Allegre v. Maryland Insurance

Dorsey, J.

delivered the opinion of the court. The counsel on both sides, in the argument of this cause, have displayed great professional ability, and much labour of research; and the deep interest which the commercial part of our community take in subjects of this nature, have induced the court to give the matters in controversy their most serious consideration. In the progress of the trial in, Baltimore county court, three bills of exceptions were taken by the counsel for the plaintiff, the first of which presented the following statement of facts on his part: “That -on the 23d of May 1820, he obtained insurance on the cargo of the brig Eugene, from Rio de la Plata to Ilavanna, valued at §6000; the policy of which being for tbe most part in the usual form, contained the following clause: “And in case of loss, such loss to be paid in ninety days after proof and adjustment thereof, the amount of the note given for the premium, if unpaid, being first deducted; and it is mutually agreed, that if any dispute shall arise relating to a loss on this policy, it shall be referred to two persons, the one to be chosen by the assured, the other by The Maryland Insurance Company, which two persons shall have power to adjust the same; but in case they cannot agree, then those two persons shall choose a third, and any two of them agreeing, their determination shall be obligatory on both parlies.” That on the 8th of July following, the cargo, consisting of one hundred and six mules and four jack asses, was laden on board, the brig being then safe and staunch; and whilst on the voyage, by one of the perils insured against by the policy, all the mules, save twelve, were lost. That a protest was made in due form, sworn to by the captain and three of the crew, detailing minutely all the particulars of the shipment of the cargo on board the brig, her sailing on the voyage, and the loss sustained as aforesaid. That this protest, together with the usual bill of lading, were delivered to thfe defendants by the plaintiff, as his preliminary proofs, before the bringing of this action'; ’Sometime after the receipt whereof by the defendants, they caused the following letter to be written to the plaintiff:

'«‘Mr. J. B. Allegro,

Sir — ¿I am instructed by the directors of this company, to inform you, that the claim you make for the insurance on the cargo of the brig Eugene, has had their particiilar attention, and also that of Mr; Pinkney and Mri Purmanc& the result of which is, that the company decline the pay-men,t, under a persuasion, sanctioned by those, gentlemen, TO&t the company are not answerable fot the same.

Very respectfully, &c.

John Hollins, President.”

. That áfter this testimony had been given, the defendants offered Id prove, that it was the “uniform and established usage for a vessel sailing froni the port of shipment; to have' On board a bill of lading; and invoice of cárgo; showing its prime cost and value, and that such invoice is a document which, the insurer is in the habit of demanding, and tlie assured of producing, oh the settlement Of all partial losses, although such losses inay bé claimed under a Valued, policy;” to the admission of which proof, the plaintiff’s counsel objected; but the court overruled the objection, and permitted the testimony to be given; to which Opinion the plaintiff excepted. In this case the plaintiff; having omitted to abandon, and claim for a total loss, brought the present action of covenant, to recover for a partial loss. Is there error in permitting this usage to be pro ted, to explain the meaning of the words “proof of loss and adjustment thereof?” is the question arising on this bill of exceptions. It has been conceded throughout the argument; that usages of trade are admissible in evidence to explain the meaning of expressions contained in policies of insurance, charter parties, or instruments of like nature. But it was contended that such proof could only be received of usages, which relate exclusively to. the course of the voyage. In support of this assumed distinction, ho decision has been adduced, not even an obiter dictumj nor has any reason.! been Submitted to show why the terms of a policy of insurance may not be as well explained by any other commercial usage as by usages of trade, applicable only to the course of the voyage. For solemn adjudications to the contrary, see the cases of Cutter vs. Powell, 6 T. R. 320. Mason vs. Skurray, 1 Marsh. Ins. 226; and Gibson vs. Colt and others, 7 Johns. Rep. 385. In none of which, cases were the-usages proved, as explanatory of the terms of the contract, usages of trade which related to the, course of the voyage.

The second bill of exceptions contains the facts, proved by the plaintiff, and the proof on the part of the defen» dants of. the usage mentioned, in the Jirst bill of exceptions; which usage was proved by David Winchester, president of The Baltimore Insurance, Company, and well acquainted with the mode of adjusting losses on policies of insurance. Whereupon the plaintiff, by his counsel, pray» ,ed the court to instruct the jury, that no proof is required an this trial thathe exhibited to the defendants, before instituting this suit, any preliminary proofs, or that if such proofs be necessary, the protest and bill of lading are sufficient preliminary proofs, or that said letter from the defendants was a waiver of such proof. Which direction the court refused to give; and to su»h refusal -the plaintiff excepted ,

It is a rule, of law, that in construing written instruments the court should give some meaning and operation to every clause and word of’the instrument, ’provided it can be done consistently with the intentions of the parties. Let this rule be applied to the Jirst branch of this exception, viz. Is it necessary, on a trial at law, on such a policy as the present, for the assured to prove. that he exhibited any preliminary proofs to the insurer before he commenced his action for indemnity for a partial loss. It appears somewhat a matter of surprize,' that the human mind could be prevailed upon to doubt on this subject. In support of the affirmative of this proposition, the language of the policy is so explicit, the intentions of the parties so obvious, that it almost becomes a self-evident proposition. By sanctioning the negative, you reject, as inoperative and superflu.» ous, all that is said about “proof of loss,” contrary to every known principle of construction.

The second branch of this exception, viz. “Was the ex* Mbition to the insurer of the protest and bill of lading suificient preliminary proofs?”'is a question, the answer to which is by no ineans so obvious. .There is not that perspicnity and precision in the language used, which silence “ “ all doubt as to the meaning ot the. parties. The requisitoon of' “proof off loss” is distinct and- undeniable, but the obl'igation of the assured, to furnish the customary prooís of interest, and the quantum, of loss, which form the basis of an adjustment, is- certainly not- so apparent. But- when we advert to the nature and circumstances of the contract itself, the manifest design of the parties,, in, introducing this clause, that all adjustment- of fosses should be made by themselves, the sedulous precaution with which they have endeavoured to provide against all litigation, by declaring that if they cannot- adjust the loss among themselves, that arbitrators shall’ be chosen for that purpose; .that in no event, within the contemplation- of the parties, was the assured to be authorised to sue at law. The court-think that, ' the true construction of this clause of the policy is, that the insured is bound to offer, as his preliminary proofs, such documentary proofs in his possession as are usually required in adjusting a partial loss; that is, the protest, bilí off lading and invoice, or such equivalent proofs as, the nature of the case, is susceptible of. These proofs remains with- the assured only, or his agents; the burthen offproducing them therefore rests on him.

The court forbear to express any opinion on the question so warmly contested in the argument, ‘-‘whether, in the case of a. partial loss on the cargo in a valued policy, the assured1 is tq be indemnified according to the valuation in the policy, or the actual value qf the cargo.at- the- port of shipment?” Let the question be settled as it may, if tbecargo.be a mixed one, proof of its actual- value, at the port of purchase must-be. produced, before an adjustment upon either principle can be made.

‘‘.Was the letter of the,, defendants to the plaintiff a waiver of such preliminary proofs?” is the last question arising on this exception; and the. court are of- opinion that it was. Good faith and fair dealing is' of the very essence of all contracts of insurance, and should: pervade, every proceeding under them. If then the insurer, in writing this letter, intended to reject the claim of the insured, merely because the invoice had not been produced, the yi'iting of this letter- was a fraud upon the ‘assured, a dqception utterly inconsistent with the spirit and meaning of tiie contract; a species of conduct which this court will never impute to the underwriters, while their acts are susceptible of a different interpretation. If they intended to.' refuse payment of the loss, because the invoice, a customary ■part of the preliminary proofs, had not been laid before, them, it was their duty so to have informed the insured;, and their failure to do so, and the writing of such a letter, was a waiver of all further preliminary proofs. The letter itself is a plain unequivocal notification to the plaintiff, that, his claim for indemnity will not be adjusted by the defendants; and by necessary implication gives him to understand, that all further offers of preliminary proofs would be useless. '

The agreement- to arbitrate does not oust courts of justice of their jurisdiction. The parlies then stand in an attitude not contemplated by them. Their stipulation, that the loss is only to be paid in ninety days after'pr.oof of loss and adjustment, looks only to the case of an amicable adjustment by themselves. When then by the acts ofthe defendants that cannot be made, the plaintiff is absolved-from the operation oí this stipulation, and his right of action immediately accrues. Mis case comes completely within the principle settled in the case of Ogden vs. The Columbia Insurance Company, 10 Johns. Rep. 273, where, under,a proviso in the policy, that the assured should not abandon, until six months after capture and detention, the condemnation taking place, in. one month after capture, the court, determined, that the right to abandon was immediate upon the condemnation, a new case having arisen not contemplated by the parties in their contract.

The third bill of exceptions presents a new point to the consideration ofthe court, not at all involving any question as to the merits of the matters in controversy between the parties in the cause. The bill of exceptions states, that after the plaintiff had given his evidence, as stated in the, first bill of exceptions, and having declared his intention, to relinquish the claim for a total loss, and to claim in this, action for a partial loss, the defendants, by their counsel, prayed- the court to instruct the jury, that according to the covenants contained in the policy, in order to maintain, the present action, the plaintiff was bound to prove, that previous to the institution of this suit, lie had- exhibited to. the defend ants, among the preliminary proofs of loss, and for the purpose of adjustment, the invoice showing the prime cost of the cargo, for the loss of which he was now claim» mg; the defendants’ counsel insisting in argument, that m a case like this, it was the constant usage of insurance companies, among such preliminary proofs, to require the production of such invoice, and of the insured to produce it, which usage was not ponied by the plaintiff’s counsel in argument, and by not being denied, was supposed by the court, and defendants’ counsel, to be admitted; the court accordingly instructed the jury, that it was incumbent on the plaintiff to show, that among the preliminary proofs'be bad exhibited the said invoice of cargo, and unless he should prove this fact; he would not support the pvesent action. To this instruction the plaintiff, by his counsel, declared that he jvould except, and proceeded to draw his bill of exceptions; while engaged in drawing- it, the, plaintiff’s counsel were asked by the court, whether it was their intention to go on with the cause, or whether this instruction would put an end to it? To which the counsel, answered, that it was not their intention t.o go on .with the cause; whereupon the,court, with the concurrence of;.th.e-. counsel on both sides, openly discharged the witnesses who were in attendance on the part of the defendants, and. plaintiff also; the witnesses being discharged, and. having left the court house, but the jury remaining undischarged in their box, tfyg plaintiff’s cpimsei, denied the usage before stated, and refused to have it inserted in the bill of exceptions; whereupon, the defendants’, counsel, for the purpose of satisfying the plaintiff’s counsel and the court, that it ought to be inserted in. the bill of exceptions, .sent for David Winchester, a resident of the city of, Baltimore, and. ona of the witnesses who had been so as aforesaid discharged, but who had been, previously summoned for the purpose of giving evidence in the cause, who did expressly prove the usage as above stated; after which the plaintiff’s counsel offered to proceed with the cause, and to adduce evidence thatwthe said invoice had been exhibited to the underwriters, among the preliminary proofs to wit, on the 23d day of May, in t.he year 1820; but the court, under the circumstances of-the case, refused.to permit the cause to proceed, and put it to the counsel for the plaintiff either to suhmit to a nonsuit, or to a verdict for the defendants; from which opinion of the court the plaintiff excepted.

Had the facts been inserted in this bill of excepiloias, which actually occurred in tile court belnw, as stated by the defendants’ counsel in thfe argument of this case, the conduct of that court might have appeared free from all error or ground of exception. But this court must form, their opinion upon the facts as stated in the record, and cannot loóle beyond it. In this case tbéh, as thus presented to their consideration, the Court think there is error in the proceedings of the court below. The discretionary powers of courts of law are confined within fixed and well established limits, and are to be exercised to further, not prevent, the administration of public justice. The county court had not a fight of their own mere motion, (and do other motive for their conduct here appears,) 1.0 refuse permission to the plaintiff to proceed in the trial of his cause; the right to such objection belonging to the defendants, and not the court. In the exercise of this right, the defendants must state the grounds of their objection; of the sufficiency of which the court aré to judge. If they had alleged the absence of their witnesses, occasioned by the proceedingsN which had taken' place, they must have stated what they expected to prove by them, that the plaintiff, if he sees fit, may- admit thé facts, and proceed with the trial; and should he refusé to make the admission, it would then become the duty of the court to put him to his election, either to consent' to withdraw a juror, take a verdict against him, or nonsuit his case.

, The court concur with the opinion of the county court on the first bill of exceptions, and on the two first divisions of the second bill of exceptions, but they dissent from their opinion on the last alternative of the second bill of exceptions, and from the opinion given on the third exceptions.

Let the judgment therefore be reversed, and a procedentío awarded.

¿JiDOiir.NT REVERSED, AND PROCEDENDO AWARDED.