Waters v. Merchants' Louisville Insurance Company

CERTIFICATE of Division from the Circuit Court of Kentucky. The plaintiff, a citizen of the state of Louisiana, on the 12th day of September 1832, caused insurance to be made by the Merchants' Louisville Insurance Company, at the city of Louisville, in the state of Kentucky, in the sum of $6000, on the steamboat Lioness, her engine, &c., to navigate the western waters usually navigated by steamboats, &c; the assured having the privilege of placing competent masters in command, at any time; the insurance to continue for twelve months, until 12th September 1833. The perils insured against, were those 'of rivers, fire, enemies, pirates, assailing thieves, and all other losses and misfortunes which shall come to the hurt or detriment of the steamboat, her engine, tackle and furniture, according to the true intent and meaning of the policy.'

An action was instituted in the circuit court, on this policy, by William Waters, the assured, to November term 1836; and the plaintiff averred in the declaration, an interest in the steamboat Lioness, at the time of the insurance, and up to her loss, of $16,000; that the said steamboat Lioness, her engine, tackle and furniture, after the execution of said policy, and before its termination, to wit, on the 19th of May 1833, on Red river, about one mile below the mouth of Bon Dieu river, whilst she was on her voyage from New Orleans to Natchitoches, Louisiana, on Red river, were, by the adventures and perils of fire and the river, exploded, sunk to the bottom of Red river aforesaid, and utterly destroyed; so as to cause and make it a total loss. And the plaintiff averred, that said steamboat Lioness was, at the time of the explosion, sinking and destruction aforesaid, by the perils aforesaid, sufficiently found in tackle and appurtenances thereto, and completely provided with master, officers and crew, and in good order and condition, and perfectly seaworthy. The declaration also averred, that a regular protest of the manner in which the loss of vessel took place, was made; and the same, with proof of the plaintiff's interest, were delivered to the defendants. To this declaration, the defendants filed the following pleas:

1. That the officers and crew of the Lioness, and the time of her explosion and sinking, so negligently and carelessly conducted themselves in managing and attending to the safety of the cargo on board, that the steamboat was, by means of fire, negligently and carelessly communicated to sunpowder in the hold, by the officers and crew, blown up and destroyed.

2. That the Lioness was loaded in part with sunpowder, and that the officers and crew, or some of them, carelessly and negligently carried a lighted candle or lamp into the hold, where the powder was stored, and negligently handled the candle or lamp at the time that the powder was exploded; and thereby produced the explosion and destruction of the said steamer.

3. That the Lioness was in part loaded with gunpowder; and the same was so unskilfully, negligently and carelessly stowed away in the boat, by the officers and crew, or some of them, that the gunpowder took fire by reason of the said unskilfulness, negligence and carelessness; and the boat was, consequently, lost and destroyed by explosion.

4. That the Lioness received and had on board a quantify of gunpowder, at the time of the explosion, which increased the risk of the insurers, contrary to the true intent and meaning of the policy; by which the insurers were discharged from the obligations of the policy.

5. That the loss of the Lioness was caused by the officers and crew, or some of them, carelessly and negligently carrying a lighted candle or lamp into the hold; and so negligently or carelessly carrying the same, as the explosion of the vessel was thereby produced.

6. That the loss of the boat was caused by the conduct of the officers, managers and crew of the boat, in taking and receiving on board large quantities of gunpowder, and by carelessly keeping the same; in consequence of which, the gunpowder became ignited, while on board the boat, and by its explosion, caused her loss and destruction. To these pleas, the plaintiff demurred; and the defendants joined in demurrer.

On the argument of the cause, the following questions and points occurred, upon which the judges of the circuit court were divided in opinion; and the same, at the request of the defendants, were stated, and ordered to be certified to this court. 1st. Does the policy cover a loss of the boat by a fire, caused by the barratry of the master and cres? 2d. Does the policy of insurance cover a loss of the boat by fire, caused by the negligence, carelessness or unskilfulness of the master and crew of the boat, or any of them? 3. Is the allegation of the defendants, in their pleas, or either of them, to the effect that the fire by which the boat was lost was caused by the carelessness, or the neglect or unskilful conduct of the master and crew of the boat, a defence to this action? 4th. Are the said pleas, or either of them, sufficient?

The case was argued by Crittenden, for the defendants. No counsel appeared for the plaintiff.

Crittenden said, as to the first question, the only inquiry that seems necessary to a satisfactory solution or answer to it, is, whether barratry is insured against by the policy. Barratry is a peculiar and distinct risk, for which insurers are made responsible by express stipulation only. Grim v. ''Phoenix Ins. Co.'', 13 Johns. 451. And, accordingly, in the common forms of marine policies, it is always expressly embraced, and described by its appropriate and technical denomination, barratry. In this policy, there is an enumeration of the risks, and barratry is not included. Its omission is equivalent, in legal interpretation, to its express exclusion: expressio unius est exclusio alterius. The general clause in the policy, that follows the enumeration of the risks, to wit, 'and all other losses and misfortunes,' &c., has reference only to 'losses and misfortunes' proceeding from the enumerated risks; and is not intended or to be construed as adding other risks, or enlarging the perils that the insurers are to bear. They are nothing more than words used out of abundant caution, to give full effect to the previously enumerated risks; for which alone the underwriters are responsible. It may, therefore, we think, be safely assumed, that the policy, in this case, contains no insurance against barratry; and, we suppose it must follow, that if the defendants did not insure against barratry, they cannot be liable for a loss by fire, caused by barratry.

2. As to the other three questions, it is supposed, that they will all be virtually settled by the decision of a single point; that is, whether the defendants, there being no insurance against barratry, are liable for a loss by fire, arising from the negligence of the assured, or his agents, the master and crew? The defendants contend for the negative of this question.

If there be one case, turning on that very point, in which such a liability has been adjudged to exist, we have not met with it. The liability of underwriters for such losses, where barratry also is included in the policy, is supposed to have been settled in England, as late as the year 1818, by the decision in the case of Busk v. Royal Exchange Insurance Company, 2 Barn. & Ald. 72; and that decision was adopted and followed by this court in the case of the Patapsco Insurance Company v. Coulter, at the January term 1830 (3 Pet. 222); contrary to the case of Grim v. Phoenix Insurance Company (13 Johns. 451), and all the American cases on the same point. But the English case, and the case in this court, leave undetermined the question of liability, where there is no insurance against barratry. In the latter case, it is said, that question 'need not here be considered;' and in the English case, the reasoning of the court to establish the liability, where barratry is insured against, is strong against the existence of any such liability, where there is no insurance against barratry. The court say, 'where we find that they (the insurers) make themselves answerable for the wilful misconduct (barratry) of the master, in other cases; it is not too much to say, that they meant to indemnify the assured against the fire, proceeding from the negligence of the master and mariners.' Thus, the undertaking to indemnify against the effects of negligence, is inferred, exclusively, from the express agreement to be answerable for barratrous conduct; an argument pregnant with the conclusion, that, but for the insurance against barratry, there would have been no responsibility on the insurers for a loss by negligence; and such, we insist, is the correct doctrine recognised and sanctioned by elementary writers (Marsh. 156, 421, and Philips, 224-7), and by adjudged cases. Grim v. Phoenis Insurance Company, 13 Johns. 451; and the cases there cited, of Vos v. United Insurance Company, 2 Johns. Cas. 180; Cleveland v. Union Insurance Company, 8 Mass. 308, &c.; Toulmin v. Inglis, 1 Camp. 421; Pipon v. Cope, Ibid. 434; Toulmin v. Anderson, 1 Taunt. 227; and Boyd v. Dubois, 3 Camp. 133. The case of Phyn v. Royal Exchange Assurance Company, 7 T. R. 505, and many other cases, proceed on the same principle.

It is admitted, that the doctrine for which the defendants, in this case contend, is, seemingly, in opposition to some remarks that fell from this court, in the late case of the Columbia Insurance Company of Alexandria v. Lawrence, 10 Pet. 507. It is respectfully suggested, that those remarks (entitled in all other respects to the highest consideration) related to a point not involved in the case, or necessary to its determination; and were, probably, therefore, less weighed and considered by the court. The point was not involved, because that was an insurance of a house against fire; and, in such cases, the books and authorities all seem to concur, in holding the insurer responsible for losses occasioned by the negligence of servants; in contradistinction to the responsibility resulting from marine policies. It is hoped, therefore, that the question now under consideration, may be regarded as an open one; neither concluded nor affected by what fell from the court, in the case last mentioned.

Furthermore, the rule for which we contend, exempting insurers from liability for the negligence of the assured and his agents, is supported by its analogy to the familiar and well-established doctrines applicable to bailments generally; and is sanctioned by reason and sound policy, as contributing to the general interest and security, by rendering the assured and their agents more diligent and more careful.

STORY, Justice, delivered the opinion of the court.