Marcardier v. Chesapeake Ins. Co., 12 U.S. 39 (8 Cranch 39) (1814)

12 U.S. 39

8 Cranch 39

3 L.Ed. 481


Feb. 17, 1814

ERROR to the Circuit Court for the district of Maryland.

The facts of this case were thus stated by STORY, J. in delivering the opinion of the Court.

This is an action on a policy of insurance, underwritten by the Defendants, on the 29th of October, 1806, for $31,000, upon any kind of lawful goods on board the brig Betsey, whereof Alexander M'Dougal was then master, on a voyage at and from New York to Nantes. M'Dougal was the general owner of the brig, and, on the 1st day of October, 1806, by a charter-party of affreightment made with the Plaintiff, granted, and to freight let, to the Plaintiff, the said brig, excepting and reserving her cabin for the use of the master and mate and for accommodation of passengers, as therein mentioned, and so much room in the hold as might be necessary for the mariners, and storage of water, wood, provisions, and cables, for the voyage from New York to Nantes; and M'Dougal, by the same instrument covenanted to man, victual, and navigate the brig at his own charge during the voyage, and to receive on board any shipment of goods, not contraband, which the Plaintiff should tender at the side of the ship, or within reach of her tackles, at New York, and to stow and secure the same, and proceed therewith to Nantes, and there discharge the same. The passengers on board the brig were to be at the joint expense of the parties, and the passage money was to be equally divided between them. The other clauses in the charter party are not material to be stated, except that the Plaintiff covenanted to pay the stipulated freight and demurrage. The cargo, put on board by the Plaintiff, was of the invoice value of $29,889, of which $7,439 were in memorandum articles. The brig sailed on the voyage, under the command of M'Dougal, on the 9th of November, 1806, and during the voyage was compelled by stress of weather, and other accidents, to bear away for the West Indies, and arrived at the port of St. Johns, in Antigua, on the 22d day of December. There the master made application to the vice admiralty for a survey, &c. and such proceedings were had upon his application, that the cargo was landed, and by a decretal order of the Court, of the 31st of January, 1807, the same was ordered to be sold for the benefit of all concerned, reserving the question as to freight. Under this decree, the cargo was accordingly sold, and the sales completed before the 28th of March, 1807; and the nett proceeds of the whole of the Plaintiff's property amounted to $13,767. The nett proceeds of the memorandum articles, included in the same sum, were $6,863.30. The whole proceeds were paid over to an agent appointed by M'Dougal, and the freight for the whole voyage was allowed him by the admiralty, upon a report of commissioners, to whom the question was referred. The brig was repaired at Antigua, within a reasonable time, at the expense of one sixth only of her value, and capable of performing the voyage with the original cargo; but M'Dougal voluntarily abandoned the voyage at Antigua, for his own emolument and advantage. Of the cargo, 99 bags of coffee were spoilod and thrown overboard, and the residue greatly damaged by the perils of the seas; and the whole cargo, including the memorandum articles, sustained a damage, during the voyage, exceeding a moiety of its original value. On the 4th of Feb. 1807, and within a reasonable time after receiving information of the loss, the Plaintiff abandoned the whole cargo to the underwriters.

The declaration contained two counts, for a total loss; 1st. by the perils of the seas, and 2d, by barratry of the master. At the trial, the Court below, upon the facts and circumstances above stated, held that the Plaintiff was not entitled to recover, as for a total loss of the cargo insured, including the memorandum articles; and the cause came up to this Court, upon a bill of exceptions to that opinion.

HARPER, for the Plaintiff.

The great controversy between the parties in this case, turns on the question, whether the loss of the cargo now under consideration, was partial or total. It is contended, on the part of the Plaintiff, that it was a total loss.

1st. By the dangers of the seas.

2d. By the barratry of the master.

By the dangers of the seas——

1st. Because the voyage was broken up and lost by the deterioration of the cargo, to more than half of its value.

2d. Because there may be a total loss of memorandum articles, by the loss of the voyage; although the articles themselves remain in existence, and of some value.

By the barratry of the master——

1st. Because the acts imputed to him, amount to barratry, if he were in a situation to commit it.

2d. Because by the charter-party, the Plaintiff became owner pro hac vice, and M'Dougal merely master, so as to be in a situation to commit barratry.

The question to be first considered, may be stated as follows:

Whether, in case a cargo consists partly of memorandum articles, (on which no partial loss can be recovered,) a total loss is incurred by the breaking up of the voyage on account of such a deterioration of the whole cargo, (including a deterioration of the memorandum articles,) as reduces the value of the whole cargo more than one half.

We hold the affirmative of the question.

But there are two cases which have been considered as very strong in favor of the negative. These are,

1st. The case of Wilson & another v. Smith, 3. Burr. 1550, cited also in Marsh. (1st Am. ed.) 141. This was of a ship with a cargo of corn, which, having met with a storm, was obliged to run for the nearest port to refit, where she incurred a considerable expense in repairs. On her arrival at her port of destination, it was found that the corn was damaged to more than half its value. Lord Mansfield decided, that this loss, not being of the nature of a general average, nor arising from the the ship's being stranded, could not be recovered on the policy; for that the words of the memorandum, 'free from average, unless general, or the ship be stranded,' did not make a condition, but only an exception.

The answer to this case is, that the vessel had arrived at the place of destination; the voyage therefore was not broken up, and so no total loss could be claimed on the ground, that the cargo was deteriorated more than half its value.

2d. The other case, and that which is chiefly relied upon by the Defendants, is the case of Cocking v. Fraser—Marsh. (1st Am. ed.) 144.

Here the voyage was broken up; and it was decided by lord Mansfield, and the other justices who sat in the cause, one of whom was Mr. Justice Buller, that if the articles for which the insurer is warranted to be free from average, except general, specifically remain after the voyage, though by sea damage they are rendered of no value, yet, if the ship has not been stranded, this is only a partial loss, for which the insurer is not liable.

The authority of this case, it must be confessed, would go far to prevent the present Plaintiff from recovering as for a total loss, were it not for the observations made upon it by lord Kenyon, in the case of Burnett v. Kensington, 7. T. R. 210.—Also Marsh. (1st. Am. ed.) 151. The opinion of the Court in that case tends very much to invalidate its authority.

The principle of Cocking v. Fraser, is also overruled in the case of M'Andrews v. Vaughan, Marsh. (1st. Am. ed.) 150—and Park, 114, which goes to show that, where a cargo consists of memorandum articles, if the voyage be lost, the insured may recover as for a total loss, though the cargo be not wholly destroyed. And there is, in fact, the same reason that the breaking up of a voyage, in case of memorandum articles, should constitute a total loss, as where the cargo consists of articles not mentioned in the memorandum. The general doctrine now is, with regard to both descriptions of goods, that there may be a total loss by the breaking up of the voyage.

Dyson v. Rowcroft, 3. Bos. & Pul. 474, is another case against the principle laid down in Cocking v. Fraser. The opinion of the Court here, was, that it is a total loss of memorandum articles, although they may remain in specie, if they become so much damaged as to be no longer worth carrying to the port of destination.

The next question is, whether there was a total loss by the barratry of the master; and this must be decided by ascertaining who was the owner of the vassel for the voyage; for it is agreed on all hands, that if the master was in a situation to commit barratry, he was actually guilty of that offence.

A person may be owner for the voyage, who is not the general owner of the ship; and barratry may be committed against such person by, the master, although the barratrous act of the master may have been done with the consent of the actual general owner. Cowp. 143, Vallego v. Wheeler. See 143, Vallejo v. Wheeler. See (1st. Am. ed.) 454.

In the case now before the Court, Marcardier, the Plaintiff, was owner of the vessel pro hac vice, although M'Dougal, the master, was the general owner. We contend therefore, that, according to the principles land down in the case last cited, the master was in a situation to commit barratry against the Plaintiff that he has actually done so—and therefore that the Plaintiff is intitled to recover as for a total loss.

PINKNEY, contra.

It has been contended for the Plaintiff, that there may be a total loss by the breaking up of a voyage, if the goods on board be deteriorated more than half. No English authority, to this effect, is recollected. The Courts in New York have so decided, it is true; but the principle may be considered as arbitrary, and the decision as local.

According to MARSHALL, (Eng. ed.) vol 2, p. 486, if the goods insured specifically remain, and are actually landed at the port of delivery, however damaged in the voyage, the injury will amount but to a partial loss. Why, then, should the insured have a right to abandon as for a total loss at an intermediate port, if the goods can be carried, in the same or another ship, to the place of destination? All the authorities in favor of the right to abandon at an intermediate port, are cases where the voyage was broken up by the incapacity of the ship to perform it. But in the present case, there was no such incapacity. The vessel was repaired at Antigua within a reasonable time, at the expense of one sixth of her value, and was capable of performing the voyage, with a considerable part (at least one third) of the original cargo. The case therefore, is materially different from those cited on the part of the Plaintiff. Vid. Park's observations in the cases of Cocking v. Fraser, & Dyson v. Rowcroft, 1. Park. (6th Lon. ed.) 152. Also 2. Marsh. (Eng. ed.) 586, Manning v. Newnham.

It is the opinion of the best judges in cases of this nature, that the law of abandonment has already been carried far enough; but the counsel for the Plaintiff would carry it to an extent hitherto unprecedented.

With regard to memorandum articles, all the authorities go to show that there must be an actual total loss, in order to justify an abandonment. A technical total loss, is not sufficient. The underwriters are not liable for mere deterioration, however great, of such articles: They refuse to have any thing to do with it, on account of the difficulty of knowing the real cause of such deterioration. 1. Marsh. (Eng. ed.) 227, note to the case of Cocking v. Fraser. As to memorandum articles, also, the intermediate port makes no difference.

In the case of Dyson v. Rowcroft, 3. Bos. & Pul. 474, there was an actual total loss. The Court, in that case, do not mean to say that memorandum articles may be subject to a technical total loss.

The alleged barratry is next to be considered. The question arising on this point is, as has been already stated, whether the master, under the circumstances of the case, could commit barratry. If he could, the facts seem to show that he was guilty of the offence. But we contend that the master was, in fact, the owner of the vessel for the voyage, as well as general owner, and therefore, since barratry is a fraud against the owner, he could not be guilty of that offence, insomuch as a man cannot commit a fraud against himself. The charter-party, in this case, is of a peculiar construction; it sounds in covenant throughout; it is clearly not an assignment of the property to the Plaintiff, pro hac vice. The master finds the crew, pays them, provides for them, and has the whole management of the vessel: He must, therefore, be considered as owner for the voyage. In Vallejo v. Wheeler, the charter-party is not set forth, but it is stated in the case that the freighter employed the master and crew, and paid the crew. The Court said it would be different if it were not a general freighting. Here the Plaintiff was not a general frieghter. Loft, who also reports the case of Vallejo v. Wheeler, (Loft, 641) says, that where the master employs and pays the crew, &c. the charter-party seems to be rather a covenant, and does not make the frieghter owner for the voyage. 1.Johnson, 229, M'Intire v. Bowne. 8. Johnson 272, Hallet v. The Columbian Insurance Company. 1. Cranch, 214, Hooe & Co. v. Groverman.

HARPER, in reply.

The question as to barratry is, who had the beneficial interest in the vessel during the voyage. There can be no doubt that the beneficial interest was in the Plaintiff. It is of no importance, as it regards the ownership of the vessel, by whom the crew was furnished, provided for, &c. The freighting of a vessel where the crew and other necessaries for the voyage are provided by the general owner, is merely like hiring a house ready furnished, instead of hiring it empty, where the temporary ownership is no less in the hirer, in the former case, than in the latter.

Thursday, Feb. 17. Absent. WASHINGTON, J.

STORY, J. delivered the opinion of the Court as follows:

The Plaintiff in this case contends, that there was a total loss, which authorized an abandonment by both of the perils stated in the declaration viz.

1st. By the perils of the seas, and

2d. By barratry of the master.

And first, as to a total loss by the perils of the seas It seems now clear that a technical total loss may arise from the mere deterioration of a cargo by any of the perils insured against, if the deterioration be ascertained at an intermediate port, of necessity, short of the port of destination. In such case, although the ship be in a capacity to perform the voyage, yet if the voyage be not worth pursuing, or the thing insured be so damaged and spoiled as to be of little or no value, the insured has a right to abandon the projected adventure, and throw upon the underwriter the unprofitable and disastrous subject of insurance. It has therefore been held, that if a cargo be damaged in the course of the voyage, and it appear that what has been saved is less in value than the amount of the freight, it is a clear case of a total loss. It does not, however, appear that the exact quantum of damage which shall authorize an abandonment as for a total loss, has ever become the direct subject of adjudication in the English Courts. The celebrated treatise Le Guidon, ch. 7, art. 1, considers that a damage exceeding the moiety of the value of the thing insured, is sufficient to authorize an abandonment. This rule has received some countenance from more recent elementary writers; and, from its public convenience and certainty, has been adopted as the governing principle in some of the most respectable commercial states in the union; and perhaps is now so generally established as not easily to be shaken. 1, John. c. 141. 1, John. R. 335, 406. Marsh. Ins. 562. Note 92, Am. Endit. 1810. Park, 194, 6 edition.

But this rule has never been deemed to extend to a cargo consisting wholly of memorandum articles. The legal effect of the memorandum is to protect the underwriter from all partial losses; and if a loss by deterioration, exceeding a moiety in value, would authorize an abandonment, the great object of the stipulation would be completely evaded. It seems, therefore, to be the settled doctrine that nothing short of a total extinction, either physical or in value, of memorandum articles at an intermediate port, would entitle the insured to turn the case into a total loss, where the voyage is capable of being performed. And perhaps, even as to an extinction in value, where the commodity specifically remains, it may yet be deemed not quite settled whether. under the like circumstances, it would authorize an abandonment for a total loss. Dyson v. Rowcroft, 3, Bos. and Pull. 474. Maggrath v. Church, 1, Caines R. 212. Cocking v. Frazer, Marshall, 227. Park, 152, 6th edition.

The case before the Court is of a mixed character. It embraces articles of both descriptions; some within and others without the purview of the memorandum. If, in such a case, a deterioration exceeding a moiety in value, be a proper case of technical total loss, it will follow that, in many cases, the underwriter will, indirectly, be rendered responsible for partial losses on the memorandum articles. Suppose, in such a case, the damage of the memorandum articles were 40 per cent. and to the other articles 10 per cent. in the whole amounting to half the value of the cargo, the underwriter would be responsible for a technical total loss, and thereby made to bear the whole damage, from which the memorandum meant to exempt him. Indeed cases might arise in which the damage might exclusively fall on memorandum articles; and if it exceeded the moiety, in value, of the whole cargo, might load him with the burthen of a partial loss, in manifest contravention of the intention of the parties. A construction which leads to such a consequence cannot be admitted unless it be unavoidable. And we are entirely satisfied that such a construction ought not to prevail. The underwriter is, in all cases of deterioration, entitled to an exemption from partial losses on the memorandum articles; and in order to effectuate this right, it is necessary, where a technical total loss is sought to be maintained upon the mere ground of deterioration of the cargo, at an intermediate port, to a moiety of its value, to exclude from that estimate all deterioration of the memorandum articles. Upon this principle, on a cargo of a mixed character, no abandonment for mere deterioration in value during the voyage, can be valid, unless the damage on the non-memorandum articles exceed a moiety of the value of the whole cargo including the memorandum articles. The case is considered, as to the underwriter, the same as though the memorandum articles should exist in their original sound state. In this way, full effect is given to the contract of the parties. The underwriter is never made responsible for partial losses on memorandum articles, however great; and the technical total losses for which alone he can be liable, are such as stand unaffected by the perishable nature of the commodity which he insures.

In the present case, the facts alleged by the Plaintiff do not show a depreciation of a moiety in value, excluding the memorandum articles. There is no evidence of the quantum of depreciation of any part of the cargo. The forced sales at Antigua could not, under the circumstances, constitute a medium by which to ascertain it. Admitting, therefore, the rule to be correct, that the party had a right to abandon where the depreciation exceeds a moiety of the value, the Plaintiff has not brought himself within that rule as applied to a cargo of a mixed character like the present. The Court below were right, therefore, in deciding that there was no total loss proved by the perils of the seas.

The next question is, whether there was a total loss by the barratry of the master. And this depends exclusively upon the consideration, who was owner of the brig for the voyage; for it is conceded, on all sides, that the conduct of the master was barratrous, if he was in a situation to commit that offence. Barratry is an act committed by the master or mariners of a ship, for some unlawful or fraudulent purpose, contrary to their duty to their owners, whereby the latter sustain an injury. It follows, therefore, from the very terms of the definition, that it cannot be committed by a master who is owner for the voyage; because he cannot commit a fraud against himself. But it may be committed against a person who is owner for the voyage, although he may not be the general owner of the ship. A person may be owner for the voyage, who, by a contract with the general owner, hires the ship for the voyage, and has the exclusive possession, command and navigation of the ship. Such is understood to have been the case of Vallejo v. Wheeler, Cowp. 143. But where the general owner retains the possession, command and navigation of the ship, and contracts to carry a cargo on freight for the voyage, the charter party is considered as a mere affreightment sounding in covenant, and the freighter is not clothed with the character or legal responsibility of ownership; such was the case of Hooe & Co. v. Groverman in this Court, 1 Cr. 214. In the first case, the general freighter is responsible for the conduct of the master and mariners during the voyage; in the latter case, the responsibility rests on the general owner. On examining the charter-party in the present case, there can be no doubt, from the terms and stipulations, that it falls within the latter class of cases. The master, who was the general owner, retained the exclusive possession, command and management of the vessel, and she was navigated at his expense during the voyage. The whole charter party, except the introductory clause, sounds merely in covenant. The ownership was not divested by the covenant of affreightment, and, consequently, the master was incapable of committing barratry. There was, then, no total loss on the second count in the declaration.

The opinion of the Circuit Court on this exception must be sustained. But there are other exceptions on the record, in which it is admitted by the parties that the Circuit Court erred. The points intended to be raised in these exceptions have, in effect, being decided by this Court in Caze and Richaud v. the Baltimore Insurance Company, at Feb. term, 1813. For the errors in these exceptions the judgment must be reversed, with directions to the Circuit Court to award a venire facias de novo.

Last modified: October 4, 2009