Lee v. Barreda

16 Md. 190, 1860 Md. LEXIS 61

• Court: Court of Appeals of Maryland
• Decided: June 21, 1860
• Status: Published

Opinion

Baiitol, J.,

delivered the opinion of this court:

This case was decided by the Superior court of Baltimore city, upon an agreed statement of facts, (for which see ante., 191 to 194.)

The appellant, who was plaintiff below, recovered a judgment for ¡jj>43.99, the balance conceded to be due him according to the account of the appellees; he claiming to recover a much larger sum, has prosecuted this appeal, which presents for our decision the single question, whether the appellees were entitled to be reimbursed out of the proceeds of the sale of the vessel at Callao, for the advances made by them to the master, in conformity with the provisions of the charter-party?

In the case of Atwell & Appleton vs. Miller, 11 Md. Rep., 348, this court, adopting the opinion of C. J. Parker, in Griggs, et al., vs. Austin, 3 Pick., 20, declared the law to be settled, “that freight is the compensation for the carriage of goods, and if it be paid in advance, and the goods be not carried, by reason of any event not imputable to the shipper, it is to be repaid; unless there be a special agreement to the contrary. ’ ’

In this case there is no evidence of any special agreement to vary the general rule. The single circumstance relied on by the appellant, for the purpose of showing that the money, so paid, was to be “irreclaimable in any event,” by the appellees, is that they effected insurance in their own names and on their own account, upon the said advanced amount, “as for advances on freight to be considered as freight,” which it is contended they could not legally do, if the amount so advanced by them was to be repaid in ease the voyage should not be performed; because, it is said, in that case they would have no insurable interest.

In 2 Parsons Maritime Law, 87, 88, the author says: “A charterer may insure any advances he makes, if they remain at his risk, and are not repayable by the owner in case of loss. But one advancing money on freight has no insurable ' interest, if the money so advanced is to be repaid to him, if the goods do not arrive.” The same principles are stated by the same author, in his excellent work on Mercantile Laxe, page 419, and a reference to the cases cited by him will show that the principles are correctly stated.

There can be no doubt that if advances be made by the charterer on freight simply upon the personal credit of the owner, who is bound to repay the same as a debt “independent of the issue of the voyage,” the charterer would have no insurable interest in the amount so advanced as freight.

In the case of Atwell & Appleton vs. Miller, 11 Md. Rep., 348, one of the questions was, whether the shipper who advanced the freight, was entitled to recover it back, the voyage not having been performed? It was contended that there was á special agreement, by which the money so paid, was to be at the risk of the shipper, and not reclaimable by him in the évent of the voyage not being performed, and this court decided that the fact of an insurance on the freight being effected by the shipper was evidence proper to go the jury as tending to prove such special agreement; because, in the absence of such special agreement, the shipper in that case Would have had no insurable interest in the freight. But in the case before us, the fact that the appellees effected an insurance furnishes no ground, whatever, in support of the appellant’s claim. Such insurance was not inconsistent with the right asserted by the appellees to reclaim the money advanced by them out of the proceeds of the sale of the vessel at Callao. Notwithstanding such right on their part, they had an insurable interest to the extent of their advances, which it was competent for them to insure as freight. By the true construction of this charter-party, these appellees had a lien upon the freight for their advances, which gave them an insurable interest.

■ In Phillips on Ins., Vol. 1, sec. 338, it is said: “But if the owner is absolutely chargeable with the advance, and liable for the same as a debt, independent of the issue of the voyage, then no insurable interest accrues to the charterers therefrom, any more than from any other demand he may have against the owner; except that if the charterer by the construction of the charter-party is entitled to a lien on the stipulated charter money, and has the right to retain the same, to the amount advanced, he has an insurable interest on account of such lien, to such amount, just as a lender on mortgage or bottomry, or any other party having a lien, has such an interest.”

See, also, Robbins vs. N. Y. Ins. Co., 1 Hall, 327, where it is correctly stated that such a lien gives the charterer an interest which he may insure in general terms under the name of freight, without describing it as a mortgage interest.

It is unnecessary for us to express any opinion upon the effect of the captain’s receipt, or his power, under the charter-party, to pledge the ship and appurtenances for the repayment of the freight advanced. The terms of the charter-party, by which the appeellees had the right to retain the amount advanced, out of the freight, gave them a lien on the freight, which they might insure; notwithstanding they had a right to reclaim the amount upon a failure of the voyage. Their right to retain the funds received at Callao, out of the proceeds of the sale of the vessel, does not necessarily depend upon any lien on the vessel; but rests upon their right to reclaim the money advanced, from the owner; and to apply to its payment, by way of set-off’, any money which came to their hands belonging to him. In the opinion of this court, the appellant is not entitled to recover either the sum of 01702, received by the appellees from the auctioneer at Callao, nor the sum of 0150, which had been received by the appellees for their services, as consignees, rendered at Callao. This latter sum the appellees were entitled to receive by the stipulations of the charter-party; and besides it is one of the admitted facts in the case, ccthat they have paid to their agents in Callao, more than 0150 proper and usual charges for the transaction of the business of the ship at Callao on the occasion, and in consequence of her putting into that port and being sold.” This fact of itself furnishes a sufficient answer to the claim of the appellant for the $150. The claim of the appellant for a return of the 12 per cent, premium on $1702, was conceded by the appellees and allowed in their account, amounting to the sum of $204.24. From this amount was deducted interest on the sum advanced. We think the interest is properly charged in the account. The contract for the transportation of the guano was an entire contract, and the consideration for the payment of the advance having failed, the appellees were entitled to reclaim the sum advanced with interest from the time the advance was made.

(Decided June 21st, 1860.)

Judgment affirmed.