Graves & Barnewall v. Boston Marine Insurance

Marine insurance. — Reformation of policy. A policy in the name of one joint-owner, “ as property may appear ” (without the clause stating the insurance to be for the benefit of all concerned), does not cover the interest of another-joint-owner.2 The interest of a copartnership cannot be given in evidence, on an averment of individual interest, nor an averment of the interest of a company be supported, by a special contract relating to the interest of an individual. The evidence of the knowledge of the underwriters of the intention of the insured, at the time of making the policy, ought to be very clear, to justify a court of equity in conforming the policy to that intention.3'

This was an appeal-from the Circuit Court for the district of Massachusetts, on a decree in chancery, dismissing the plaintiffs’ bill; the object of' which was to charge the defendants upon a policy of insurance, and to obtain relief against a mistake alleged to have been made, by inserting only the name of Graves in the policy, whereas, the interest of both Graves &. Barnewall was intended to have been insured. The bill stated that Graves & Barnewall were equally and jointly interested in the ship Northern Liberties and her cargo ; and that various sums of money were, by each of the partners, and at different places, procured to-be insured upon the ship and cargo, from New York to Teneriffe, as well as from thence to La Vera Cruz, but in every instance, for their joint and equal benefit. That among other applications for insurance thereon, Graves, on the 24th of April 1800, wrote to Messrs. E. Sigourney & Sons, of Boston, inquiring of them at what rate of premium, insurance could be there obtained upon that risk, and therein describing himself as one of the parties interested in the property to be insured. Upon receiving their answer, he wrote again on the 5th of May 1800, saying, “Your office ask too high a premium for the risk I was inquiring after ; the vessel cannot be out of time, as she sailed from hence for Teneriffe, in February, where we have no.t learned that she had arrived ; less so, that she had sailed ; but as it is my principle to run no risks, where I can help it, I have prevailed upon my co-partner to anticipate her arrival and sailing again to Vera Cruz. To give you a perfect idea of the nature of the risk to be insured, you will find a copy on the other side of the application, to our offices, who took a good, deal at seventeen and a half per cent. ; we may be induced to give one or-two per cent, more, to complete the business, and wish you to say, whether it could not be effected with you at seventeen and a half per cent, or near that; if so, and we have not insured elsewhere, before a return of your answer, I may likely, give you an order to effect twenty or twenty-five thousand dollars. *The copy of the application annexed to the letter, stated, that “on the 20th of February last, the ship Northern Liberties sailed from this for Teneriffe, commanded by Frederick King, a man of courage and good conduct ; she mounted sixteen six pounders, and had a crew of thirty in number. No vessel could have been more completely fitted; is-copper sheathed, and by the report of the pilot who carried her out to sea,, sails remarkably fast. Upon this vessel’s cargo, we want insurance at and. from Teneriffe to La Yera Cruz. The ship and cargo really and truly belong to American citizens.” That the said letter and copy of the application were, by E. Sigourney & Sons, as agents of the complainants, laid before the President and Directors of the Boston Marine Insurance Company, who, thereupon, offered to become insurers upon the property therein mentioned at a certain rate of premium then mentioned to the said E. Sigourney & Sons, which they communicated to Graves, who, by letter of 15th May 1800, with the concurrence of Barnewall, directed insurance to be made-upon the cargo, to the amount of $16,000 upon the best terms, within certain limits, which could be obtained. Whereupon, and in pursuance of such directions, E. Sigourney & Sons did cause such insurance to. be made, and among others, the Boston Marine Insurance Company did, by policy of insurance, dated June 14th, 1800, become assurers in the sum of $10,000 upon, the cargo of the said ship, for the voyage mentioned in the said letter. That previous to the date of the said policy, an alteration was made by the company in the common form of marine policies used in this country,, by which alteration, the ordinary clause importing the insurance to be made as well for the benefit of the persons named in the policy, as for the benefit of all concerned, was omitted, and that such altered form was used by the company, in making the insurance for the complainants; and that neither the complainants, nor their agents, the said E. Sigourney & Sons, had any notice or knowledge of such alteration. That the said letter of Graves, and the copy of the application, were shown to the president and directors of the company, as the order for the-said insurance, and were received and acted upon by them as the basis upon-which such insurance was made. And that it was well understood, *as well on the part of the said president and directors of the said company, as also on the part of the' complainants, and their said agents, E. Sigourney & Sons, that the property intended to be insured by the said policy was the joint property of a certain company or copartnership, of which Graves was a member, and not his separate or individual property ; and that the object and intent of the said insurance was, to cover the interest of the concerned therein in general, and not his particular and separate interest. But that owing to ignorance on the part of the complainants, and of their agents, of such alteration or omission in the form of the printed policies used by the said company, and to inadvertence and mistake on the part off the company, or their president or secretary, in filling up the same, the name of Graves only was inserted. That in the prosecution of the voyage insured, the ship and cargo were totally lost by the perils of the sea. The answer of the company, by their president, under the corporate seal, admitted the execution of the policy, and that Graves had some interest in the property insured, but they did not know to what amount; that upon due proof of loss, they were bound, and were ready, to pay him the amount of loss which he had sustained. It admitted, that E. Sigourney, in the beginning of May, applied for insurance, but denied, that either of the letters of the 24th of April, or 5th of May, was shown to him, or left with the president or secretary of the company, or any other person, for their use. It admitted, that the copy of the application to the Ñew York offices was left with the president, but averred, that the premium required was higher than E. Sigourney & Sons would give, and that no bargain or contract was, at that time, made, but the application was withdrawn. That no insurance was made by them, in pursuance of the letter of the 15th of May, or any other letter from Graves, and no further application was made, until the 14th of June, when Andrew Sigourney applied for the insurance of $10,000 on the cargo of the ship Northern Liberties; whereupon, the policy was made for and on account of John Boonen Graves, and for account of no other person whatsoever. It denied, that before or at the time of making and subscribing the policy, it was mentioned by the said Sigourney & Sons, or either of them, or known or understood, or suspected, by the defendants, property *proposed to be insured was the joint property of Graves & Barnewall, or of any company or copartnership of which Graves was a member, or that it was the object and intent of the said insurance to cover the interest of the concerned therein, in general, but only the separate and particular interest of Graves. It denied all mistake or misunderstanding in inserting the name of Graves alone; but insisted, that his name alone was inserted, because the interest of no other person was intended to be insured. It averred, that after the policy was prepared and filled up, it was delivered to Andrew Sigourney, of the house of E. Sigourney & Sons, and by him read and approved, and that he thereupon gave his promissory note for the premium. It denied, that any alteration or omission in the form of policies had been made or adopted by the president and directors, subsequent to the form first adopted and agreed upon by them, after their incorporation, and averred, that the form, in the present case, was the same which was then adopted, and which was settled by the president and directors, upon mature advice and deliberation, and with the express intent, that the president and directors might know the nature, character, quality and condition of every person whose interest they might insure, and to protect themselves from all responsibility and hazard, on account of the interest of any person or persons not named in the policy; and that the said printed form had been openly and continually used by the company, of which all persons procuring insurance to be done at their office had notice; and that a like form had been used at the other offices in Boston, for more than a year before the 14th June 1800. The deposition of Elisha Sigourney stated, that about the 12th of May 1800, he showed Graves’s letter of 5th May, to a person writing as clerk in the office of the defendants, and left it with him, until the next morning,, when the clerk informed him the terms on which the president and directors, would insure. That at the time of effecting the insurance, he did not know that the form adopted hy that insurance company ^differed from the usual form; but supposed the interest of all concerned was insured. The deposition of Andrew Sigourney stated, that on the 14th of June,, when he made application for insurance, he showed to Mr. May, the secretary of the company, only the instructions on the back of the letter of the-5th of May, and a memorandum to insert the words “as property may appear.” That he did not read any but the written part of the policy, before he took it from the office. That at the time of making the application, he-did not mention the name of any person as interested in that insurance, except the name of John Boonen Graves. He only showed the instructions. That he knew by the letter of Graves, that he had partners, but he did not know the name of any of them: he supposed, that the policy covered the interest of all concerned, and had no notice of any variation from the customary form of policies. The deposition of Mr. May, the secretary of the company, stated, that, the only paper which A. Sigourney showed him, on the 14th of June, when, he applied for insurance, was a copy of a proposal made to some other offices, for insurance on the same risk; and that he did not leave it, but only showed it to the deponent. That he, the secretary, filled the policy; and. understood the insurance was for Graves, and for no one else, as the policy-purports. That he was not sensible of any error in the filling it; that he-filled it, as he understood the intention of the parties in the contract. That A. Sigourney read it over deliberately, before he gave the premium note ;, and after reading it, went away. He afterwards returned, and requested the secretary to add to it the words “ as property may appear,” which, by permission of the president, were interlined. That the first policy written by the company was dated the 3d of April 1Í99. That the president and directors had made no alteration in the printed form of policies from their first commencing business, until the 14th of June 1800. On the 9th of May, E. Sigourney & Sons, in answer to Graves’s letter of' the 5th, say, that the gentlemen will not insure under 20 per cent, premium. *On the 15th of May, Graves, in answer, requested insurance to be made “for $21,000 on the ship, valued at that sum; and $16,000 on the cargo, as interest shall appear. The latter completes the sum intended to insure on the cargo. Your policy, therefore, being the last dated, it is understood that short interest (if any should appear) is to be settled with your underwriters.” On the 3d of June, E. Sigourney & Sons write to Graves that “$5900-is done on your policy on the cargo. It goes on very heavily.” Graves, in answer, on the 10th of June, says, “with much reluctance do I learn the little progress you have made in insuring the cargo. I hope by offering 2-|-per cent, more, you may induce the companies, or solid individuals, to fill up the remainder. At any rate, it will not answer my purpose, to have the risk unaccomplished; you, therefore, on receiving these presents, will please to ascertain whether there is a prospect of succeeding. If not, give me immediate notice in order to propose it elsewhere.” The material words of the policy were, “ This policy of assurance witnesseth, that the president and directors of the Boston Marine Insurance Company do, by these presents, cause John Boonen Graves to be assured, lost or not lost, ten thousand dollars on property on board the ship Northern Liberties, as property may appeal, at and from Teneriife to Vera Cruz.” “ And it is hereby agreed, that if the assured shall have made any other assurance upon the property aforesaid, prior in date to this policy, then the said insurance company shall be answerable only for so much as the amount ■of such prior assurance may be deficient towards fully covering the property at risk. And the said insurance company shall return the premium (excepting half per cent.) upon so much of the sum by them assured, as they shall be exonerated from by such prior assurance. And in case of any assurance upon said property, subsequent in date to this policy, the said insurance ■company shall nevertheless be answerable to the full extent of the sum by them herein assured, without right to claim contribution from such subsequent ^'assurers, and shall, accordingly, be entitled to retain the premium by them received, in the same manner as if no such subsequent .assurance had been made.” It was fully proved, that Graves- & Barnewall were jointly and equally ■interested in the ship and cargo. And the representation to the New York ■offices stated that fact. Four other policies, upon the same ship and cargo, and for the same voyage, were exhibited by the complainants, all of which had the usual clause, “ as well in his own name, as for and in the name and names of every other person or persons to whom the same doth, may, or shall appertain, in part or in whole.” Three of them were in the name of Graves, and one in the name of Barnewall. There was full proof of a total loss of ship and cargo. A suit at law had been brought by Graves & Barnewall, upon the present policy, in which judgment was rendered against them, which judgment was affirmed in this court, at December term 1801. This cause was argued, at February term 1804, by Stockton, of New Jersey, and Martin, of Maryland, for the appellants, and by Harper, of Maryland, and Hey, of the district of Columbia, for the appellees ; and at this term, by Stockton, for the appellants, and Harper and Ingersoll, of Pennsylvania, for the appellees.