obligated the ship to furnish the usual ventilation for a cargo of fruit, to the extent of which her ordinary facilities would permit, in view of the perils of the voyage; (2) that there Was a breach of this obligation by overloading the ship so that it was not practicable to open the hatches as usual; (3) that the charterer was entitled to rely upon the contract, and Was not precluded from recovering, because he had reason to apprehend when he delivered his cargo that the ship would be overloaded. REP. 380) in favor of libelant is affirmed. with costs.
2. SAME- DECREE AFFIUMED.· Upon examination of the evidence, the decree of the district court (18 FED.
In Admiralty. Goodrich, Deady rX Platt, for claimant and appellant. Wm. A. Walke1', for libelant aud appellee. Geo. A. Black, of counsel. WALLACE, J. The libel is filed to recover damages for the loss upon a cargo of oranges rece'ived by the steam-ship at Valencia, Spain, in January, 1881, to be transported to the city of New York. The Regulus sailed from Valencia, January 7th, and arrived ·in New York, February 9th, with the oranges rotten. The libel, after setting out the conditions of a charter-party executed between the libelant and the owners, avers that the steam-ship at the time she received the oranges was so stiff and deep in the water in consequence of cargo previously taken on that she was unseaworthy, unfit to encounter the weather of that season of the year, and rendered incapable of properly ventilating and caring for the cargo of fruit, and that the master and those navigating her failed to properly ventilate the same. The answer denies any lack of proper ventilation "so far as the circumstances of the voyage would permit;" alleges that the libelant well knew the quantity of cargo on board before the loading of his cargo; denies that the steam-ship was overloaded; denies all negligence; alleges that the damage to the fruit, if any, was occasioned solely by unusually stormy weather and heavy seas, whereby the voyage was protracted, and the usual ventilation became impracticable; and insists that the loss was within an exception in the bill of lading exempting the steam-Ship from liability. An issue is made by the pleadings respecting the proper stowage of the libelant's cargo; but the ship was stowed by the libelant's stevedores, was properly stowed, and upon
the concessions of counsel at the hearing this issue is to be deemed eliminated from the case. The proofs establish the following facts:
November 30, 1880, the Regulns then being in the Tyne, bound for Genoa, her owners entered into a charter-party at London with the libelant, conditioned. that, "after loading her mineral at Elba for owner's benefit," she should proceed to Valencia, and load 4,400 cases of oranges for the libelant. "not above what she could reasonably stow and carry, above her tackle, apparel, provisions, and furniture," and being so loaded should proceed to New York. It was also conditioned in the Charter-party that the hatches should be taken off "whenever practicable, as usual for ventilation of green fruit." .After leaving Genoa the ship proceeded to Elba and took on 1,243 tons of mineral ore, the master giving notice by telegram to the libelant, December 23d, that she would sail that night for Valencia. She arrived there, January 1st. In the mean time the libelant had directed his oranges to be packed, boxed, and brought in from the country ready for shipment. January 5th, a bill of lading was executed between the libelant and the master containing a clause exempting the owners from liability from loss from all accidents of navigation and from negligence or default of master, mariners, or others. 1Vhen she arrived at Valencia the steam-ship had on board 60 tons of coal, besides the 1,243 tons of are taken on at Elba. Her carrying capacity was 2,000 tons. The libelant, who had been a ship captain and was familiar with the contingencies of the voyage and the conditions of safety for his fruit, objected to the master that the ship was too deeply loaded, and suggested that with bad weather the hatches would have to be battened down, and the fruit could not be properly ventilated. The master dissented from this view, and the libelant delivered the oranges, 4,326 cases, weighing about 300 tons. A.fter the cargo had been delivered the libelant was informed that the ship would coal at Gibraltar. This had not been understood by him before; it was not contemplated by the terms of the bill of lading, and there was no uniform custom on the part of vessels coming from Eng-land to do so, although fruiterers generally on a voyage from the Mediterranean to New York were accustomed to coal there. The steam-ship left Valencia, Jannary 7th, and proceeded to Gibraltar where on the 10th she took on 300 tons of coal. On January 11th she left there for New York. When she left Gibraltar her draught of water aft was 19 feet 6 inches, and forward was 17 feet 4 inches, a mean draught of 18 feet 5 inches. She carried a Plimsoll mark, according to the provisions of English acts ot parliament, which is a disk aile foot ill diameter with a line drawn horizontally through the center, painted on the outside of the vessel amid-ship. The center line fixes the point beyond which according to the judgment of the owner the vessel is not to be loaded deeper. When she left Gibraltar her water or load line was about 10 inches below the center line of the PUmsoll mark, and she had 4 feet 4 inches of free-board. A.ccording to Lloyd's rules, however, the utmost mean draught of watel which she could have, consistently with safety to herself and any cargo, was 18 feet 5t inches, and a free-board amid-ship of not less than 4 feet 51 inches. Vessels carrying fruit customarily allow 8. free-board of a couple of feet more than the free-board for ordinary cargo in order that tbe hatches can be opened without danger from water to secure the necessary ventilation of the fruit and prevent it from heating. The coal taken on at Gibraltar increased her draught something over a foot, but when she left Valencia it is safe to assume she drew at least a foot more water than was customary. in view of the cargo she was to carry and the reasonable contingencies of the voyage The steam-ship was provided with the ordinary facilities for ventilation, and in addition with booby hatches such as are usually provided for the ventilation
of fruit cargoes, and which were constructed under the supervision of libelant at Valencia. These booby hatches were built at the after-part of the holds, Nos. 2 and 5, in which the oranges were stowed. After leaving Gibraltar the steam-ship met with unusually tempestuous weather and heavy seas, which.lasttld with occasional intermissions of a day or two at a time until she arrived at New York, February 9th. On January 12th one of the booby hatches was carried away by the seas, and on the 13th the other was carried away. After that the hatches were covered with tarpaulins, and were opened for ventilation from time to time, and wind-sails were used for that purpose; but owing to the heavy seas constantly shipped by the steamer the hatches were not kept open sufficiently for the proper ventilation of the oranges. The voyageof the ship was protracted 10 or 12 days beyond the usual time required by reason of the heavy gales and seas she encountered, and because in consequence of being so deeply laden she was obliged materially to decrease her speed. When the oranges were delivered on board they were in good condition for shipment, and with proper ventilation would have arrived in good condition notwithstanding the length of the voyage. When the ship left Gibraltar she was too deeply laden by two or three feet to carry her cargo of oranges with a due regard to necessary ventilation in case of encountering heavy seas. Her trim was gradually lightened as she consumed her coal, but when she arrived at New York her draught of water aft was 18 feet 10 inches. If she had had two more feet of free-board she would not have shipped such heavy seas, and it would have been practicable to open her hatches oftener and ventilate her fruit more efficiently than was done. Two other steam-ships, the Navigation and the Hossend Castle, left Gibraltar about the same time she did; the Navigation bound for Boston, and the Rossend Castle for New York. They encountered the same weather, substautially, as did the Hegulus, but were able etIiciently to ventilate their cargoes of oranges and deliver them in good order. The Navigation sailed from Gibraltar, January 10th, and arrived at Boston, February 1st. Her voyage was protracted about three days by the very exceptional weather she met with. Her booby hatches were carried away by the heavy seas. She carried a clear side of seven feet, and shipped a great deal of water during the passage; but, although a large part of the time she was unable to take off her hatches, she managed to keep the lee corners open for ventilation. Owing to the want of sufficient ventilation the libelant's oranges became heated upon the voyage and rotted, whereby he sustained a loss in the sum of $10,144.99, which sum represents the difference between the amount realized by the sale of the oranges at public auction in New York, January 10, 1881, and the amount he would have realized over the current prices at that time if the oranges had arrived in good condition. In considering the proofs, the question which has presented the most difficulty is the one of fact, whether, in view of the severe weather encountered by the steam-Ship, it would have been practicable, if she had not been to keep the hatches open sufficiently for the ventilation of the fruit. No doubt is entertained that, with the usual free-board, the steam-ship would not have shipped such heavy seas, rnd that hatches could have been opened more frequently than was practicahle when she was loaded down almost to the limit of her draught. But the weather was extraordinary, and the doubt is whether, with two feet more of free-board, she would not still have been under the necessity of keeping her hatches closed so much of the time as to preclude the necessary ventilation. It is incumbent upon the libel-
a.nt to show a.ffirmatively that the loss arose solely from the breach of the obligation of the charter-party; and he cannot prevail by raising a doubt upon this point. It does not help him that in such a case the evidence is almost wholly in the control of those in charge of the ship, and affords him a frail reliance in establishing fault on their part; but it is not unreasonable to hold that where it is shown that the ship disregarded the practice which experience had established, and which is therefore to be deemed essential to 80 discharge of her whole duty, that circumstance is prima facie sufficient to account for the result, and to shift upon the ship the burden of a satisfactoryexculpation. Certainly the proofs are not convincing that the hatches could not have been opened efficiently for ventilation if the ship had been in light trim and carried the usual free-board. The result that followed was just what experience indicated as likely to follow in case of heavy seas. The log of the first officer is well calculated to convey the impression that the vessel had to contend with tremendous seas throughout nearly the entire voyage; but an analysis of the testimony of the master and of the first officer; and a comparison between this log and the engineer's log materially modifies this impression. For instance, the log (.Tanuary 11th) has this entry: "Ship rolling hearily, and shipping quantities of water over all;" while the master, with the official log is his hand, says the first bad weather was on the 13th. The first officer also testifies that there was nothing extraordinary in the character of the wind or sea on the 11th. The fact that the Navigation encountered substantially the same perils with safety to her cargo, fortifies the theory that the loss is attributable to the fault of the ship rather than to the perils of the voyage. The cause of action being founded on the breach of the charterparty the remaining question is whether the hatches were "taken off whenever practicable, as usual for ventilation of green fruit." This covenant obligated the ship to furnish the usual ventilation necessary for such cargoes to the extent which her facilities would permit. The hatches were to be taken off whenever practicable, in view of the facilities of the ship as they existed at the time the charter-party was executed and the vicissitudes of the voyage. It was not contemplated by the charter-party that the ship should be at liberty to carry other cargo of a character to cripple the ordinary ventilating facilities of the ship. The hatches may have been taken off to the extent prac· ticable in view of the overloaded state of the ship' on her voyage and the weather she encountered; but they were not taken off "as usual" because the overloaded condition of the ship rendered this impossible. The ship could not perform her contract with the libelant because those in charge had put it out of her power to do so. If there was negligence on the part of those in charge in not removing the hatches as often as they should have been, the ship is not exonerated by the '9xception in the bill of lading. Conceding that the contract is to be
interpreted and effectuated according to the law of England, (Moore v.Barris, L. R. 1 App. Cas. 318-332; Woodley v. Michell, L. R. 11 Q. B. Div.51,) and that it was competent by the stipulation of the parties to exempt the ship from liability arising from the negligence of those in charge, yet that stipulation must give way to the expressed contract to take off the hatches whenever practicable. Both cannot stand together, and any doubtful question of construction should be resolved against the carrier. Hayn v. Gulliford, L. R. 3 C. P. Div. 410; L. R. 4 C. P, Div. 182; Taylor v. Liverpool, L. R. 9 Q. B. 549. It is insisted for the appellant that the libelant cannot recover be. cause he knew the ship was overloaded when he delivered his cargo to her. If his cause of action was one for negligence it would be. pertinent to inquire whether there was negligence on his part which contributed to the loss, and if so, whether the loss should fall upon him or be apportioned. There is no principle, however, which precludes one party from a recovery for the breach of an express contract because he had reason to suppose at the time the contract was made, or during the time it remains executory, that the other party could not perform. He has a right to rely upon the contract and to substitute the promise of the other party f01 his own fallibility of judgment. In reaching the conclusion that the decree of the district court was right, the theory that the delay in the voyage which was attributable in part to the overloading of the ship contributed to the spoiling of the fruit has not been adopted. Possibly with a shorter voyage the lack of proper ventilation might not have been so injurious to the fruit; but this would seem to be conjectural merely; and when the oranges were shipped they were unripe and ought to have kept 40 or 50 days with ordinary care. The testimony introduced for the first time UPOD this appeal haa not materially changed the case as made in the district court; and that which has been adduced to show that the oranges when shipped were unduly ripe is rejected as utterly unworthy of credit. A decree is ordered for the libelant for $10,144.99, with interest from January 10, 1881, with the costs of the district court, and of this appeal.
THE PILOT BOY.
(Distriot (Jourt, D. Maryland.
ExCURSION BOATS-CARRIERS OF PASSENGERS-DuTY TO PASBENGJIlRS.
The owners of excursion boats used for night excursions are bound to us!' proper precautions to guard against the natural mistakes of passen.lters while on board.
SAME-NEGLECT TO SUFFICIENTLY IJIGHT A STAIR-WAY.
Where there was an open door-way from which steep stairs descended to the hold, which was in such a location that it was likely to be mistaken by a passenger for the stairs which ascended to the upper deck, held, that the owners of the boat were guilty of negligence in not having it so effectually lighted as to warn a passenger making such a mistake as soon as he faced, and was about to step into the opening.
In Admiralty. A. Stirling Pennington, for libelant. II. V. D. Johns, for respondent. MORRIS, J. This is a libel in rem instituted by a passenger who received injuries from falling down a stair-wayan the steam-boat Pilot Boy while on an evening excursion from Baltimore to Keller's Pavilion, in June, 1884. There is some conflict of testimony with regard to whethel' or not the libelant was under the influence of drink at the time of the accident. I take it that even on such an excursion as this, and with a bar on board, the presumption still remains that the excursionist was sober, and, aided by that presumption, I think the weight of evidence is decidedly with the libelant. The account given by the libelant and his companion of what they had done during the afternoon and while on board is quite inconsistent with his having had enough drink to affect his conduct or his care for his own safety. I find the fact to be that the libelant was sober. On the Pilot Boy there is on the forward part of the main-deck a strncture, in the center of the ship, containing on one side a door-way and stairs leading up to the npper deck, and on the opposite side containing a door-way and stairs leading down to the hold. There is across the whole deck, and extending from each side of this structure to the port and starboard edges of the boat, a partition or bulkhead, with an entrance door on each side. Directly by the entrance door on the port side there is the door-way and stairs a?cending to the upper deck, and similarly placed, directly by the entrance door on the starboard side, there is the door-way and stairs descending into the hold. The account of the accident, given by the libelant, is that he was coming from the stern of the boat along the starboard alleyway, intending to go up again onto the upper deck, where he had before been sitting, and thinking that the stairs on both sides lead to the upper deck, he stepped into the starboard door-way, which was open, and the place being entirely dark, and not finding the ascending f1teps, he fell down to the bottom of the steep descending stairs,