Interest of a supercargo. v. New York Ins. Co. 2 insufficient to satisfy his claims. He has therefore an insurable interest in the goods to the amount of his lien. And whether the lien arises from expenses and charges on account of the specific goods, or is a general balance, can make no difference; if the lien exists it involves an insurable interest. A consignee or factor, has not, as such, in all cases, an insurable interest on his own account in the property to its full value; his interest is only commensurate with the loss he may sustain by the destruction of the property; it is limited to the extent of the lien he has, or will have when the property comes into his hands. There are various sorts of consignees, agents, and factors, some having authority to sell the property, others to take possession of it only. Nor is it settled that all persons who may make something by selling or keeping property, or contracting in regard to it, have therefore an insurable interest. It is questionable whether a broker employed to sell a house, would have an insurable interest in it to the amount of his commissions. If an agent or consignee has a subsisting demand, for which the property is pledged, or will become so on its coming into his hands, the principal having in the latter case consigned it to him, or otherwise having given him a right to take possession of it, he unquestionably has an insurable interest. A supercargo who is to receive a compensation out of the homeward cargo, as he begins to render his services at the commencement of the voyage and so continues, sustains an absolute loss of his time and skill in case the cargo does not arrive. An insurance upon his interest is, therefore, strictly a contract of indemnity. And it is held, in general, that a person having a contract, which may afford him a profit or emolument, has an insurable interest in respect to the subject of such contract, as soon as he has done something, or begun to incur expenses and take steps, towards the execution of it. And where the owners of a cargo agreed to pay the supercargo ten thousand dollars 'out of the proceeds of any cargo the ship might bring from (1) Robinson Batavia, or to deliver him part of such cargo to that amount,' on the ship's arrival at New York; it was not made a question, that the supercargo had an insurable interest to that amount.(1) A quantity of moss shipped in Norway was consigned to the Cudbear Company, so called, of London, who refused the consignment, upon which Wolff and his partner, having no particular authority, otherwise than as being the general agents of the consignor, effected insurance, retaining the bills of lading in their own hands, and accepted bills on account of the consignment to the amount of 3001. Their proceedings were subsequently approved of by the consignor. They were held to have an insurable interest to the amount of their acceptance. Buller, J. said, I agree that a debt which has no reference to the article insured, and which cannot make a lien on it, will not give an insurable interest. But a debt which arises in consequence of the article insured, and which would have given a lien on it, does give an insurable interest.'(2) Caines, 357; Co. v. Robin- 616. See also 10 East, 536; Dig. h. t. No. 10. (1) Godin v. Where goods were shipped by Meybohm at St. Petersburg, The interest to Amyand, of London, to whom a general balance was due of a consignee. from Meybohm; though the bill of lading was endorsed by Meybohm to Tamesz, another Russian, Lord Mansfield, and the other judges, held that Amyand had an insurable interest in the goods. Various persons may insure various interests on the same bottom; here Mr. Amyand had an interest of his own, distinct from the interest of Meybohm; he had a lien upon these very goods, as a factor to whom a balance was due."(1) In the case of ships captured and carried into Spain, where a compromise was made with the captors by giving up a part of the cargoes, and expenses were incurred on account of the property by Cowan, who consigned a part of it to Robertson in England, on whom he drew bills for his expenses and disbursements, which Robertson accepted; it was held that Robertson acquired an insurable interest by accepting the bills. And the circumstance, that the original owners had, in the mean time, abandoned the property to their insurers, was held not to affect Robertson's interest.(2) Lond. Ass. 489. (2) Robertson v. Hamilton, Lord Ellenborough, however, seemed to think that an agree- 14 East, 522. ment for a commission on such freight as the assured might procure for a vessel owned by another person, did not give an insurable interest. Knox, of Dublin, had an agreement with a house at Jamaica for loading such vessel as he should send to that island, and he agreed for a vessel to go out to Jamaica for a cargo, on the freight of which the owners were to allow him a commission. The vessel was detained at Jamaica so long, under an admiralty process, that she lost the season, and the Jamaica house sent on their goods by another, and Knox accordingly failed of receiving the stipulated commission. The judge said, it strikes me that this was a mere expectation. The assured had an interest in the ship, only in the expectation of a cargo. This case carries us into the land of dreams, and if supported, would introduce the practice of insuring 2000 pounds prize in a lottery, without purchasing a ticket.'(3) But it is not easy to distinguish (3) Knox v. Wood, 1 the interest of Knox in this case, from what has been allowed under policies on lives and on profits to constitute an insurable reported difinterest. A case occurred in Massachusetts upon a policy on ferently by the commissions that the assured expected to receive as consignee of a vessel, and no objection was made on the ground of the insufficiency of the interest.(4) Camp. 541, Park, 405. (4) Law v. Goddard, 12 112. Mass. Rep. The interest If an agent advances money, or has a lien on goods, which become enemy's property and are captured, he cannot claim the amount of his lien against the captors ;(5) and therefore he would not retain an interest which he could insure, for the rea- of the agent is sons given against insuring enemy property. Though the agent lost if the might be a neutral or the citizen of the country of the captors, goods become his own national character would not change that of the pro- perty. perty to the extent of his lien. Chief Justice Marshall was ab(5) The Fransent when this opinion was given, and Mr. Justice Washington ces, & Cranch dissented. The opinion is, however, supported by that of Sir 418. enemy's pro (1) The Tobago, 5 Rob. 218. (2) Barker v. Mar. Ins. Co. 2 Mason's Rep. William Scott, in the case of the bottomry of an enemy's ship to an Englishman.(1) If the master of the vessel be supercargo and consignee, he will have the same insurable interest that any other agent would have under like circumstances; but as master he is not a trustee of the property but merely a carrier, and has no insurable interest in the ship or cargo.(2) Section 8. Interest in Profits. As a person, who is not owner of property, such as an agent or consignee, may insure his commissions, there seems to be as good reason why the owner should have the right of insuring the profits he expects to derive by its transportation, or any legal use he may propose to make of it. This interest is frequently insured; nor does this species of insurance partake at all of the nature of gambling. Lawrence, J. giving the opinion of the court, said, as insurance is a contract of indemnity, it cannot be said to be extended beyond what the design of such species of contract will embrace, if it be applied to protect men from those losses and disadvantages, which, but for the perils insured against, the assured would not suffer; and in every maritime adventure, the adventurer is liable to be deprived, not only of the things immediately subjected to the perils insured against, but also of the advantages to be derived from the arrival of those things at their destined port. If they do not arrive, his loss is not merely that of his goods, but of the benefits which he might obtain, were his money employed in an undertaking not subject to the perils. If it be allowable for the merchant to protect capital, subject to the risks of maritime commerce, by insuring it; why may he not protect those advantages he is in danger of losing by their being exposed to the same risks? It is surely not an improper encouragement of trade to provide that merchants, in case of adverse fortune, should not only not lose the principal adventure, but that the principal should not in consequence of such bad fortune be totally unproductive; and that men of small fortunes should be encouraged to engage in commerce by their having the means of preserving their capitals entire.'(3) It has been held in many of the English cases that, in order to create an insurable interest in profits, it must appear that there would probably, at least, have been a profit, had the property arrived at the place to which it was insured. In an action upon a policy on the profits expected to arise on a cargo of molasses,' belonging to the assured, who had a contract to supply the army with spruce beer, in the manufacture of which the cargo was intended to be used; Lord Mansfield, and the other judges, were of opinion that this was a sufficient interest, the ground of the opinion being, that as the assured was owner of the and had a contract to supply the army, if the cargo cargo, arrived, his profits were pretty certain.'(4) Insurance being effected' on profits valued at 4001.' on a voyage in the slave trade, the court held that to give the assured an interest, it must appear that a profit would have been realized. The case was decided against the assured, because he did not show that if the slaves had all got to a market, any profit would have been produced.'(1) The same principal was adhered to in an insurance on the profits of a cargo of flax, from Riga to Hull, in which Lord Ellenborough considered the insurable interest to depend on the fact, that there would have been a profit, had the cargo arrived.(2) But in New York, under a policy on profits, where three eighths of the goods were lost, the court held it to be a loss of that proportion of the profits, under the policy, without inquiring whether there would have been any profits had the goods arrived.(5) (1) Hodgson v. Glover, 6 East, 316. (2) Eyre v. Glover, 16 East, 218. (3) Loomis . Shaw, 2 Johns. Cas. 36. In another case this subject was examined by Kent, J. in whose opinion the other judges concurred. After saying that profits are insurable in England, and that freight had been held to be insurable in New York, and remarking that there is a great similarity in freight, profits, and commissions, the first being profits to arise out of the employment of the ship, the two last on the goods, he proceeds; These insurances on freight, profits, commissions, &c. are said to be founded on the course and interests of trade, and are greatly conducive to its prosperity. The doctrine, however, that runs through all the cases, is, that the assured must have an interest in the subject matter, from which the profits are to proceed, in order to prevent the policy from being considered a wager. Policies on profits or freight, if the assured be owner of the subject, which is to create them, are not wagers, but policies on a real and substantial interest.(4) No suggestion was made that a loss under the policy (4) Abbott г. would depend on the fact that a profit would have been realized, Sebor, 3 had the goods arrived. The only question as to interest, was, 39. whether the assured owned the goods. In a subsequent case, Livingston, J. giving the opinion of the same court, said, 'It does not follow that a profit will be made if the cargo arrive, yet its loss would give a right to recover on such a policy.'(5) 6 Johns. Cas. (5) Mumford Hallett, 1 Johns. 439. In Connecticut the court gave an opinion that, an interest in. the vessel and cargo, gives an interest in the profits. Such an interest in the expected profits is an insurable interest.' The insurers made the objection, that 'it did not appear, that if the vessel had arrived safely at her port of delivery, any profits would have been produced.' The court does not appear to have regarded this objection.(6) Section 9. Interest of (6) Fosdick v. Norwich M. Ins. Co. 3 Day, 108. Captors and prize agents have an insurable interest in the captured property, where they are interested in its condemna- (7) Poth. b. t. tion.(7) In 1782, the British land and naval forces, in conjunc n. 38. Omoa case. tion, captured some vessels and their cargoes at Omoa, in India, and one of those ships, the St. Domingo, being insured on account of the officers and crews of the capturing vessels, it was made a question whether they had an insurable interest. The case turned partly on the statute granting a share of prize money to the commanders and crews of capturing vessels. The court held, that if they were entitled to any share of the prize money, under that statute, there could be no doubt of their having an insurable interest in the prize. But,' said Lord Mansfield, 'supposing that doubtful; as far back as Queen Ann's time down to the present, wherever a capture has been made by a king's ship or a privateer, the crown has always given a grant of it after condemnation. Is then the contingency of the ship's coming safe such an interest as the captor may insure? Insurance is a contract of indemnity; some interest is necessary, but not any particular form of interest; it does not depend on a vested formal interest. The question is, whether this contingency is such a benefit to the assured, as will make a loss to him if the ship does not arrive? An agent of prizes may insure the arrival of a ship, which will produce him a profit; for though he has not the possession of the property, he has such an interest in the ship coming home, as that he may insure. Here the possession is in the assured, and a certain expectation of receiving the property captured, from the crown, which gives him an interest in the arrival. It is not a vested interest, but such an expectation as never was defeated.' And the assured were held to have an in(1) Le Cras r. surable interest.(1) Hughes, Park, 406. (2) Boehm r. Bell, 8 T. R. 154. Craufurd, 6 A case was decided in favour of the assured in the time of Lord Kenyon, upon an interest very similar to that of the assured in the Omoa case. The ship Westcapelle and her cargo had been captured as Dutch, and were claimed in behalf of Theodore Lyman and other American owners, to whom the property was restored. The captors, having made insurance, refused to pay the premium, alleging a want of interest. Lord Kenyon said, the assured had possession of the property, and from that possession certain rights and duties resulted. If it was a legal capture, the captors were entitled; if the capture was improperly made, they were liable to be called to account in the court of admiralty, where they might be amerced in damages and costs. It was important to them to take care that there should be something forthcoming to answer the amount of those damages. On this ground, therefore, I am clearly of opinion that the assured had an insurable interest.' The other judges gave substantially the same opinion.(2) But Lord Eldon 'If the Omoa case was decided upon the says, expectation of a grant from the crown, I never can give my as(3) Lucena v. sent to such a doctrine.'(3) And Lord Ellenborough, giving the opinion of the court in a similar case, said, that if on the arrival of the ships, the crown had made a grant to the captors, it might have been of the whole, or of a part, and a very inconsiderable part only. To what extent could they insure? Not to the whole value, because the grant might only have been of N. R. 323. |