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THE PATAPSCO INSURANCE COMPANY, PLAINTIFFS IN ERROR v. JOHN COULTER

January 1, 1830

THE PATAPSCO INSURANCE COMPANY, PLAINTIFFS IN ERROR
v.
JOHN COULTER, DEFENDANT IN ERROR.



ERROR to the circuit court of the district of Maryland. This action was instituted in the circuit court on a policy of insurance, executed by the plaintiffs in error, on profits upon goods on board the ship Nancy, 'at and from Philadelphia to Gibraltar and a port in the Mediterranean, not higher up than Marseilles, and at and from thence to Sonsonate, in the province of Guatemala, Pacific ocean, with the liberty of Guayaquil: beginning the adventure upon the said goods, from the loading thereof on board the said vessel at Philadelphia, and continuing the same until the said goods shall be safely landed at the ports aforesaid.' The insurance was in the amount of five thousand dollars, with this clause: 'this insurance is declared to be on profits, warranted to be American property, to be proved at Philadelphia only, valued at twenty thousand dollars.' The vessel, with a cargo of flour, proceeded from Philadelphia to Gibraltar, at which place the cargo was destined to be sold, and the proceeds to be invested at Marseilles in the purchase of various specified dry goods. These dry goods were to be sent by the vessel from Marseilles to Sonsonate or Guayaquil. While the vessel lay at Gibraltar, before the discharge of her cargo, she and her cargo were totally lost by fire. Evidence was taken at Philadelphia, as to the circumstances of the destruction of the property, and one witness (Mr Fulford) was examined in addition as to those circumstances at the trial. The testimony of this witness went to show that with proper diligence on the part of the captain and crew, the fire might have been extinguished and the vessel and cargo saved; and the evidence obtained at Philadelphia was not inconsistent with that conclusion. It appeared from Mr Fulford's testimony, that, soon after the fire commenced, the captain called upon the crew to leave the ship, exclaiming that there was gunpowder aboard, and that the vessel would be blown up; and the captain and crew did then leave the vessel. It was in evidence that there was a small quantity of gunpowder on board, but that that ought not to have deterred exertions to save the property; an officer and a number of men from two British frigates having in fact, a considerable time after the vessel was deserted by her captain and crew, boarded her and used all efforts to put out the flames, but unsuccessfully, in consequence of their reaching the scene so late. There was evidence to infer that the fire originated from the carelessness of the captain with a candle used by him for sealing letters, or from negligence of the crew. Evidence was had at Philadelphia, of Mr Clark, concerning the markets at Sonsonate and Guayaquil, for the specified articles at Marseilles. His testimony tended to show that these articles would have been sold with profit at Guayaquil, at the time the vessel might have reached there. It was proved, that at Gibraltar the flour would have sold without loss, but without profit. The defendants prayed the court to direct the jury, 1. That if they should believe from the evidence, that the fire, which occasioned the destruction of the ship and her cargo, proceeded from the carelessness or negligence of the captain of the ship, or any of her crew, the plaintiff was not entitled to recover. 2. That if they should believe that the fire which occasioned the ship's destruction originated from accident, and without any want of due care and attention on the part of the captain or crew, and if they should further find that the captain and crew, after the discovery of the fire, might, by reasonable and proper exertions, have prevented the spreading of the same, and have preserved the said vessel and cargo from destruction, and that they omitted to use said exertions, then the plaintiff was not entitled to recover. 3. That the plaintiffs had offered no evidence that the sales of the flour at Gibraltar would have yielded the plaintiff a profit, and that therefore they were not entitled to recover. These prayers the court refused; but as to the second of them directed the jury as follows: 'that the plaintiff is entitled to recover, unless they should be of opinion, from the evidence in the cause, that after the vessel was discovered to be on fire, the master and crew might have extinguished the same, and preserved the vessel and cargo. The master was bound to extinguish the fire, if practicable. If he stood aloof, without making any exertion to extinguish the fire, and suffered the vessel to be destroyed, it would have afforded evidence of such gross negligence as to amount to barratry.' To the refusal of the prayers, and opinion and direction of the court, the defendants, now plaintiffs in error, excepted. Mr Mayer, for the plaintiffs in error, contended. 1. That they are not answerable, under the policy, for any loss by fire, if occasioned by the negligence of the captain and crew of the Nancy; that the risk of fire bears on the insurers as other risks in the policy; that the assured being bound to the exercise of reasonable skill and care in his agents to guard the property insured against the perils stated in the policy, under the implied warranty of seaworthiness, the underwriters ought not to suffer loss from a fire which the captain or crew might with ordinary care have prevented taking place. 2. That if it was the duty of the captain and crew to prevent the fire, it was equally their duty to extinguish it; and the consequences of their negligence in this particular ought not to fall upon the insurers; and that even the gross negligence of the captain and crew, in regard to a duty of this kind, is a mere nonfeazance, and is not to be considered barratry; that the remissness of the captain, in this case particularly, is not so to be considered, because, however weak his conduct may have been, he was acted upon by inordinate fears only, and by no motives of interest or any views of unauthorised discretion or wilful delinquency. 3. That the profits here insured were incident to the cargo shipped at Philadelphia, and not to any property that might be substituted for it, though acquired with the proceeds of the original cargo; that the contemplated adventure from Marseilles to Guatimala was therefore foreign to the insurance. That even in a valued policy on profits, evidence must be given of some profit likely to result, and that without such evidence the insurance has no subject to operate upon; that the flour being destined to be sold at Gibraltar, and not affording there a profit, as was proved, there is in effect no insurable interest whatsoever shown in the defendant Coulter; and that he cannot, therefore, recover under a valued policy on profits. Underwriters are not liable for any loss arising from gross negligence or want of skill of the captain and crew. The object of insurance is to guard against extraordinary perils. They necessarily beset every mercantile adventurer, and there must be skill and diligence to meet them. It is a part of the business of the voyage that those who are on board of the vessel shall be on the alert, and if they are not, the underwriters are exonerated. Marsh. on Ins. 156, 487, 690. 5 Mass. 1. The opinion of the court was delivered by: Mr Justice Johnson delivered the opinion of the Court:

This was a case of insurance on profits on a voyage from Philadelphia to Gibraltar, and a port in the Mediterranean not higher up than Marseilles, and at and from thence to Sonsonate, in the province of Guatemala, Pacific Ocean, with the liberty of Guayaquil. The risks are those usually inserted in policies, including fire, and barratry. The loss alleged is from fire alone.

The vessel reached Gibraltar in safety, and while lying there, took fire and was entirely consumed, together with her cargo.

The evidence on the part of defendants below went, first, to charge the master with having caused the fire by his own carelessness; secondly, with having desisted, and restrained the crew and others from efforts which might have extinguished the fire, under apprehensions not very well founded, that it would communicate with powder, laden near to where the fire originated. It was also objected to the plaintiff's right of recovery, that he had given to kind of evidence of profits, or probable profits, from a sale at Gibraltar.

This difference furnishes the subject of three bills of exception. The first of which went to the refusal of the court to instruct the jury, that if they believed the fire proceeded from the negligence or carelessness of the caption, the plaintiff below was not entitled to recover.

The second, that if they believed the fire originated in accident, without any want of due care and attention in the caption and crew, yet, if after it had commenced, the captain and crew might with ordinary care and exertion have extinguished it, the plaintiff below was not entitled to recover.

The first of these instructions was refused expressly. The second was refused as prayed; and in its stead the court instructed the jury, that the plaintiff was entitled to recover, unless they should be of opinion from the evidence, that after the vessel was discovered to be on fire, the master and crew might have extinguished it, and preserved the vessel and cargo. That the master was bound to extinguish the fire, if practicable; and if he stood aloof without making any exertion to extinguish it, and suffered the vessel to be destroyed, it would have afforded evidence of such gross negligence as would amount to barratry.

As the plaintiff below is in possession of the verdict, it is immaterial to him if this charge was more favourable to his adversary than the law admits. We have only to do with so much of the case presented by these bills of exception, as makes against the interest of the insurers.

And as to the refusal to instruct the jury that 'their verdict must be for the insurers, if they believe the loss to have proceeded from the carelessness or negligence of the captain,' it is obvious, since barratry is insured against, that the court must not be held to have affirmed that fire proceeding from negligence was a loss within the policy, independently of the risk of barratry, but that negligence was no defence where barratry was insured against.

It cannot be denied, that what with adjudged cases and elementary opinions, this doctrine has got into a great deal of confusion. Many attempts have been made to define the term barratry, in its marine sense; but when compared with the ideas attached to the word, as derived from the most respectable sources, such definitions will too generally be found deficient in precision or comprehensiveness; they need commentaries to apply or explain them. And it is remarkable, that the point in which all the definitions in the English or American authorities agree; to wit, that fraud must be a constituent of the act of barratry; is that in which practically all the difficulties arise. The question seems to be between 'dolus' and 'culpa,' which of those two words best conveys the sense of the law.

It cannot be denied that the etymology of the word favours the adoption of the former. The term barratry is known to the common law; and Cowel's Interpreter refers its origin to a Latin word, which would attach to it the idea of meanness, selfishness, and knavery. Some of our English books, following a French writer, (Pasquier sur Emerigon,) derive it from 'barat,' an old Franch or Italian word, which they explain by 'tromperie, fourbe, mensonge.'

I should myself derive the word from the Spanish barateria, baratero, which are rendered fraus, and fraudulentus. But it is worthy of particular notice, that writers on maritime law of the first respectability (I think Emerigon, gives six in number) in explaining the marine sense of the word barratry, use the French word 'prevariquez,' which can only be translated into 'acting without due fidelity to their owners.' The best French dictionary we have renders it by 'agir contre les devoirs de son charge,' acting contrary to the duties of his undertaking, and 'trahir la cause ou l'interet des personnes qu'on est oblig e de defendre,' to betray the cause or interest of those whom we are bound to protect.

Nor will it be found that the idea of the British courts of the meaning of fraud as applied to barratry varies perceptibly from this exposition. In the case of Moss vs. Byron, 6 T. R. 379, we find the very words adopted by one of the judges; 'if the captain acted contrary to his duty to his owners,' it was barratry; and 'if he did any act to increase the risk,' it was barratry. And in the case of Burk vs. The Royal Exchange Insurance Company, the court lay it down as the law, that the term barratry is used in the policies as applicable to the 'wilful misconduct' of the master and mariners. And even in the case of Phyn vs. The Royal Insurance Company, in which Laurence, Justice, wishes to resume or explain his definition in Moss vs. Byron, he concludes with adopting the definition of Lee, C. J. in Stemmer vs. Brown, in which he says, 'barratry must be some breach of trust in the master ex maleficio,' in which, I presume, maleficium must mean some wilful and injurious act. And as this case is given by the latest English compiler (11 Petersdorf, 269, Case 6) as the authority for the unqualified doctrine 'that there must be fraud to constitute barratry, and the definition of C. J. Lee, just quoted, is given in his margin, as comprising the substance of this case, we are furnished with an apt opportunity of ascertaining the idea attached in Great Britain to both the terms 'fraud' and maleficium, by referring to the case itself.

The defence of the underwriters there turned upon a deviation, and the question was whether it was a fraudulent deviation. If a general deviation, the underwriters were discharged; but if a fraudulent deviation, then it was barratry and a risk in the policy. The whole evidence in the cause in which the question of fraud was raised, was this: the vessel was bound from London to Jamaica, but was driven by currents out of her course. Upon recovering her reckoning, she was found to be between the Grand Canaries and the Island of Teneriffe. In this situation it was admitted that her course was south west, instead of which the captain bore up for the island of Santa Cruz, which lay north west, and in sight about thirty miles off, and came to anchor; for the purpose, as is supposed in the argument, to get refreshments, or in some way for his own accommodation. The jury found it to be a simple deviation without fraud, and the court only decide that they cannot adjudge it a fraudulent deviation in opposition to the finding of the jury. But it is no where hinted that the jury might not have found it otherwise, and their verdict have been sustained upon the evidence in that cause.

On the contrary, so far as fraud or maleficium may be supposed to imply a dishonest or injurious intention towards the owner, the idea is negatived by a variety of cases. In that of Earle vs. Rowcroft, 8 East, 126, it was admitted that the captain unaffectedly acted with a view to promote the owners' interest, and would materially have promoted their interest had he escaped detection. But he had deviated from his instructions, and increased the risk by trading with an enemy; and it was held to be barratry. The court there say, it has been asked how is this act of the captain in going into d'Elmina, in order to purchase the cargo for his owners more cheaply and expeditiously, a breach of trust as between him and them? Now I conceive that the trust reposed in a captain of a vessel obliges him to obey the written ...


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