Kendrick v. Delafield

In an action on a policy of insurance averring the loss by barratry, if the plaintiff show a loss from a fraudulent act of the master, the presumption of law is, that it was for his own benefit, and the assured, in order to entitle him to recover, need not affirmatively show it to have been so.

This was an action on an open policy, “at and from New-York “ to Curracoa,” on goods shipped on board the schooner Reindeer, and consigned, by the bills of lading, to tbe captain, who bad been, together with the crew, provided by a person to whom the vessel was chartered. The declaration contained two counts, one stating the loss to be by the barratry of tbe master, the other by the perils of the sea.(a) From the testimony of tbe master, it appeared that tlie .vessel, while chased and under a press of sail, sprung *a leak, in consequence of which he bore away for Santa Cruz; in running for which, he was obliged to throw overboard a considerable part of her cargo, in order to lighten the vessel; and even then the leak increased so much, that on his arrival at Santa Cruz, the water was up to the upper deck. This obliged him to run the vessel on shore, and sell her and her cargo. The latter was so much damaged, that the plaintiff’s goods sold for about one tenth of their prime cost. On the other hand, by the depositions of two persons, it was proved that the Reindeer was raised in seven hours after she had been sold, and that her leak proceeded from two auger holes bored in her bottom. The jury brought in their verdict for a total loss. They were, however, requested by the judge to inform the court, whether they found the loss to be from the perils of the sea, or the fraud of the master ? To this they answered, from the fraud of the master. They were then asked whether it was done for the benefit of the charterer ? To establish this fact, they said, the evidence was not sufficient. They 'were then interrogated whether, in their opinion,. they thought the evidence sufficient to show that the fraud was committed for any purpose of the captain’s ? To this they returned, there was not enough to enable them to determine who was to be benefited by the fraud.(a) After tbe verdict thus rendered, a person of the name of Foster informed one of the owners of the schooner, that if he was not paid by him the amount of a debt due from the charterer, he would disclose the whole fraud, and tell where the very auger was bought which had bored the holes in the bottom of the Reindeer. On these facts, and this subsequent discovery of testimony an application was made to set aside the verdict, and grant a new trial. 1. Because, to constitute barratry, it must appear that the fraud was committed for the benefit, or expected benefit of the captain. 2. Because, where a shipper consigns the shipment by the bill of lading to the captain, he cannot commit barratry by embezzlement of these goods. 3. Because new testimony has been discovered since the *trial, which it was hot in the power of the defendant to have obtained before. Barratry must be some act-done by the master for his own benefit,(a) to the prejudice of his owners, and so proved, 2 Marsh. 445, 456. n. (a). It must be with an intention to defraud the owners. Phynn v. Boy. Ex. Ass., 7 D. & E. 505. Moss v. Byrom, 6 D. k E. 379. Hague v. Bordieu, 1 D. & E.(b) The finding, therefore, wants tKis ingredient. To fix the loss on tha underwriters, it should state on whose account. The return of the master to be examined, is a proof that his actions were for the benefit of his owner — the owner pro hoc vice. Secondly, when the character of the captain is changed into that of a consignee, he becomes the agent of his. principal, the shipper; and though he may be liable for misconduct, it cannot be barratry so as to charge the underwriters. This principle is recognized in Fitzherbert v. Mother, 1 Marsh. 340, where the act of the agent exonerated the insurer, though the assured was perfectly innocent of the misrepresentation ; but in the present case the owner may well be presumed to have colluded for the fraudulent purpose. The bill of lading vests the property in the consignee, when possession of the goods passes with the bill. The consignor is then a cestui que trust, and the consignee accountable only on the equitable principles of the law. Had the goods been sold by the master at any intermediate port, the sale would have bound the property. The character of captain is lost in that of consignee ; for the owners of a vessel are liable for their captain’s acts only so long as he continues a simple carrier on their account. 2 Marsh. 444, after mentioning the Boman law, goes on and states that if the captain be commissioned to dispose of an adventure on board, the insurer of such adventure shall not be answerable for the loss of it; for this would make the insurer answerable to the insured for the faults of his own agents. The expectation of fully showing, on a new’trial, the fraud, from the testimony discovered, will, at least, induce the sending back for another investigation. The affidavit of newly discovered testimony is too loose; it ought to have specified a time when it might be expected to obtain the witness by whom it is to be shown, and have also gone to a full belief *of its truth. The jury had the whole evidence before them; and, if they believed the captain, it was ample. The plaintiff rested his cause there. The defendant set up the fraud of the master, and as it was relied on as a defence, it was incumbent on the insurer to show for whose benefit, because that is necessary to prove it was not barratry. To constitute an act barratry, it is enough to show it a pure fraud; for every species of fraud, cheating, &c. of the master, is barratry, without the plaintiff’s proving on whose account or for whose benefit committed. Marsh. 442; Millar, 105, 153. In a count for barratry, it is sufficient to state the loss by the fraud of the master, and it is unnecessary to prove more, than is alleged. Barratry may also be as well in respect to the cargo as the vessel. Lewin v. Suasso, Postle. Die. v. 1, p. 147; Marsh. 452, 453. The ownership, therefore, of one, does not affect the other subject. Millar, 165,167. Therefore, though the fraud of the hac vice owner, or his orders, might have prevented barratry as to his goods, it will not do away the effect as to the property of another, or an innocent shipper. Marshall, in page 444, where he cites Emerigon, tom. 1, 870, mistakes the sense of the author. Emerigon says, the captain, though consignee, may, whilst he continues acting as captain, be guilty of barratry(a) against the cargo consigned, but not after they are on shore. When both characters are united, the former does not attach till the latter has expired ; for the consignee has no right over the goods till the voyage is at an end. This principle is found in cases of abandonment, where, till that period, the captain is agent for the owner of the ship, but afterwards he becomes that of the assurer. Besides, the presumption of law is that every man wbo commits a fraud does it for bis own 'benefit, and not for that of bis owners. Millar, 173. Boss v. Hunter, Marsb, 466, 467. Nutt v. Bordieu was tbe case of an innocent shipper, and yet because tbe fraud there was with tbe knowledge of tbe shipowner, it was decided not to' be barratry, though tbe sentence in France had pronounced that it was \ for it must be an act against tbe duty to tbe owner of tbe ship. The intent is part of tbe offence, and ought to be shown. Of this, tbe jury answer, there was no proof. In Boss v. Hunter, 4D.&E. 33, the act was proved to have been *done for tbe benefit of the captain. To show the character of master is sunk in that of consignee, had a shipper consigning goods to a captain brought an action against the owners for an embezzlement by the master, could there be a recovery? The argument from the innocence of the shipper is of no force, because barratry is a technical offence. Want of seaworthiness avoids a policy, though certainly no crime in the shipper. The contract in both cases is founded on certain fixed understandings. The as-surer being liable for barratry only when established, it must be proved by him who claims the benefit of that part of the engagement.