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from a different cause, and at a different place. Marsh. Ins., supra; 2 Arn. Ins. 795; McArthur, Ins. 285; 1 Pars. Mar. Ins. 630, 631. It is true that Mr. Parsons criticises the grounds upon which this construction rests, and, while stating that it is the established law of England, suggests that some question exists whether the same construction would be given to the clause in this country. There has been, however, no American decision in conflict with the English doctrine; and a departure from that principle by our courts, we think, would be unwise. As was said by Mr. Justice Gray in Norrington v. Wright, 115 U. S. 188, 206, 6 Sup. Ct. 12: "A diversity in the law, as administered on the two sides of the Atlantic, concerning the interpretation and effect of commercial contracts of this kind, is greatly to be deprecated."

Moreover, if the parties to a contract of insurance mean that the insurer shall be liable for partial losses only when they are occasioned by the specified casualties, nothing is easier than to give expression to that intention. Thus, we find from the evidence that in Philadelphia, where this insurance was effected, marine underwriters employ two different clauses respecting particular average losses, to vary the risk as may be agreed on. One of these clauses is that used in this instance; the other is in these words: "Free of particular average unless caused by stranding, sinking, burning, or collision." It cannot be doubted that the parties to the contract in suit intelligently adopted the form which omits the "caused-by" limitation.

It is a sound principle of interpretation that words whose meaning has been defined by the law or fixed by judicial decision will be presumed to have been used in that sense. 2 Pars. Cont. *501, note t; Doebler's Appeal, 64 Pa. St. 9, 15. That principle should have full sway here. If this is not to be regarded as a contract subject in all respects to the law of England, by reason of the fact that the policy and certificate were issued in Philadelphia by a local agency of the insurance company, still the company is an English corporation, and the certificate of insurance provides that any loss "shall be reported to the corporation in London," and shall be paid there, and that claims shall be adjusted according to "the usages of Lloyds"; and the certificate contains a notice that "to conform with the revenue laws of Great Britain," in order to collect a claim thereunder, "it must be stamped within ten days after its receipt in the United Kingdom." Now, the words here involved are the words of this corporation, and it may reasonably be assumed that they were used in the sense given to them by the English law. Furthermore, if an exception in a policy of insurance be capable of two interpretations equally reasonable, that one must be adopted which is most favorable to the insured. Insurance Co. v. Cropper, 32 Pa. St. 351; First Nat. Bank v. Hartford Fire Ins. Co., 95 U. S. 673, 679. In the latter case the court said in reference to the insurance company:

"It is its language which the court is invited to interpret, and it is both reasonable and just that its own words should be construed most strongly against itself."

From whatever point of view, then, the subject is regarded, we think that the court below was right in construing the particular average clause of the contract in accordance with the English doctrine.

Was, then, the Liscard "in collision," within the meaning of the contract of insurance? We think that she was. Undoubtedly, in an admiralty sense, there was a collision, notwithstanding the fact that the Liscard was at rest and moored when she was run into. The Granite State, 3 Wall. 310.

Now, with respect to stranding, Mr. Parsons (1 Mar. Ins. 632) says: "Both in England and in this country it seems to be settled that, if the ship be literally stranded, that is enough, without much reference to the length of time that she remains on shore, or any regard to the effect of this stoppage."

Thus, in Harman v. Vaux, 3 Camp. 429, Lord Ellenborough, C. J., said:

"If the ship touches and runs, the circumstance is not to be regarded. There she is never in a quiescent state. But if she is forced ashore, or is driven on a bank, and remains for any time on the ground, this is a stranding, without reference to the degree of damage she thereby sustains."

Certainly, the same effect must be given to the particular average clause, whether the case before the court be one of stranding or of collision. The two casualties are alike, in that all the evil effects to a vessel from the disaster oftentimes are not at once evident. In this instance there was an actual collision, resulting in substantial injury to the vessel. True, the injury was not such as to affect the seaworthiness of the ship. She was still in a fit state to encounter the ordinary perils of the contemplated voyage. The particular average clause, however, is silent as to the extent of the injury to the vessel. The words "unless the vessel be * * in collision" exclude other conditions. Therefore, also, it is immaterial whether or not the collision contributed to the ultimate partial loss to the cargo. The very purpose of the clause, all the adjudged cases declare, is to exclude such an inquiry, which always is attended with difficulties, and often must end in uncertainty. Upon this very point there is here a conflict of proof. There is some evidence tending to show that, during the tempestuous weather the Liscard encountered, some water did come on deck through the broken plates in the bulwark, and reached the cargo; and at least one seafaring witness, of great practical experience, expresses the opinion that a large quantity of water in a gale, accompanied by high seas, would go through the break in the ship's bulwark caused by the collision. But it is not necessary to determine the question whether any damage to the wheat was due to the break. The fact of collision, like the simple fact of stranding, fulfills the condition of the particular average clause, which then ceases to have any operation. The circumstance that the collision occurred before the Liscard actually started on her voyage is of no moment. The insurance had attached before the collision. That is the decisive fact. By the terms of the contract, the adventure with respect to the wheat began as soon as it was put

on board the vessel. The effect of the collision, then, under the particular average clause, was the same as if it had taken place in mid-ocean.

The views we have expressed are entirely harmonious with the rulings in Roux v. Salvador, 1 Bing. N. C. 526, and Insurance Co. v. Pitts [1893] 1 Q. B. 476, cited by the appellant. In the former of these cases the stranding did not occur until after the hides had been landed and sold, and the risk of the underwriters thereon had thus ceased, by the act of the insured. In the latter case, at the time of the stranding of the ship, the maize was not on her, nor at her risk at all. Indeed, the ship's voyage, with respect to the maize, began afterwards. In each of these cases the court recognized the binding authority of Burnett v. Kensington,


In Insurance Co. v. Pitts, which was decided so late as the year 1893, Collins, J., said:

"If the stranding takes place within the time contemplated by the parties, the insured can recover in respect of a particular average loss, whether the damage can be traced to the particular stranding or not."

Nor do we think that our conclusion that the Liscard was "in collision," within the meaning of the contract in suit, is inconsistent with the ruling in the case of The Glenlivet, Prob. Div. (1893) 164; same case, on appeal, Prob. Div. (1894) 48. There the English court of appeal, in affirming the judgment of the trial judge, without approving his reasoning, decided merely that where slight fires occurred in the coal in the bunkers of an iron ship, which were put out by pumping water on the coal, and some injury was done by the heat to the ship's plating and otherwise, the ship was not "burnt," within the meaning of that term, as used in the memorandum in the policy.

We pass now to the consideration of the question of the adjustment of the loss. This matter is thus presented in the appellant's second specification of error, namely:

"(2) The commissioner reported that the voyage was broken up at Boston, for the benefit of all concerned, including the underwriters; that the libelant's adventure was practically frustrated, and therefore justifiably abandoned; that, if the cargo had been reshipped to Lisbon, the loss would have been much greater than it has proved, and the underwriters worse off than now, and that they would have been obliged to pay the difference between the price for which the damaged grain sold and the value of sound grain in Lisbon proportioned to the valuation in the policy; that the amount they would have been called upon to pay would have been greater than the difference between the value of the cargo, as stated in the policy, and the amount for which it was sold in Boston. And the commissioner reported that the respondent was liable for this difference, and adjusted the loss under the policy as a salvage loss, instead of as a particular average. The respondent excepted to these several findings, and to this adjustment of the loss, and to the commissioner's refusal to adjust the loss as a particular average, with Boston as the port of the destination, and the sales made there as determining the percentage of deterioration for which the underwriters were liable. The court overruled the exception, and the respondent specifies such action of the court as error."

We have carefully examined the evidence and the legal authorities cited, and are not convinced that the commissioner erred either in his findings of fact or in his method of estimating the loss on the cargo. The breaking up of the voyage and the sale of the cargo at the port of distress were not for the benefit of the insured solely. What was thus done was really for the advantage of all persons interested, including the underwriters. As we have already seen, the wheat was all more or less damaged. Now, it appears that the condition of affairs in Portugal with respect to the importation of wheat is peculiar, and that damaged grain is unsalable there. The finding of the commissioner is that the Liscard's wheat would have been almost valueless at Lisbon. The evidence certainly warrants the conclusion that the loss to the appellant would have been greater had the cargo gone on to Lisbon. We agree with the commissioner and the court below in the view that the adventure was practically frustrated, and hence justifiably abandoned; and that, under the special circumstances, the sale of the wheat at Boston may fairly be considered to have been made from necessity for the benefit of all concerned.

Mr. Parsons (2 Mar. Ins. 411) says that, if a ship at an intermediate port finds a part of its cargo so injured by sea damage that it is unfit to be carried on, it may be sold at that port, and the loss adjusted as a salvage loss.

Mr. Phillips (2 Ins. § 1480) says, speaking of an adjustment as upon a salvage loss:

"The underwriter is liable for such an adjustment of a particular average only in cases where the sale at an intermediate port is obviously expedient, and made on account of damage by the perils insured against; where, if the subject were forwarded to the port of destination, it would be greatly diminished in value, or be of no value, on arriving there."

We think that the present case falls within the rule even as thus laid down, and that the appellant is justly chargeable with the difference between the valuation in the policy and the sum realized by the sale, and that the adjustment upon that basis was correct.

The specifications relating to some allowances under the sue and labor clause of the policy do not require extended discussion. We have looked into these matters, and our judgment is that the appellant has here no reasonable cause of complaint. Nor do we discover that any injustice was done to the appellant in the allowance of interest from December 15, 1891, on the libelants' claim.

We see no error in the conclusions of the district court, and therefore its decree is affirmed.



(Circuit Court of Appeals, Second Circuit. May 28, 1895.)


Exceptions in a bill of lading of injuries arising from "latent defects in hull," etc., include a latent and undiscovered defect in a rivet which existed at the commencement of the voyage, and therefore limits the implied warranty of seaworthiness, if due diligence has been exercised. 63 Fed. 266, affirmed.


The act which prohibits owners of vessels transporting merchandise to or from ports of the United States from limiting by bill of lading or otherwise their obligation to exercise "due diligence properly equip, man, provision, and outfit said vessel, and to make said vessel seaworthy and capable of performing her intended voyage" (Act Feb. 13, 1893, § 2; 27 Stat. 445), does not prevent the owner from relieving himself from the rigidity of the implied warranty of seaworthiness by stipulating against liability for loss by latent defects, provided he uses due diligence at the commencement of the voyage to make the vessel seaworthy.

Appeal from the District Court of the United States for the Eastern District of New York.

These four libels against the steamship Carib Prince were filed respectively by Josephine W. Wupperman, Clifford L. Middleton and others, Manuel Cardenas and another, and William Gillespie and others, to recover for damage to cargo. The district court dismissed the libels. 63 Fed. 266. The libelants appeal.

George A. Black, for libelants.

J. Parker Kirlin, for respondents.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

SHIPMAN, Circuit Judge. These four actions were brought by cargo owners to recover from the British steamship Carib Prince the damages which a part of her cargo received on a voyage from Granada to New York, which commenced about August 31, 1893. The bills of lading, which were signed in Trinidad, a port governed by English law, excepted the ship from liability for injuries arising from "latent defects in hull, tackle, boilers, and machinery." The vessel was a new steel steamer, of 2,500 tons dead weight capacity, built in the spring of 1893, at Sunderland, England, by experienced builders. She was "constructed with a water tank of iron in her peak, one side of which was formed by a bulkhead. The tank, when she sailed from Granada, was empty, but during the voyage from Granada to New York it was filled with water one afternoon, in order to trim the vessel," and the next morning, or the morning after, the tank was found partially empty, and investigation showed that the head had come off from one of the rivets riveting the side of the bulkhead next to the hold, and leaving a hole through which

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