Lawrence, Jun. and Whitney against Van Horne and Clarkson

Lawrence, Jun. and Whitney against Van Horne and Clarkson. Uiíder a general policy on goods, the assured need not disclose that his interest is only of an undivided part, but may recover according to his interest. If a vessel be captured and acquitted, the assurer is liable to the expenses incurred in prosecuting an appeal, interposed against the sentence' condemning the assured in costs, and to obtain compensation for damages occasioned by plundering and embezzling, though the expenses surpass the amount of the underwriter’s subscription. A paper noticed to be produced and called for, is in evidence, and the party noticing has not a right to first inspect it. Whether the expenses incurred in an appeal are reasonable or not is matter for a jury. This was an action on a policy of insurance, dated the 28th of April, 1797, on the cargo of the schooner Hymph, on a voyage to L’ Anceveau, in St. Domingo. The declaration was for a total loss by capture, with an averment that the assured had labored for the recovery of the cargo, and expended 4,000 dollars,- of which the defendants’ proportion was 250 dollars, a sum equal to that of their subscription, which was for 250 dollars only. The invoice of the cargo, including the premium of insurance, amounted to 12,061 dollars; the plaintiffs’ interest a third; but this circumstance was not specified in the policy, which was general, without any disclosure of the rights of others in the subject insured; theirs not being intended to be protected by the instrument. From the facts, as given in evidence on the trial, it appeared-that the vessel sailed from Hew York the 1st of April, 1797, on the voyage insured; that she was [*277] captured by a Spanish privateer, and ^carried into a port in the island of Cuba, where she and her cargo were libelled, but ordered to be restored. The court, however, sentenced the claimant in costs, to the amount of 1,500 dollars. The captain thinking this unjust, and finding not only the cargo one third plundered, but his vessel stripped of almost every thing, appealed from the decision to the court in the Havanna, which ordered the captain of the privateer to make good all deficiencies in the cargo, and that these should be ascertained by comparing the invoice with the amount of the sales which had taken place under an order of the couit below, where they remained. Still, however, nothing wa.3 said of the costs, and the captain, after having appealed tv Madrid, came away. Of the capture, and various steps thus taken, he gave the earliest information to his owners, and the assured in the present policy, who immediately, on knowing of the vessel’s being carried in, made their abandonment, which the defendants refused «to accept. The plaintiffs, therefore, continued from time to time to direct the measures to be adopted by the captain, and paid one third of the bills he drew. The circumstances and situation of the vessel in Cuba, were proved to have been known and conversed on in one" room used by some of the underwriters on the present policy, but not by the defendants, though it was also in evidence, that the conversations in one room are, for the sake of general information, carried and communicated in the other. The defendants gave notice to the plaintiffs to produce a letter on the trial, which, when it came on, they\ refused to do, unless the defendants would engage to read it in evidence. This they declined acceding to, without being first permitted to inspect it, and on its being denied, the judge before whom the cause was heard, ruled that the inspection could not be demanded, except on the terms which the plaintiffs wished to impose. After this the trial went on, and the jury, in conformity to the opinion of the court, found for the plaintiffs, making, however, a very considerable deduction from the amount of the charges claimed. *To set aside this verdict, and grant a new trial, [*278] a motion now was made. Pendleton, for the defendants. The question, whether the underwriters are liable for expenses incurred in the prosecution of a suit for damages, after restitution, and a decree of acquittal when the captain appeals for damages, but does not say on what account. His own affidavit mentions, “ that after several trials, it was finally decreed, on the 8th of March, 1799, that the vessel and proceeds of the cargo, should be restored to this deponent, and that any deficiency in the cargo should be made good by the captain of the privateer, to be ascertained by comparing the invoice with the account of sales of said goods, but no damages or costs were decreed." It is no part of an underwriter’s contract to be answerable for damages on an appeal. The policy gives the assured a right to use exertions for saving the property, but after a decree to restore, the underwritten proceeds at his own risk. However, should it be otherwise, and the assurer be responsible, here the assured has not conducted himself so as to be entitled to demand any compensation from the underwriter. From August, 1798 to January, 1800, there is no application to pay any thing yet, for that time, the assured were informed of all circumstances, and bills were continually drawn upon him during the whole period. The assured ought not to have paid bills, given directions, and thus interfered, without the approbation of the assurers; because, if they are to be charged, he was making them liable out of the policy, and for what they did not engage. It is very loosely stated that the underwriters knew of the proceedings going on ; mere possible hearing of conversations and facts. But it is not any notice, unless informed of particulars, of and for what the proceedings were going on. It is assigned as a reason for abandoning, that the underwriters had assumed to pay all expenses; here they were not put in a situation to make that election. There is also a point of law in this case arising from the manner in which the insurance is made. It is a joint adventure, by three persons interested. The action is by one of the parties, and the declaration [*279] is, *that he is one third interested in the policy. When the insurance is on a cargo, it may be questioned whether he can make such an insurance, unless the policy be one equal undivided third part of the cargo. One witness says he was not insured: but under this policy there is nothing to hinder Mm from claiming a part. The averment ought to have been special, and so ought the policy, if any one person meant to insure a separate interest. It is conceived also, that the judge has mistaken the point of law with respect to the calling for papers. He ruled that when a paper is called for, the party cannot examine it to see if it is evidence, before he uses it in the cause. But he is no more obliged to use it- than he is an answer in chancery. Here the plaintiffs would not produce the letter, unless the defendants would agree to read it as evidence. This they declined, unless they were permitted first to read it; and the court determined that the defendants had no right to a previous inspection. Riggs, Hoffman and Troup, for the plaintiffs. We shall reverse the order in which the points have been brought forward by the defendants’ counsel. We shall first speak to that which has been last insisted on ; the misdirection of the judge'relating to the paper called for. On this subject there is no case in the books, except the one in Espinasse, (Sawyer v. Kitchen, 1 Esp. Rep. 209,) and that does not apply. The point comes to this, that a party is entitled to look at every paper in the plaintiffs’ possession. When an application is made for papers in the possession of another, the notice to produce them is on account of a previous knowledge of their existence and contents. It is done, therefore, on this principle, that there is a conviction they contain evidence useful to those who give the notice. If the adverse party does not produce it, the other side may offer testimony of its contents should the party noticed, be ready to give the paper in evidence, it does! away the necessity of paroi evidence of its contents, to entitle to which, is the only reason why the notice is given. When the paper is called for, it is at the peril of the party who does so, and when so called for, if produced at all, even to [*280] the adverse party, *he ought to be'compelled to read it in evidence. The attempt of the defendants, and the objection raised upon it are mere speculations, . and, therefore, not to be favored. To adopt the doctrine contended for by the plaintiffs can induce no injury, but that of the defendants can produce no good. ' It affords an opportunity of inspecting, without any determinate view ; if the paper is favorable, it is read; if unfavorable, rejected, and thus every scrap of writing in the possession of another is to be ransacked for the benefit of his adversary, without his even knowing whether it is to do him good or not. In the second place, as to the question made of the right to maintain an'action for a third part. Every man who is an owner of an undivided part, may insure his part, and bring an action on it: for a joint connection will not prevent the insurance of what one has. The insurance need not express it to be an undivided part. The contract is so drawn for this very purpose; it is general, As well in his own name, as for and in the name and names of all and every other person or persons to whom the same doth, may, or shall appertain, in part, or in whole, does make insurance, and cause himself and them and every of them,” &c. The engagement is to be applied as the interest of parties present themselves, for their several interests or« covered by one policy. This construction does not mill tote against the principle that he who thus insures shall, ai the trial, recover according to his interest; on'the contrary, that, very rule is founded on the principle.- With respect to the first point raised by the defendants’ counsel, whether the insurers were liable for expenses in a suit on an appeal for damages, after a restitution and decree of acquittal, per haps, if the word was taken in the full and large sense of acquittal, and the appeal had been for imprisonment, or personal damages, the insurers would not have been bound. Yet, when the party prosecutes and partially obtains recompense, he then may appeal for damages, in the same manner as for restitution, if the whole had been condemned. The property was not so acquitted, as to permit the captain to proceed with his cargo, in the same manner *as if it had been restored, though charged. [*281] Even then he might have appealed for his charges; but it was not so restored; it was plundered of one third, and two thirds only of the whole were restored. On this account, and for this the appeal was instituted. If it was the master’s duty to litigate, it was his duty to appeal, in order to get the whole property. If a contrary coarse had been pursued, and the two thirds had been received without an appeal, the defendants would have called on him for the third he had neglected, as they would have insisted that the clause is obligatory. The vessel was stripped of her sails, and, therefore, she could not have gone on with her cargo, though the captain had been willing to relinquish the one third plundered. If this be a restoration to make invalid his endeavors to get the third plundered, it would be very difficult to say what a restoration meant. The charge stated in the case, takes away the necessity of any further argument. The point for the jury was, were the circumstances such as to justify the appeal? Whether done with or without the knowledge of the assurer, was a matter given in evidence, and, therefore, left to the jury. But let it be remembered the abandonment was not accepted, and therefore the assured were obliged to adopt such conduct as would establish the right of the assurers, or themselves. The defendants ought to have taken the, abandonment, to entitle themselves to find fault with the appealing of the plaintiffs. If the captain’s conduct has' been prudent and discreet, every part of it renders the insurer liable. It is a general principle that the bona fide conduct of the captain charges the underwriter. From the circumstances in evidence, and set forth in the case, it is probable the defendants had notice, and on that probability the jury are to determine. The non-objecting of the defendants, when they knew what was going on, was an acquiescence on their part. The quantum of the claim was also taken into consideration by the jury, and they struck off a part, amounting to several thousand dollars. Suppose the whole had been destroyed, would not the captain have [*282] been justified *in instituting a suit for damages, and there the suit could not have been for restitution, but in terminis for damages. As to the formal objection made by the defendants, that the action was not maintainable, the insurance being general, and the suit for only one third. Whatever weight might be in the objection itself, though that it possessed any is not very evident, it, at all events, comes too late. The present is an application for a new trial, and, therefore, the objection not to be attended to now. Does the judge below decide on rules of practice? This objection does not touch the merits, but is merely a question of practice: the defendant, therefore, to avail himself of it, should show that he has suffered an • injury by it. Hamilton, in reply. It is of importance that the latitude taken by the assured in charging underwriters, through the general agency given by the clause under which the present hopes are founded, .should be in some degree confined. The plaintiffs never asked whether they should proceed or not, but continued for two years defending without any personal authority. The increase of expenses was more than the whole value insured. However principles might warrant such a case, it ought not to conclude them. The question was, whether the parties had. proceeded without authority. With regard to the interest insured, it deserved the interpretation of the court. Policies no doubt have a certain degree of latitude; they may cover various interests; such as are equitable, and even those which are undisclosed. ■This was an agreement for an insurance of a part, and it must be allowed; but then L ought not to cover the whole, when there is a joint interest. When it does so, the whole must be intended to be secured by a party insuring generally, and not that it is for his separate interest. What that interest is, he should specify; the contrary leads to fraud; because, if the vessel arrive safe, a return of premium might be demanded. Several policies might be effected by the several proprietors, each for the whole, and unless discovered, the subject of insurance might be paid for ten times over. But nothing can justify the plaintiffs’ pursuing *the conduct they adopted at [*283j the defendants’ expense. Whether the power to charge the underwriter at all, under the clause of the policy now insisted on, did not terminate the instant he had notice of the disaster, is, perhaps, the true point in question. The authority was immediately on notice, perfectly at an end. The right to charge the assurer, previous to notice, would exist without any clause; there would, and must be, an implied agency. The supercargo, or captain, would, from his situation, be constituted the agent of the parties concerned. The interests of all give him a right, according * to foreign authors, to act from necessity. The clause was merely to affirm that principle inherent in the nature of the circumstances, and flowing from them: to remove a doubt which hung over the case of abandonment, whether the acts of the agents of the assured should not be construed a waiver of the abandonment that had been made. This implied agency could not, in strictness, continue after the abandonment. If an election to abandon be made, the right to act for the underwriter will be destroyed; if it be not made, the assured, as owner, must act for himself. After abandonment, reason appoints the assurer to act over his own property and interest. If a part be uncovered, then the assured may pursue for that, but not so as to charge the underwriter It was not intended to say that the acts of the master, if left to himself, would not bind the underwriter. For he would continue or become the agent of him, in whom, after abandonment, the property vested. The orders given by the assured in this case, are like those in cases of two routes in the iter: a direction to pursue one, by destroying the captain’s. right of discretion, creates a deviation. No argument can be raised against the defendants, from the circumstance of their not objecting to the intermeddling of the plaintiffs; there was a joint interest, and, therefore, the unassured might act for the preservation of their own ; and, in such a case, could the silence of the underwriter be construed into an acquiescence ? for a mere silence of this sort could never create an authority [*284] to charge. With respect to the decision *of the judge at nisi prius on the point of evidence, he relied on the case from 1 Espinasse, 209. The underwriter never can he called upon to pay more than he has received a premium for. [MAJORITY — Radcliff, J. Thompson, J. Lewis, Ch. J. Kent and Livingston,] Radcliff, J. Several questions have been made, which may be considered in the following order: 1. Whether the insurance, which was general, can apply exclusively to the interest of the plaintiffs, that being an undivided third part of the cargo ? 2. Whether the defendants are at all liable for the expenses which accrued subsequent to the acquittal, and in prosecuting the appeal for damages? 3. Whether the defendants were not entitled to inspect the letter called for by them, and to elect whether it should be read in evidence ? 4. Whether the expenses in prosecuting the appeal at Cuba were reasonable, and ought to be allowed? As to the first, I consider it well established in practice, that the assured is not required to state the particular interest, or proportion of interest, which he intends to have insured. It is sufficient if he have an insurable interest to the amount in question. Whether it be a distinct, or an undivided share, cannot be material. It may often be difficult to ascertain his interest with certainty. The owners were at least equitably entitled to their shares in severalty; the interest of each, I, therefore, think, ought to be permitted to be severally enforced. In the present case it appears that the insurance was in fact so intended, and a witness, who was one of the partners, testified that the plaintiffs had no authority to insure except on their own account. The danger of fraud from this practice, I think is remote, and less to be apprehended than the inconveniences which may arise from a contrary rule. 2. As to the second objection, I see no reason why the defendants should not be liable for the expenses attending the prosecution of the appeal in Cuba, which was conducted with good faith and for their benefit. I am informed that it was decided by this court in April, 1795, in the case of Smith v. Scott, that an assurer is liable for similar expenses, beyond the amount of his ^subscription, [*285] and I believe that the underwriters have in practice, uniformly acknowledged their liability. The appeal in the present case, I think, was justifiable. The captain was condemned in costs amounting to about 1,500 dollars, one-third of his cargo was plundered, and the vessel stripped of everything necessary to her equipment. The restoration of the vessel and cargo in that condition, was a little better ';han a total loss. There is no direct evidence that the defendants afterwards had notice of the -proceedings, but' I think it may be fairly presumed. The capture was well known to them; an abandonment was made, and the proceedings were frequently a subject of conversation between other underwriters on the same policy. The defendants did business in the sam'e coffee-house with those underwriters, and though in a different room, it is proved that it is usual for underwriters on the same risk to communicate to each other the information they receive. From these circumstances, I think actual notice to the defendants may be presumed; if, then, they had notice, and did not signify their dissent, they ought clearly to be held liable to the result. 3. As to the third point, I see no reason to change the' opinion I entertained at the trial. A party who gives notice to produce a paper in evidence, must be supposed to know its contents. If he does not, he ought not to be permitted to speculate through the forms of law, and obtain from his adversary the inspection of any paper or document he may choose to demand. Such a privilege would be liable to abuse, and, I think, neither correct in principle, nor consistent with the form of proceeding in such cases. The notice to produce a paper, requires it to be produced in evidence, and when once called for and produced, it is of course in evidence, and I think it cannot be called for on any other terms. I understand this to have been the practice of our own courts, and no question has arisen upon it to my knowledge, until a late decision of Lord Kenyon at nisi prim, which suggested the idea now maintained by the defendants’ counsel. Sayer v. Kitchen, 1 Esp. Cases, p. 210. It may be .questioned whether the point decided in that case, is similar to the present. Without examin[*286] ing *this, it was an opinion at nisi prius, and of itself no authority; and in addition to what has been said, I think the alternative that the party giving the notice, if the paper be not produced, may go into evidence of its contents, shows not only that he must be supposed to be apprised of them, but that he cannot have it in his power to compel a previous inspection. If the paper be refused or withheld, he can do no more than give inferior evidence respecting it; Neither the court nor the party can enforce its production for the purpose of inspection, or any other purpose. 4. Whether the expenditures in prosecuting the appeal in the island of Cuba, were reasonable and proper, under the circumstances of the captors’ situation there, was distinctly submitted to the jury, and if extravagant or improper, they were directed to make such deductions as in their opinion should appear reasonable. They have, in fact, made a considerable deduction, and I cannot say that they have not done right, or ought to have deducted more. I am, therefore, of opinion, on all the points, that the plaintiffs are entitled to recover according to the verdict as it stands. Thompson, J. I concur in the opinion given, except as to the third point. I am inclined to think the defendants were entitled to an inspection of the letter they had given notice to produce, without stipulating that they would afterwards read it in evidence. The practice of giving notice to produce papers, as in the present case, has been introduced to save the expense of going into chancery for a discovery, and I can see no good reason why the party ought not to be entitled to all the advantages he would have, had he resorted to his bill in equity. In that case, after a discovery, he might exercise his discretion whether to use it as evidence or not. I do not think this right of inspection would be liable to the abuses suggested by the plaintiffs’ counsel, that it might lead to an impertinent inspection of papers having no relevancy to the controversy. The party calling for the paper, must appear in the first instance, to have an interest in, and right to, it; he must give notice to produce it. This notice must contain % description of the paper with convenient [*287] certainty, and it must be proved to be in the possession of the opposite party; after which it would be competent for the party having the paper, to object against the introduction, or the proof of its contents, as being illegal or irrelevant, in the same manner as if the party calling for the paper had been in possession of it, or as might be done with respect to every other piece of testimony. To require a stipulation, at all events, that the paper should be read in evidence, might, in many cases, compel a party to introduce testimony against himself. This would be unreasonable, and I think liable to much greater abuse than permitting a previous inspection. So far as the decision of Lord Kenyon ought to have influence on determining this question, we have it in the case of Sayer v. Kitchen, at nisi prius, 1 Esp. Oases, 209. The defendant had given notice to the plaintiff to produce his books, and after having inspected them, declined using them as evidence. The plaintiffs’ counsel then insisted, that the defendant having called for the books, they were in evidence before the jury. But■ Lord Kenyon said, it did not make them evidence; that if the counsel on one side called for the other’s books, and made no use of them, that it was only matter of observation" to the counsel on the other side, that the entries there were in favor of his client, but did not entitle him to use them in evidence. Although .this decision is in no way binding on this court, yet I think the rule there laid down, is founded in good sense, and best calculated to answer the ends of justice, and, therefore, proper to be adopted. Had the plaintiffs in the present case, entirely refused to produce the letter, there can be no doubt the court could not compel a specific compliance with the notice, but could only have permitted the defendants to go into proof of its contents. The plaintiffs, however, admitted they had the letter, and made no objections against delivering it to the defendants, provided they would stipulate at all events to read it in evidence, which they refused to do before they had inspected it, "and the court decided that the defendants were not entitled to inspect the letter, unless they .[*288] would *afterwards read it in evidence. I think the judge ought to have said to the plaintiffs, if you have a letter, and intend to produce it, the defendants have a right to inspect it, and thus make their election whether to read it in evidence or not. If you refuse tc produce it, the defendants will have a right to go into proof of its contents. Lewis, Ch. J. concurred, and on the third point said, he did not consider there was any essential difference between the opinion of Thompson, J. and that delivered by Mr Justice Radcliff. Kent and Livingston, Justices, gave no opinion, the former not having heard the argument, and the latter hay lug been of counsel in the cause. New trial denied. See Lawrence v. Sebor, 2 Caines’ Rep. 208, n. Watson v. Marine Insurance Company, 7 Johns. Rep. 62, S. P. And in the expenses of labor, &c., may be included those of wharfage and selling the ship. McBride v. Mmine Insurance Compmy, 1 Johns. Rep. 431. But under this clause by which these expenses are recoverable, the assured, or their agents, are not hound to appeal. Gardere v. Columbian Insurance Company, 7 Johns. Rep. 514. Decided according to this. Kenny v. Van Horne & Clarkson, 1 Johns Rep. 395.