London Assurance v. Companhia De Moagens Do Barreiro
The respondents herein duly filed their libel in admiralty against the appellant, the London Assurance, in the United States district court for the Eastern district of Pennsylvania, in a cause of marine insurance, to recover upon a policy of insurance issued by the company upon some 33,000 (being part of a cargo of about 80,000) bushels of wheat, of which the respondents were the owners; the 33,000 bushels being valued in the policy at $40,887. The policy was dated December 8, 1890, was issued for $20,000, and covered the wheat when shipped on board the steamer Liscard, at New York, bound for Lisbon, Portugal. There was another policy upon the same wheat as that covered by the policy in suit, issued by another company, for $20,887; the total of the two making up the value of the wheat as mentioned in the policy. The policy now before the court contained the usual language as to the adventures and perils the assurers were contented to bear; among them being 'perils of the seas, * * * and all other perils, losses, and misfortunes that have or shall come to the hurt, detriment, or damage of the said goods and merchandise, or any part thereof.' As representing the policy, the insurers issued what is termed 'its certificate' or 'memorandum,' wherein it was stated that the certificate 'represents and takes the place of the policy, and conveys all the rights of the original policy holder (for the purpose of collecting any loss of claims) as fully as if the property was covered by a special policy, direct to the holder of this certificate.' It certified that on the 8th of December, 1890, the corporation insured under policy No. 427, for Lawrence Johnson & Co. (who were the agents for the libelants), $20,000 in gold on 33,000 bushels of wheat, valued at $40,887, shipped on board the steamship Liscard, at and from New York to Lisbon, Portugal. In the body of the certificate, and directly under the subject of the insurance (33,000 bushels of wheat), stamped in red ink, are the words:

'Free of particular average unless the vessel be sunk, burned, stranded, or in collision.'

On the face of the certificate, and on the right-hand side thereof, and at a right angle with the body of the certificate, the following language is printed:

'It is hereby understood and agreed that in all cases of loss or damage to the interest insured under this certificate the same shall be reported to the corporation in London as soon as known or expected, and be paid in sterling at the offices of the corporation, No. 7 Royal Exchange, London, at the rate of four dollars and ninety-five cents ($4.95-100) gold to the pound sterling. Claims to be adjusted according to the usages of Lloyds, but subject to the conditions of the policy and contract of insurance.'

Immediately underneath, and also printed in red ink, in the following:

'Notice. To conform with the revenue laws of Great Britain, in order to collect a claim under this certificate, it must be stamped within ten days after its receipt in the United Kingdom.'

The certificate is signed by the agents of the company at the Philadelphia agency.

The cargo was received on board the steamship in New York Harbor, and the loading of the vessel had been completed, and she was ready on December 12, 1890, to proceed on her voyage. The lines had been cast off, and the steamer would have then left the dock, but that at the last moment some little derangement to her machinery occurred, and she was temporarily delayed in order to remedy the difficulty, which was accomplished in a very short time,-some few hours. While thus fully loaded and in readiness to proceed on her voyage, a collision occurred, which is thus described by the chief officer, and entered in the log book by him:

At 8:15 p. m. a lighter, being towed out of the dock by the tug George Carnie, ran into us, breaking two plates in the bulwarks, bending stanchions, starting main rail, etc. Anchor watch kept all night.'

The two plates referred to were of iron half an inch thick. The damage to the ship was surveyed before she left New York by one of Lloyds' surveyors, who made a written report in regard to it. The break in the bulwarks caused by the collision was on the port side of the steamer, about abreast of her mainmast. As described by a witness:

'The break was of an irregular shape, and eleven feet six inches long, where the measurements followed in the line of the break. The break was a continuous one in two of the iron plates of the bulwarks.' 'It began a little above a fore and aft line, half way between the deck and the top of the bulwarks, and descended to about eight inches above the deck at its lowest point. For the first two feet, beginning from the forward end of the break, it showed an opening of from one-half an inch to one inch; for the next three feet the break was open one and a half inches; for the next four feet the break was open from one-half to one and a quarter inches, and the after-end of the break for one foot and six inches was open but slightly. A spur extended from about the middle of the break upwards for one foot.'

Another witness said: 'The broken plates showed signs, at the time I examined them, of having been pressed, driven, or pounded together in such a way as to reduce the size of the opening, and the carpenter of the ship stated to me at the time that such had been in fact done. The collision break was in the bulwarks of the vessel, and, in my opinion, as the deck of that ship is arranged, the bulwarks from an important and essential part of the hull of the steamer. In some cases the bulwarks are dispensed with, and an open rail used; but those are cases of flush-deck vessels, the entire length of whose deck stands well out of the water. Such vessels have, as a rule, but a comparatively small portion of their houses, engine rooms, galleys, etc., above deck; but in the case of a vessel like the Liscard, where all her houses are upon the deck, and her main deck is, comparatively speaking, low,-and I mean low as compared with the upper deck of flush-deck vessels, the bulwarks form an important part of, and a protection to, the ship in keeping the water off the decks, and protecting the houses and seamen. * * * Among other things, a large quantity of water in a gale accompanied by high seas would go through the break in the steamer's bulwarks which I inspected, and with the break open to the extent shown in the survey and drawing made by Mr. Candage, many seas which would not be high enough to go over the rail would send a large quantity of water through this break; and, if the storm were extraordinarily severe, would overtax the capacity of the scuppers to relieve the deck. Except in such case of extraordinary weather, the break would be unimportant; it would not render the ship unseaworthy.'

Other witnesses called by the company gave their opinion that the bulwarks were sometimes a detriment to the ship in relation to her safety, as they kept the water on the deck longer than would be the case in their absence; and sometimes that might be a very serious occurrence.

There seemed to be a general agreement, however, among the witnesses that in steamers built as the Liscard was the bulwarks were necessary in heavy weather for the safety of the crew that was working her. The bulwarks are a part of the hull of the vessel, and are built by the shipwright in constructing the hull, and are a part of the design of the vessel when she is modeled. In the class of vessels to which the Liscard belonged the testimony seems to show that the bulwarks are indispensable.

A claim for damages to the amount of $250 was made by the captain of the Liscard, and paid by the offending vessel.

The steamer was detained by reason of the collision, and sailed a couple of days thereafter. She encountered very heavy gales soon after leaving port. The seas continuously swept over her, and finally started the seams in her decks, washed off the tarpaulins which had been placed over the hatches and battened down, and resulted in great damage to the wheat from the sea water pouring over it through the deck seams and hatches of the ship. Her seams opened on account of the excessive straining of the ship, caused by the heavy gales of wind. Some of the water that came on her decks came through the cracks in the plates constituting a portion of the bulwarks already mentioned. After experiencing very heavy weather for a number of days, the high-pressure engine became disabled, and, proceeding then with the low-pressure engine, the captain decided to make for the nearest port, which was Boston. When they arrived at that port, and examined the machinery, it was found that the high-pressure piston had been bent, and the bending was caused by the excessive straining of the ship, caused by her laboring and rolling in the seas. Upon his arrival in Boston, the captain requested a survey to be made, which was done, and the cargo taken out, and a written report and recommendation made. It was found that the wheat had been damaged by sea water in all the holds of the ship; and, after considerable negotiation between the agents of the ship, the owners of the cargo, and the insurers, an agreement was made for the breaking up of the voyage at Boston, and part freight on the cargo was paid the steamer, with the written assent of the insurance company.

The cargo was sold for the benefit of all concerned, and a claim made upon the insurers under the policy, who denied any liability whatever. The owners of the wheat thereupon filed their libel in admiralty in the district court to recover for the loss sustained by reason of the facts above mentioned. The district court gave judgment in favor of the owners of the wheat (56 Fed. 44), and referred it to a commissioner to assess the damages, who adopted a rule for the adjustment of the loss, which is referred to in the following opinion. The company appealed to the United States circuit court of appeals for the Third circuit, which court affirmed the judgment of the district court. 28 U.S. App. 439, 15 C. C. A. 379, and 68 Fed. 247. The insurance company then applied to this court, and obtained a writ of certiorari to review the judgment.

W. W. MacFarland, for appellant.

John F. Lewis, for appellee.

Mr. Justice PECKHAM, after stating the facts in the foregoing language, delivered the opinion of the court. 

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