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MCLANAHAN V. UNIVERSAL INSURANCE COMPANY, 26 U. S. 170 (1828)
U.S. Supreme Court
McLanahan v. Universal Insurance Company, 26 U.S. 1 Pet. 170 170 (1828)
McLanahan v. Universal Insurance Company
26 U.S. (1 Pet.) 170
Insurance. It is doubtless within the province of a court, in the exercise of its discretion, to sum up the facts in the case to the jury and submit them with the inferences of law deducible therefrom to the free judgment of the jury. But care must be taken in all such cases to separate the law from the facts and to leave the latter in unequivocal terms to the jury as their true and peculiar province.
An application for a new trial on motion after verdict addresses itself to the sound discretion of the court, and if, upon the whole case, the verdict is substantially right, no new trial will be granted, although there may have been some mistakes committed on the trial. The application is not a matter of absolute right, but rests in the judgment of the court, and is to be granted only in furtherance of justice. On a writ of error bringing the proceedings on the trial by bill of exceptions to the cognizance of the appellate court, the directions of the court below must then stand or fall upon their own intrinsic propriety as matters of law.
Every ship must, at the commencement of the voyage insured, possess all the qualities of seaworthiness and be navigated by a competent master and crew.
Seaworthiness in port, or lying in the offing, may be one thing, and seaworthiness for a whole voyage quite another.
A policy on a ship "at and from a port" will attach although the ship be at the time undergoing extensive repairs in port so as, in a general sense, for the purposes of the whole voyage, to be utterly unseaworthy.
What is a competent crew for the voyage -- at what time such crew should be onboard -- what is proper pilot ground -- what is the course and usage of trade, in relation to the master and crew being on board when the ship breaks ground for the voyage -- are questions of fact dependent upon nautical testimony and exclusively within the province of the jury.
The contract of insurance is one of mutual good faith, and the principles which govern it are those of an enlightened moral policy. The underwriter must be presumed to act upon the belief that the party procuring insurance is not at the time in possession of any fact material to the risk which he does not disclose, and that no known loss had occurred which by reasonable diligence might have been communicated to him.
If a party, knowing that his agent is about to procure insurance for him, withholds information for the purposes of misleading the underwriter, it is a fraud and vitiates the insurance.
Where a party orders insurance and afterwards receives intelligence material to the risk or has knowledge of a loss, he ought to communicate it to the agent by due and reasonable diligence, to be judged under all the circumstances of each particular case, if it can be communicated, for the purpose of countermanding the order or laying the circumstances before the underwriter.
What constitutes due and reasonable diligence is a question of fact for the jury.
The accidental concealment of the time of the sailing of a vessel would not prejudice the insurance unless material to the risk; if fraudulently intended, it might not mislead, and whether fraudulent or not is matter of fact for the jury.
The material ingredients of a question of the importance of concealing the time of a vessel's sailing are mixed up of nautical skill, information, and experience, and are in no sense judicially cognizance as matters of law. It seems that this question does not cease to be a question of fact when the vessel is to sail from a port abroad.
Little stress ought to be laid upon general expressions falling from judges in the course of trials. Where the facts are not disputed, the judge often suggests in a strong and pointed manner his opinion as to their materiality and importance, and his leading opinion of the conclusion to which the facts ought to conduct the jury. This ought not to be deemed an intentional withdrawal of the facts or the inferences deducible therefrom from the cognizance of the jury, but rather as an expression of opinion addressed to the discretion of counsel, whether it would be worthwhile to proceed further in the cause. And the like expression in summing up any cause to the jury must be understood by them merely as a strong exposition of the facts, not designed to overrule their verdict, but to assist them in forming it. And there is the less objection to this course in the English practice because, if the summing up has had an undue influence, the mistake is put right by a new trial upon an application to the discretion of the whole court. This is so familiarly known that it needs only be stated to be at once admitted.
The question of materiality of the time of the sailing of the ship to the risk is a question for the jury under the direction of the court, as in other cases. The court may aid the judgment of the jury by an exposition of the nature, bearing, and pressure of the facts, but it has no right to supersede the exercise of that judgment, and to direction absolute verdict as upon contested matter of fact, resolving itself into a mere point of law.
The action, in the Circuit Court for the District of Maryland, was instituted by the plaintiffs in error on a policy of insurance in the usual form, and a verdict was rendered for the defendants, under the opinion of the court, upon the first of nine exceptions taken by the plaintiffs.
The material facts in the case were:
Insurance was effected in Baltimore in the name of Thomas Tenant, to the amount of $10,000, on the brig Creole for a voyage from Havre de Grace to New Orleans, with liberty to touch and trade at Havana. The policy was dated upon 22 December, 1823. The insurance was made for the plaintiffs, the sole owners of the vessel, under the following circumstances:
John Joseph Coiron, one of the plaintiffs, while at Havre de Grace, on 19 October, 1823, addressed to Mr. John Stoney of Charleston, the following letter:
"Havre, October 19, 1823"
"Mr. John Stoney, Charleston:"
"DEAR SIR: Please to have in red, for my account, for the
account and risk of whom it may concern, $10,000 on the brig Creole, of New Orleans, Captain Jacob Goodrich, for New Orleans, touching at the Havana. The brig and boats in the best order, having a roundhouse on deck, containing fourteen births; the crew are seventeen in all. We intend sailing tomorrow. I have with me my family, consisting of two children and two nephews. The wind having shipped round suddenly, I write this in haste; my first will be more satisfactory to you, for particulars. The new Georgia upland cotton, twenty sous; rice, thirty francs."
"Your devoted servant and friend,"
"JOHN JOSEPH COIRON"
And also another letter, as follows:
"Havre, October 20 1823"
"Mr. John Stoney, Charleston:"
"DEAR SIR: I have yesterday requested you to have insured, on my account, for the account of whom it may concern, $10,000 on the brig Creole, of New Orleans, Captain Jacob Goodrich, from this port back to New Orleans, touching at the Havana, the vessel and boats in the best order, having a roof on deck containing fourteen births, manned by seventeen hands. You know the vessel -- I have only to add, that I have made a thousand dollars' worth more of repairs and improvements on her. She is now a very convenient packet. I will feel gratified to hear from you at the Havana. I intend but making a very short stay there, having two children and two nephews with me and being anxious to meet Mrs. C., I cannot give you any favorable information respecting business in this part of Europe."
"With the pleasing expectation of being soon near you, I remain, respectfully, dear Sir, your devoted servant and friend,"
"JOHN JOSEPH COIRON"
This letter was enclosed in another, addressed by Quartier & Drogy, of Havre, to Mr. Stoney, dated 23 October, 1823, and stamped with the postmark of Savannah, December 10, which, with the endorsements thereon, were as follows:
"Havre, October 23 1823"
"John Stoney, Esq., Charleston:"
"SIR: We are indebted to our mutual friend, Mr. J. J. Coiron, from whom we beg leave to hand you the enclosed letter for an introduction to your respectable firm, and should feel
particularly happy if it became the means of an active correspondence between us, the produce of your country, and particularly cotton being always of an easy and frequently advantageous sale in this part of France on account of the vicinity of the metropolis and the principal manufacturing towns, which gives Havre a decided preference over the other commercial ports of France. Georgia short staple sells at 27 c. 29, and the stock on hand not considerable, few arrivals being expected until the new crop, which can hardly reach our market before the month of December. It would, however, not be prudent to speculate on the present prices, as they will be likely to give way on arrival of the new crop and occasion considerable losses. Our opinion is that purchases ought to be made at from 11 to 13d, and not to exceed 14d, to offer a benefit here."
"Should you feel disposed to enter into a connection of business with us and honor us with an answer, we could, if you are so inclined, commence with an adventure of a hundred bales of cotton for mutual account, and successively enlarge the speculation if the result prove satisfactory. As to the reimbursement for our share, we authorize you to draw on us, at Paris, at sixty or ninety days sight, if the exchange be advantageous, else we may either make you remittance or open you a credit at New York. In case it should suit you to speculate for your own account, we beg to offer you the facility of an anticipation of half the amount of the consignments you may please to entrust to our care on receipt of the bills of lading and order for insurance. We are also ready to offer the same facilities on shipments which you may sway to us for account of other houses, and to grant you a share in the commission on the same."
"Would oblige us to render us the following service, viz., to procure acceptance of the enclosed bill of $420, sixty days sight, on Barbet & Esnard, of your city, and when accepted to hand the same to Mr. Sam Simon at Augusta, &c."
"Believe us, with due regard, Sir, your most obedient servants,"
"A. QUARTIER & DROGY"
"John Stoney, Esq., Charleston, S.C."
"No. 9, 1823 -- QUARTIER & DROGY, Havre, Oct. 23 -- Received 13 December."
The letter of 19 October, was dispatched in a single form from Havre on the 20th by a vessel sailing on that day for Philadelphia, and was received by Mr. Stoney on 15 December -- a duplicate of the letter of the 20th was dispatched on 23 October, by the Hesperus via Savannah.
On 12 December, 1823, Mr. Stoney applied to the Fire & Marine Insurance Company, and to the Union Insurance Company in Charleston, for insurance on the Creole, and both offices refused the risk, upon the ground that they ought to have received account of the arrival of the brig before that time. The offers were withdrawn, and upon 13 December, he wrote to Thomas Tenant, Esq., at Baltimore, the following letter. The letter was postmarked at Charleston on the day of its date, and was received in Baltimore by Mr. Tenant on Saturday, 20 December, in due course of mail.
"Charleston, 13 December, 1823"
"THOMAS TENANT Esq., Baltimore: "
"DEAR SIR -- I received the day before yesterday a letter from John Joseph Coiron, via Savannah (extract annexed), in which he requests me to have insurance effected on the Creole on his account and others, valued at $10,000. The two offices here are afraid of their own shadow, and will not underwrite her. I must therefore request the favor of your having the insurance done agreeable to his order annexed, and I will be answerable to you for the premium, &c. Good upland cotton 14 cents and declining. I have only to confirm my respects of the 3d inst, which I hope you have received before this. If the insurance cannot be done with you, please write to New York to have the same effected."
"Expecting the pleasure of hearing from you soon, I am, very respectfully,"
"Your most obedient servant,"
"Havre, 20 October, 1823"
"MR. JOHN STONEY, Charleston: "
"DEAR SIR -- I have yesterday requested you to have insured, on my account, for the account of whom it may concern, $10,000 on the brig Creole, of New Orleans, Captain Jacob Goodrich, from this port, back to New Orleans, touching at the Havana. The vessel and boats in the best order, having a roof on deck, roundhouse containing 14 births, manned by 17 hands; you know the vessel. I have only to add that I have made $1,000 worth more of repairs and improvements on her. She is now a very convenient packet."
"Extract Thomas Tenant, Esq., of Baltimore, Maryland."
"No. 1. John Stoney, Charleston, 13 Dec., 1823, and 20 Dec. [mail], order for insurance. "
On 22 December, 1823, Mr. Tenant applied to the defendants, the Universal Insurance Company for insurance by the following written order for the same, and, upon the contract thus made, the policy was on the same day filled up and executed.
"I want insurance for account whom it may concern on the brig Creole, Jacob Goodrich master, at and from Havre de Grace to New Orleans, with liberty to touch and trade at Havana, against all risks -- and in case of loss, the same to be paid to me. The vessel valued, independent of freight, to this sum -- $10,000."
"The Creole was completely rebuilt and coppered at Charleston, S.C., in last summer, at great expense, and is now considered a remarkably fine vessel. She was, and I presume still is, owned by McLanahan and Bogart, and J. J. Coiron. The latter gentleman was on board her, and I presume is returning in her to New Orleans. He writes from Havre, under date of 20 October, but does not say when the brig would sail. She sails under a certificate of ownership. What will be the premium on the above risk?"
"By RICHARD G. COX"
"Baltimore, 22 Dec. 1823"
"Accepted. T. Tenant"
On the day the insurance was so made, Mr. Tenant had made application in the same terms, to the Maryland, Chesapeake and Baltimore Insurance Companies, all of which declined the risk. The Phoenix Insurance Company, upon application, declined on the ground that the time of sailing was not ascertained; and the Patapsco Company were willing to take $5,000 dollars at 5 percent premium. The insurance effected by Mr. Tenant was the only one made upon the Creole.
No information relative to the loss of the Creole was received in Charleston, nor was her loss known there until 15 December, on which day the brig Panther arrived at Charleston, and about 2 o'clock, Mr. Stoney was informed thereof.
On 19 October, 1823, by entries in the log book of the Creole, at Havre, it was shown that "the brig was getting ready for sea on the 20th; at 9 A.M., the pilot came on board, and warped out into the basin, made sail, hove to in the offing, for the captain, owner, and passengers and crew." At 10 A.M. they came off, and the pilot left the vessel. Tuesday, 21 October, 1823, the following entry was made in the log book:
TUESDAY, OCTOBER 21, 1823
H. K. COURSES WINDS
1 7 Commences with fine breezes and pleasant
2 7 weather. This day contains 12 hours, ending
3 7 at noon. At the commencement of the civil
4 7 account, that at midnight, Cape De Here bore
5 7 per compass S.S.E. distant five leagues. The
6 7 detention of Captain on shore, being in want
7 7 of the national certificate of the owners of
8 7 this brig, having been carried off by the former
9 7 captain, Leonard Fash, who was dismissed. It
10 7 was therefore necessary for the present
11 7 captain to go through the requisite formalities
12 7 before the American consul to prove the want of
this important document.
The protest of Captain Goodrich, master of the Creole, stated that the Creole sailed from the port of Havre de Grace, on 21 October, 1823, bound for Havana in Cuba; that on 29 December, the brig was wrecked and lost on Sugar Key while on the voyage, and himself, the passengers and crew, were picked up, and some of them carried to New Orleans, by the ship Trumbull, which ship arrived on 17 December, 1823. The second mate of the Creole and five passengers, among whom were Mr. Coiron and his family, left the ship Trumbull off the Havana in the small boat of the Creole, and were landed there upon the same day. It also appeared from the evidence on the part of the defendants that the schooner Chase, Captain Richard S. Pinckney, master, sailed from Havana for Charleston from 1 to 3 December, 1823, and arrived at Charleston on the 12th of the same month. Captain Pinckney stated that he did not hear in Havana any report of the loss of the Creole. The schooner Eliza and Polly sailed from Havana for Charleston three hours before the Chase, and Captain Pinckney left Havana to go on board the Chase three hours after the sailing of the Eliza and Polly.
The following letter from Lemuel Taylor to Mr. Tenant was also admitted as evidence:
"Havre, June 28 1824"
"MY DEAR SIR: Your favor of the 5th instant was received yesterday, and in reply I have only to say that I left Havana on 3 December last in the schooner Chase,
Captain Pinckney, for Charleston, and that some days previous to my departure from Havana I see a person land on the wharf, a crowd seemed to get round him, and I see several taking him by the hand; I asked who he was; his name was mentioned, but I do not now recollect it, and that he was passenger in the brig Creole, from Havre, for Havana, and lost on some of the Keys; and that he was an old trader to Havana, from France, and had a large adventure on board. His name, and time of landing, can be ascertained at Havana if wanted. I never heard the case mentioned on the passage or in Charleston, and I am sure I never thought or heard of it after leaving Havana till one day, while in Baltimore, Mr. Parker, speaking of losses, mentioned the Creole, and I observed I heard of her loss while in Havana; he then observed they should have to refuse to pay the loss, and that it would be one of the most painful disputes he ever had as president on account of the great respectability of yourself and Mr. Stoney, and mentioned something about dates. From that time until I received your letter yesterday, I never heard or thought of the case. And I again repeat that I am sure I did not hear the loss mentioned on the passage or in Charleston, and that I see the passenger land as mentioned; and that his name and date can be furnished from Havana if wanted."
"I am, dear Sir, very sincerely, your friend and servant,"
It was also proved that the northern mail closed in Charleston at ten o'clock in the morning, and generally arrived in Baltimore in seven days, exclusive of the day the letter was mailed, but never at an earlier day, though sometimes in eight or nine days; that it generally arrived from half past one to two o'clock, and the letters of Mr. Tenant were never delivered by the penny post to him, until after three o'clock on the day of the arrival of the mail. The hours of business of the insurance companies in Baltimore, terminated daily at two o'clock.
The fullest testimony was given of the high character of Mr. Stoney and Col. Tenant to negative the possibility of a presumption of intentional fraud or concealment on the part of either of those gentlemen relative to the loss of the Creole.
The plaintiff on the trial tendered nine exceptions to the opinions of the circuit court, all of which are stated on the record, but as in the opinion of this Court no notice is taken of any other than the first exception, and the court justified the refusal of the judges of the circuit court to sign the bill of exceptions to any other than the first, it is deemed necessary to insert the first exception only. That exception is as follows:
"The defendants, by their counsel, prayed the court to instruct
the jury that upon the whole evidence in the case, the plaintiffs are not entitled to recover and the verdict of the jury ought to be for the defendants, which instruction and opinion the court accordingly gave, and thereupon the plaintiffs, by their counsel, prayed leave to except, and that the court would sign and seal this, their bill of exceptions, which is accordingly done, this 10 January, 1826."
"G. DUVALL [Seal]"
"ELIAS GLENN [Seal]"
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