Cunningham v. Switzerland Marine Ins. Co.

26 F. 46, 1885 U.S. Dist. LEXIS 174

• Court: District Court, S.D. New York
• Decided: December 31, 1885
• Status: Published

Opinion

Brown, J.

The above libels were filed by cargo-owners to recover the expenses of defending a suit on a bottomry bond, under the “sue and labor” clauses of certain policies of insurance issued by the respondents upon the cargo of the Julia Blake, from Rio to Now York. On the voyage the vessel put into St. Thomas, where extensive necessary repairs were made, in order to procure which a bottomry bond was given to the Bank of St. Thomas upon hor hull and cargo. The vessel with her cargo uninjured, subsequently arrived in New York. The vessel, freight, and cargo were thereupon libeled for the enforcement of the bottomry bond. Practically no defense in that suit was made as respects the ship and freight. The controversy as regards the cargo was carried to the supreme court. Tlie decisions of this court and of tlie circuit court were there affirmed, and the cargo released on the ground that no communication was had with the owners of the cargo prior to executing the bottomry bond. The Julia Blake, 16 Blatchf. 472; S. C. 107 U. S. 418; S. C. 2 Sup. Ct. Rep. 692.

At first the insurers employed proctors and counsel to defend against the claim on bottomry. They appeared for the owner of the vessel, and answered in behalf of the owner; and also as agent or carrier, in behalf of the cargo. Some months afterwards the libelants, owners of tlie cargo, themselves intervened and answered separately by proctors and counsel of their own; and, after the decree in tlie district court, they represented mainly, if not solely, the interests of the cargo in that suit. The insurance companies had previously agreed to pay any sum which might be fixed by the average adjusters as general average. The, libelants now sue for their expenses and counsel fees in that litigation.

In the present action the respondents have set up in defense the unsoaworthinoss of the vessel when she left Rio, and allege that the policies consequently never attached. As the claim in suit rests upon the stipulations of the policies only, there can be no recovery if the policies never attached, nor became operativo as respects tlie cargo. It is urged that this defense ought not to be regarded as made in good faith, because no such ground was taken in the previous litigation, and because the insurance companies did not act upon that theory; but during the progress of tlie action in the district court, at least, were active in defeating the bottomry bond upon other grounds. Two answers are given to this contention that I think are sufficient. No issue of unseaworthiness would have been material in tlie former action. On the contrary, the more unseaworthy the ship the greater would be her need of repairs at St. Thomas, where the bottomry bond was executed. The facts affecting the question of the seaworthiness of the ship at Rio were not at first known to the insurers. When they were, in a measure, apprised of the facts, the counsel of the insurers stated to the libelants that these facts raised a question concerning their liability as insurers, although not material in the pending litigation. But that merely afforded to the insurance companies an additional ground of defense as insurers of the cargo. Considering the difficulties of establishing that defense before a jury, the insurance companies could not be considered as wholly indifferent whether the claim on bottomry was defeated upon another ground. The assistance of the insurance companies in the former litigation for a time, in np way misled the libelants, or induced them to incur any expense which they would not otherwise have incurred. There is no element, therefore, of estoppel in the case; nor do I find anything in the circumstances that precludes an inquiry into the seaworthiness of the vessel, which is for the first time presented in this suit. On that point the evidence of the master, whose deposition was taken in this suit, but who was not examined in the former suit, is very strong, and shows clearly that the vessel was grossly unseaworthy when she sailed. There are several considerations which suggest a suspicion of great exaggeration in the master’s testimony; but, after making all possible allowances for such exaggeration, the undisputed facts concerning the condition of the vessel when she arrived at St. Thomas, and the absence of any severe weather on her passage, would seem to necessitate the inference that she was unseaworthy when she left Rio. When sailing in only a fresh breeze, as it would appear, first her topmast, and then her cross-trees, gave way and fell down, and portions of the foremast were carried away. The testimony is that they were exceedingly rotten, and many parts of the hull were in a similar condition. Such extraordinary accidents require explanation, or the vessel must he held to have been unseaworthy when she sailed. No explanation was given; and it is- not suggested that a satisfactory explanation through any extraordinary weather, or other cause, could he proved. I am obliged to hold, therefore, that the vessel was unsea-worthy when she left Rio; that the respondents never became liable upon the policies; and, consequently, that they are not answerable for the expenses claimed. The libel is therefore dismissed, with costs.