This is a writ of error to the Circuit Court of the United States for the district of Maryland.
The suit was brought by the plaintiff below upon a policy of insurance covering a quantity of coffee laden or to be laden on board the 'good vessel or vessels' from Rio de Janeiro to any port in the United States, 'to add an additional premium, if by vessels lower than A 2, or by foreign vessels.'
The policy contained the following clause in respect to premiums: 'Having been paid the consideration for this insurance by the assured, or his assigns, at and after the rate of one and one-half per cent., the premiums on risks to be fixed at the time of endorsement, and such clauses to apply as the company may insert, as the risks are successively reported.' The policy bears date 27th July, 1855. The company subscribed at the execution $22,500 as the amount insured.
On the 30th July, 1855, the policy was altered by agreement of parties by striking out the words, 'vessels not rating lower than A 2,' as it originally stood, and inserting the words now in the instrument, namely, 'an additional premium, if by vessels lower than A 2, or by foreign vessels.'
On the 4th January, 1856, the company subscribed an additional sum of $15,000, and on the 19th April following the sum of $25,000.
Premium notes were given at the time the different sums were subscribed, at the rate of premium mentioned in the body of the policy.
The agent of the company at Baltimore, who negotiated this insurance, the defendants being a New York company, states that when applications are made to enter risks on running policies, they are endorsed at once by him, and the report of such endorsement transmitted to the company in New York, which names the premium, and this is communicated to the assured; that the premiums specified in the body of the policies are nominal, and the true premiums to be charged are fixed by increasing or reducing the nominal premiums when the risks are reported; and that the nominal premiums taken on the delivery of a running policy are returned, if no risks are reported.
In the latter part of August, 1856, the plaintiff applied to the agent at Baltimore for an endorsement on the policy of the coffee in question, laden or to be laden on board a vessel called the Mary W., from Rio de Janeiro to New Orleans, which application was communicated to the company, in order that they might fix the premium. The company at first declined to acknowledge the vessel as coming within the description in the policy, on account of her alleged inferior character and unfitness for the voyage; but the plaintiff insisting upon the seaworthiness of the vessel, and his right to the insurance within the terms of the policy, the company fixed the premium at ten per cent., subject to the conditions of the policy, or two and one-half per cent., as against a total loss. This rate of premium the plaintiff refused to pay.
The coffee was shipped on the Mary W. at Rio de Janeiro for New Orleans, on the 12th July, 1856, at which period she started on her voyage, and was lost on the 29th of the month upon rocks, the master being some seventy miles out of his reckoning at the time.
Evidence was given on the trial, on the part of the company, tending to prove that the Mary W. was rated below A 2, and even that she was unfit for a sea voyage, being originally intended, when built, in 1846, as a coasting vessel, and prayed the court to instruct the jury, that if they find from the evidence the vessel, at the time of the application for the endorsement of her cargo upon the policy, was rated in the office of the company and other offices of underwriters in New York lower than A 2, and being so rated, the company offered to make the endorsement at the premium fixed by them, and that on the premium being communicated to the plaintiff, he refused to pay it or assent thereto, then he is not entitled to recover, which prayer was refused; and the court thereupon instructed the jury, substantially, that the plaintiff was entitled to recover for the loss, so far as the rate of premium was concerned, upon deducting such additional premium to the one and one-half per cent., as in the opinion of underwriters may be deemed adequate to the increased risk of the coffee shipped in a vessel rating below A 2.
The jury rendered a verdict for the plaintiff.