Sun Mutual Insurance Company v. Wright/Opinion of the Court

This is a writ of error to the Circuit Court of the United States for the district of Maryland.

The suit below was upon a policy of insurance brought by the plaintiff to recover a loss upon coffee on board the vessel Mary W. on a voyage from Rio de Janeiro to a port in the United States. The questions involved are substantially the same as have been examined in the case of the same plaintiff against the Orient Mutual Insurance Company, and the decision in that governs the present one.

It was insisted in this case, on the part of the plaintiff below, that the company had waived the question as to the premium on the declaration or report of the Mary W., as it was bound by the act of the agent in making the endorsement on the policy, who added simply the words, 'not to attach if the vessel proved unseaworthy.'

The company were advised, by a letter of their agent, dated August 23, 1856, of the application of the plaintiff to have the coffee in question on the Mary W. entered on his policy; and on the 25th of the month they answered, directing the agent to inform the plaintiff of the facts the company had previously communicated to R. C. Wright, a brother, in relation to the vessel, and that they regarded her an entirely unfit vessel for a cargo of coffee, and should not consider the policy as attaching to the cargo.

The correspondence with R. C. Wright on the subject was under date of the 14th August, same year, and which related to a different shipment of coffee on the same vessel.

The plaintiff, notwithstanding the objections of the company, insisted upon his right to have the coffee covered by the policy, and so advised the agent, who communicated the information to the company. On the 26th of the month, they, still insisting that the vessel was unfit for such a cargo, instructed the agent to inform the plaintiff that if he claimed the property to be covered by the policy, he must consider it subject to the risk of the policy not attaching from the unseaworthiness of the vessel. Upon this, the agent entered the coffee upon the policy, with the words, 'not to attach if vessel be proved unseaworthy,' and so advised the company. They, on receiving this advice, immediately informed the agent that the endorsement was a practical nullity, and directed him to inform the plaintiff that they conceded his right to be covered by the policy, and that they had no other remedy but to name a premium commensurate to the risk, and fixed the premium at ten per cent., subject to the conditions of the policy, or two and a half per cent. upon a total loss. In answer to this, the plaintiff objected to the premium, insisting, if the Mary W. rated below A 2, the company were only entitled to an equitable rate of premium; and if they and he could not agree, it was a proper case for a reference.

The company, in answer to this, respond, that they had reserved the right in the policy to fix the premium in case of vessels rating below A 2, and that they could not consent to its determination by a third person. The plaintiff again denied the right of the company to fix the premium, and thus the correspondence terminated.

It is quite apparent that there was no waiver of this right of fixing the premium on the part of the company, nor was it claimed or suggested in the communications between the parties at the time.

Judgment reversed, and a venire de novo awarded.