author: Seidell, J.

text:
    Paradise, Lawrason & Co. v. Sun Mutual Insurance Co. The Same v. The New Orleans Insurance Co. The Same v. Nashville Marine and Fire Insurance Co.
    In an action on a policy of insurance, where the defence is, that the loss was occasioned by the barratry of the master, he is a competent witness for the plaintiff. The objection goes only to his credibility.
    The question of whether a witness would believe another witness, who had testified, on oath, cannot be put, unless a knowledge of the general reputation of the witness sought to be discredited, is first proved by the witness interrogated.
    Testimony of previous statements of a witness, different from his testimony, cannot be introduced, without having given the witness an opportunity of accounting for the contradiction between bis previous statements and his testimony.
    Where A. B. & Co. have effected an insurance in their own name, for the benefit of whom it may concern, and it appears to have been their intention to have insured for the benefit of another person, they will not be allowed to recover on the policy in their own right, although they may have become interested, by assignment, in the property insured.
    The assignee of a policy of insurance, takes only the rights of the assignor; and cannot escape the consequences of a defence of barratry, which would have prevailed against the assignor.
    Where, from the circumstances of the case, a policy is indivisible, and there is a good defence against one of the parties interested in it, the other cannot recover on it.
    Where the owner of a vessel, who has himself supplied the cargo, effects an insurance upon freight, in case of loss, he can recover, not the profits he might have made, but the usual and reasonable rate of freight for the voyage at the port of departure.
    from the Fourth District Court of New Orleans, Strawhridge, J.

      J. Finney, C. Roselius and R. Hunt, for plaintiffs.

      Benjamin, and Micou,

      Grymes and Maybin, for defendants.
   The judgment of the court was pronounced by

Seidell, J.

The above-mentioned suits, which, by consent of parties, tried together before a jury, are on three policies of insurance, executed by the defendants in favor of Paradise, Lawrason ¿j- Co., “ on account of whom it may concern.” One by the Sun office, to the amount of $15,000, on freight of the ship Russia; another by the New Orleans office, on said freight, to the amount of $7000; a third by the Nashville office, on the ship Russia, to the amount of $12,000. The perils taken upon themselves by the underwriters are, among others, “barratry (except embezzlement or theft) of the master, unless the insured be an owner of the vessel.”

There was a verdict for the plaintiffs in the court below, for the full amount of each policy. A new trial was refused by the district judge, and the defendants have appealed. The ship and cargo were destroyed by fire after the inception of the voyage. The principal ground of defence urged in argument is, that the Russia was barratrously set on fire by the captain ; and so the defendants are discharged, the policy excluding the liability of the underwriters for barratry of the master, if the insured be owner of the vessel. Much of the argument was also directed to impeaching the good faith of Knapp, the owner of the Russia.

Before noticing the merits of the .cause, it is proper to act upon certain bills of exception, taken by the defendants, to the admission of evidence. The first bill of exceptions is, to the competency of Wilson, the captain of the ship, “ on the ground of interest, inasmuch as the defence rests on the charge of barratry and deviation against the said witness, while acting as master of said ship Russia ; whereof the owner, Knapp, is a party in interest with the plaintiff herein.” The authorities upon which the defendants rely to support this bill are, 2 Starkie, 652, Edit. 1837, citing two decisions of Lord Kenyon in 1 Esp. 339, and 6 Esp. 27. 1 Greenleaf on Evidence, 439. 5 Bos. and P. 374. 13 L. R. 213. Some other cases are cited, which seem not sufficiently relevant to require particular notice.

The doctrine enunciated in Nicholson v. Patton, 13 L. R. goes to this extent, that an agent cannot be a witness for his principal, in an action brought against his principal on account of the negligence of the agent. The case in 1 Espinasse, was an action to recover the loss on a policy of insurance on ship and goods, at and from the Bahama islands to Liverpool. The loss was charged to have occurred by barratry £>f the captain, for which risk the underwriter was liable. The barratry alleged consisted in taking the ship out of her course to chase and capture vessels, and afterwards to Bermuda, where she was lost. The underwriter, the defendant in the cause, called the captain as a witness, to prove that this was done by the consent and with the knowledge of the owners. It was held, that he was incompetent, without a release from the underwriter, upon the ground that he was interested to defeat the plaintiif. If the plaintiff obtained a verdict, the defendant might have his action against the captain, the loss having arisen from barratry, which was his act.

The case in 6 Esp. we have not been able to refer to. In the paragraph of Mr. Greenleaf’s work above cited, he - speaks, among other cases, of the incompetency of a shipmaster, in an action by his owner against underwriters, where the question is, whether there has been a deviation ; and says, he is incompetent to give testimony, the direct legal effect of which will be, to place himself in a situation of entire security against a subsequent action. lie cites the case of Dr. Simonds v. De La Com. 5. Bos. and Pul. The opinion of Chief Justice Mansfield upon the point, is an obiter dictum.

It seems to us, that the question to be examined, in testing the competency of captain Wilson, is, whether it be true that the success of the plaintiff, who offered him as a witness, would place him in a situation of security against a future action. Now. this question must necessarily be answered in the negative. For although, if the plaintiff succeeds, he will have no action against the captain, yet the defendant would not be estopped by the judgment in this cause from proceeding against the captain, and recovering from him a full indemnity for the amount paid under judgment to the plaintiff, upon proving that the captain had barratrously destroyed the vessel. Whatever, therefore, be the result of the cause, the door of litigation against the captain remains open.

There is another view of this matter, which seems to us important, and that is, the necessity of the case, where the loss occurs at sea. To whom can the assured resort, for proof of the circumstances of the vessel’s navigation and loss upon the ocean, but to those on board of her, who are his own employees ? And if we exclude the captain, we exclude the person, of all others on board, who by reason of his nautical skill, the control he exercises, and the nature of his duties generally, is to be supposed best capable of giving accurate information upon the subject of the voyage. We may add, that under the usages of commerce, the testimony of the captain, on the subject of the loss, in the form of a protest, is uniformly required from the owner by the underwriter, as preliminary proof; and there seems an inconsistency, in refusing to hear him afterwards on the witness stand. We are therefore of opinion, that the district court did not err, in permitting Wilson to testify as a witness for the plaintiffs. See also the opinion, upon the same point, of the Supreme Court of Ohio, in Howell v. Cin. Ins. Co. 7 Hammond, 283. We have considered this question of competency, with reference to the pecuniary interest of Wilson, which is the sole light in which the matter is to be regarded, in acting upon the bill of exception. So far as his feelings and reputation are concerned, he is unquestionably interested in the success of the plaintiffs. A cloud is cast upon his character, which a verdict for the plaintiffs might dissipate. But this consideration goes only to his credibility.

The next bill of exceptions is in these words: “ Be it known, that on the trial of this cause, the counsel for the plaintiffs asked several of the witnesses, whether they would believe on oath Eliza Harris, Josephine Chambers aud Margaret Ross, witnesses for the defence. The counsel for defendants objected to the question, on the ground that the opinion of a witness, as to the credibility of another, was inadmissible ; that it allowed the witness to usurp the functions of the jury; that it was the introduction of a collateral issue, rendering necessary the summoning of a fresh array of witnesses, whose opinions might, in turn, be attacked and defended ; that it was allowing vent, in a court of justice, for feelings of personal spite and malice, was not an inquiry of fact, and was subversive of the good order of judicial proceedings. But the court overruled the objection, allowing the question, &c.”

It will be observed, that the bill of exceptions does not show, that the question was put without previous inquiry, touching the general reputation of the persons in question. Where these preliminary inquiries have been made, we have' no doubt, that the question we are considering may be put. It is not to be supposed, that jurymen are personally acquainted with the character of all the witnesses that come before them ; and when they are called to find out the truth, by means of the testimony presented to them, it is indispensable, for the purposes of truth, that they should know how far portions of that testimony are entitled to credence. The inconvenience suggested, is a serious one ; but the exclusion of necessary information from the jury, would be a much greater evil.

The next bill of exceptions is in these words : “Be it known, that on the trial of this cause, the counsel for the plaintiffs offered in evidence the testimony of Charles JRedfield, as taken under commission, and annexed to, and made part of, this bill of exceptions, for the purpose of attacking the testimony, and impeaching the credibility, of the witness Dunlap, by showing that he had made to said JRedfield, statements of the facts relating to the loss of the Russia, different from those by him made on the trial;.to the introduction of which testimony, the counsel for defendants objected, on the ground that this mode of attacking and impeaching the credibility of a witness, was inadmissible, unless the witness thus attacked had been himself interrogated, as to the facts of his making such contradictory statements, and an opportunity given him of accounting for the contradiction. But the objection was overruled, and the evidence admitted, &c.” We think, the objection should have been sustained. See the Queen’s case, 2 Brod. and Bing, 313. Greenleaf on Evid. § 462. Fletcher v. Fletcher, 5th Ann. 408.

The fifth bill of exceptions was taken to the admission, in evidence, of certain documents, being a power of attorney given by Knapp to Paradise, Lawrason <$• Co., an assignment of the freight list of the Russia, certain acceptances, &c., which will be noticed more particularly hereafter, upon the ground of irrelevancy to the issue, and inadmissibility under the pleadings. We think, the objection was properly overruled.

Paradise, Lawrason Co., in their petition, say, that they sue on their own account, and for the use of Frederic H. Knapp. They allege, the execution of the policy by the defendants, on the freight of the Russia, and that they were, at the time of its execution, and from thence, until and at the lime of the loss, interested in the freight, to an amount of $25,280 77. That Knapp was at said date, and thence, until the time of the loss, the owner of the Russia, and of the freight, and interested therein, subject, nevertheless, to the interest of Paradise, Lawrason 4- Co.; and the insurance was effected for their own use, to the extent of their said interest, and for the remainder, for the use and benefit of Knapp, by whom they, Paradise, Lawrason Sf Co.-, were duly authorized to act in the premises.

The plaintiffs contended, in the court below, and here, that if the ship was destroyed by the barratry of the master, it did not affect the right to recover, so far as their interest was concerned, but was only available to the underwriters quoad the interest of Knapp.

On the other hand, it is contended by the defendants : First, that Paradise, Lawrason Sf Co. are not insured by the policy; and this proposition they rest upon two grounds : first, that Paradise, Lawrason &¡ Co. had no insurable interest in freight, which is the subject of the policy ; secondly, that even if they had an insurable interest in freight, they did not insure themselves in point of fact. They also contend, that even if they are insured, under the circumstances of the case, and the. terms of the policy, for their own interest, they cannot recover, unless Knapp could, because the policy is indivisible. Before considering this proposition, it is necessary to notice the relations which existed between Paradise, Laiorason 8f Co. and Knapp, before and'af the date of the policy.

In 1849, at which time there was great excitement on the subject of California, attracting thither crowds of emigrants, and exciting, also, in an extraordinary degree, a spirit of mercantile adventure, the plaintiffs and Dr. Knapp became jointly interested in the ship Dalmatia; and despatched her to California, on joint account, in the month of October. Knapp and the plaintiff also shipped cargo in her, for joint account. In November, he purchased the Russia at the price of $16,000; paying $9000 in cash, and the residue in his note at ten months. In the same month, Paradise, Latorasori 4" Co. accepted, for his accommodation, his seven bills, for a total sum of $19,000, at ten months ; and, in the following January, they accepted, in like manner, for him, another bill for $5000. At the date of these nine acceptances, a written contract was signed by Knapp and Paradise, Lawrason 4* Co., in which, after reciting their acceptance for his accommodation, and their understanding, that he was to furnish Paradise, Lawrason 4" Co. the means of taking them up at maturity; he, to secure them, assigns to them his half interest in the freight list of the Dalmatia, then on her voyage to California; his half interest in all goods shipped per the Dalmatia, on joint account, and in their proceeds, and all his interest in all policies taken out by Paradise, Lawrason 4' Co., for joint account, on the Dalmatia, her freight and cargo. “Also, the freight list of the ship Russia, about to sail from this port to San Francisco, California; also, all my interest in and to all policies of insurance to be taken out on the said ship Russia, her freight list, proceeds of cargo, if any should be shipped on her, on my own account,” &c. All which proceeds, or the balance thereof, “after paying the said drafts, are to be paid over to me by the said Paradise, Lawrason 4* Co., who hereby accept this assignment, with its conditions, by signing the same.”

On the same day, Knapp executed, in favor of Paradise, Lawrason 4* Co., an instrument, by which he constitutes them his agents, to act for him in all mercantile transactions in California, which may arise out of any shipments of goods already made, or to be made to that country; to dispose of the goods and collect proceeds; to collect freights of any vessel he may consign to them there; and, generally, to manage and protect his business and interests in California. In consideration of the mercantile services of his agents, he agrees to pay them ten per cent on the whole of the freight list of the Dalmatia, excluding property shipped on joint account; on proceeds of stores and articles shipped on board the Dalmatia, on joint account, if sold, ten per cent; on proceeds of the Dalmatia, if sold, five per cent. He also agreed to pay the usual commissions charged in New Orleans, on the entire freight list of the Russia, then being loaded and consigned to Paradise, Lawrason Sf Co., in the port of New Orleans, as well ns on the whole cargo, including that which might be shipped by him on his own account; the Russia to be consigned to Paradise, Lawrason &f Co., or their substitutes, at San Francisco. It was further stipulated, that in case of loss, or partial loss, of either the Dalmatia or the Russia, Paradise, Lawrason &f Co. were to be paid “‘five per cent for settling insurance, according to custom.”

On the 24th January, 1850, a notarial act was signed by Knapp and Paradise, Lawrason 4‘ Co., in which he acknowledges, that they have accepted, for his accommodation, his bill for $5000, at nine months from the 22d of January, and that he is to furnish means to take it up at maturity. He refers to the agreement of the 27th of November; and places this bill “in the same position as the seven others, by which the said acceptors will be secured by the assignment and sureties, contained and set forth in the said private agreement.”

The policies in these cases were, as we have already said, in the name of Paradise, Lawrason 4* Co., “for account of whom it may concern,” on ship and freight, to the amount of $34,000. There were two other policies oft freight in the Tennessee office, for a total amount of $20,000. On the 1st of February, the plaintiffs addressed a letter to their New York correspondent, desiring him to effect insurance on merchandise, for account of F. H. Knapp, loss, if any, payable to Paradise, Lawrason Sf Co., to amount of $25,000. The vessel sailed on the 5th, and was lost on the 7th of February. The acceptances were taken up at maturity by the plaintiffs. During the lading of the Russia, the plaintiffs, as Knapp’s agents, made cash advances, in the ship’s business, to the amount of $2000 and upwards. In the account of Knapp with the plaintiffs, they charge him the premiums paid for insurance, and credit him with the amount of $15,000 received on compromise from, the Tennessee office, on the 15th May, 1850.

It thus appears, that Paradise, Lawrason Sf Co. had come under heavy advances of their credit and cash, upon the faith of the expected freight list, of which a formal assignment was made to them for the purpose of securing them; and which freight, as assignees, as well as in their capacity of agents and consignees, they had authority to control and collect. As such assignees for a valuable consideration, their interest subsisting at the date of the policy, and down to the time of the loss, they must be considered as having an insurable, interest in the freight, the subject matter of the insurance.

We incline to the opinion, that a policy on freight, eo nomine, may be considered as covering such an interest as is above described, although the question is not, perhaps, free from difficulty, as Paradise, Lawrason Sf-Co. did not hold either the legal or equitable title of the ship. But assuming that the interest of Paradise, Lawrason &¡‘ Co. in the freight might be covered by an insurance on freight eo nomine, the question remains, whether that interest was in point of fact covered by these policies; and this question must be determined by ascertaining their intention.

At the argument, we had doubts whether'this point of the defence could be maintained; but we are of opinion, from our subsequent examination of the evidence in the cause, that it was not their intention to insure their own interest, but the interest of Knapp. We consider this as resulting from the fair interpretation of the terms of the assignment, which contemplated that they should effect insurance for him, and hold the policies so to be effected, for their security, collecting the amounts insured, in case of loss, and-crediting it to him in account, when collected; from the stipulation in the power of attorney, allowing them five per cent for collecting the policies; from the fact, that they have charged him with the entire premiums of insurance, and credited him with the whole amount collected; from the language of their letter of, the 1st February, 1850, ordering insurance on cargo'“for account of Knapp,.loss,-if any, payable to Paradise, Lawrason Sf Co.;” which cargo, under the written agreement, stood on the same footing of assignment and security as the freight list. Some of these facts standing isolated and alone, might not, perhaps, suffice to establish the intention of the plaintiffs. But all the evidence construed together, justifies the conclusion, that the policies were intended to cover Knapp’s interest, and, as such, to be held by Paradise, Lawrason S¡■ Co., for their security under the assignment. Knapp, therefore, must be regarded as the assured, and Paradise, Lawrason fy Co. as the assignees of the assured.. As such assignees, they take his right under the policies, and cannot be permitted to escape from the liability of barratry, upon the ground that they had insured their own interest, and were not the owners of the vessel.

But even if the policy were intended by the assured, as the plaintiffs themselves allege, to cover the interests both of Knapp and of themselves, and does by its terms cover them, still the policy, under the circumstances of the case, is indivisible; and if, by reason of the exception, Knapp could not recover in case of barratry by the master, the plaintiff's cannot recover, even to the extent of their interest. The defence of barratry, if good against Knapp, is good against them.

In construing a contract of insurance, we are construing a contract uberrima: field. In giving Paradise, Lawrason 4' Co. a policy on freight, the underwriter had just reason to suppose, in the absence of explanation, that he was dealing with the ownei's of the vessel, or at least with parties closely associated in interest with the owner; and if so, the assured by the terms of the policy was, in the contemplation of the underwriter, agreeing to take upon himself the risk of loss by barratry of the master. We do not think that this view of the case conflicts with the general doctrine, that the special nature of the interest need not be disclosed where the subject matter of the insurance is properly described, or, at all events, that it is more than a reasonable and fair limitation of that doctrine. The reason, or certainly one of the reasons, of that doctrine is, that in general the nature of the title or interest of the assured, whether legal or equitable, absolute or partial, is without influence on the general risks of the policy, the perils of the sea, seizure, capture, etc. Moreover, the payment of the loss to the plaintiffs enures as certainly to the benefit of Knapp, as a payment to himself. For they, under their contract, are bound immediately to apply the proceeds of the policy to the satisfaction of their advances. So that, in substance, if the loss was by barratry, Knapp recovers for a loss for which he had agreed to ask no indemnity.

We, therefore, do not concur with the learned judge in his charge, that if the jury were of opinion that Paradise, Lawrason Sf Co. had, in their own right, an insurable interest, and insured that interest on their own account, they can recover; and that the clause, concerning the barratry of the master, excepts only the case where the assured is owner of the subject insured. We think the charge should have been, that if the jury believed the policy was effected, as alleged by petitioners, to cover the interests of Paradise, Lawrason Sf Co., and of Knapp, the exception concerning barratry applied alike to both; and that, if the loss was by barratry of the captain, neither could recover.

The defendants asked the court to charge the jury, “that freight upon owners’ goods, although insurable as and under the denomination of freight, yet the amount of such freight is to be measured by the additional value given to such goods, by the transportation of them from the port of departure to the port of destination, to be calculated on the value at the port of departure.” The court refused so to charge; but told the jury, that the value, or interest, depends on the rate of freight at the port of departure; and the merchant, in apportion-, ing it, is bound, in fairness, to fix it at that rate which was then the fair and market rate of freight, at the time of loading the cargo; for that, he charged the jury, was the measure of the interest which the shipowner had, under the policy on freight.

The term, freight, said Lord Tenterden, as used in policies of insurance, means the benefit derived to the shipowner from the employment of the ship. It is the same thing, he observed, to the shipowner, whether he receives that benefit of the use of his ship, by a money payment, from one person who charters the whole ship, or from various persons who put specific quantities of goods on board, or from persons who pay him the value of his own goods at the port of delivery, increased by their carriage in his own ship. The assured may fairly consider that additional value as freight, and,so term it in the policy. Flint v. Fleming. 1 Barn, and Adolphus, 45. Mr. Arnould, in his very valuable treatise, after citing this opinion of Lord Tenterden, adds: “ Accordingly, it is now established law in this country that the assured, under a general insurance on freight, may recover the profits he expects to make by carrying his own goods in his own ship on the voyage insured.” Arnould on Ins., p. 221. And Mr. Phillips uses the following language: “Where tlie.owner of the ship is also the owner of the cargo, a policy on freight will cover the interest arising on the transportation of the cargo. In such case, the profits of the voyage, says the Supreme Court of Massachusetts, may be insured under the denomination of freight.” 1 Phillips, 197. Upon this expression, profits, used by the commentators, andfound in some of the decisions, the learned counsel for the defendants base the argument, that the claim of the assured, in this case, for loss of freight, so far as his own goods are concerned, must be controlled by the inquiry, what would have been the enhanced value of Knapp's goods at San Francisco? We think, the argument gives an undue weight to an incidental expression; and does not comport with the true theory upon which the doctrine (above stated in the language of Lord Tenterden) rests, or with the mode in which it has been applied in practice. Freight is the price of the carriage of the cargo; and is the shipowner’s compensation for the employment of the ship, his return for the labor and capital which he employs in the purposes of commerce. If ha carries a cargo belonging to another person, he receives his compensation in the price paid by that person for the carriage. If he carries his own cargo, he may be fairly considered as charging the price of the carriage to the goods, and crediting the ship in account; expecting the'goods to reimburse their outlay, upon their sale at the port of destination. The argument, on the part of the defendants, confounds the freight of the shipowner’s goods, that is, the price or expense of their carriage, with the profits on those goods at the port of destination. But those profits depend upon many circumstances, independent of the home value of the goods and the costs of transportation. They depend, as was properly argued for the plaintiffs, on the favorableness or unfavorableness 'of the foreign market when the goods reach there; which is not controlled merely by the home value and the cost of transportation, but by the proportion of demand and supply in that market, the prosperity or embarrassment of commercial affairs; in short, a variety of circumstances', independent of the home value and freight. Both these have their value; yet the profits may be much, or nothing. In practice, the mode of calculating the loss, suggested by the defendants, has not been followed; and so far as our researches have gone, it has never even heen contended for.

In the case of Flint v. Fleming, the policy was on freight, on the ship Hope, at and from Madras to London. On the arrival of the ship at Madras, the crew were employed some days in discharging the outward cargo ; and then, the vessel was lost in the Madras roads, by the perils of the sea. No part of the cargo was then shipped ; but the captain had purchased at Madras, by order and on account of the plaintiff, his owner, twenty-five tons of red wood. A commercial house had contracted to ship 122 tons of saltpetre; another person engaged to ship ninety tons of light goods; but as to those goods, there was no contract in writing. There was a verdict for the plaintiff. For what? The amount of the freight of all the goods. A motion being made for a new trial, Lord Tenterden, after the observations respecting freight of owner’s goods, which we have already cited, then notices the deficiency of proof, as to the light goods, and says the underwriters must have a new trial, upon that ground. “But,” he remarks, n jle must, at all events, have a verdict against him for the amount of the freight on the red wood and saltpetre. It would, therefore, be advisable for the defendant to pay to the plaintiff, the costs of this action and the freight of the red wood and the saltpetre, and that he should undertake to pay the freight of tho light goods, if, on reference to an arbitrator, it shall be found that there was a contract to ship those goods.” Accordingly, by the reporter’s statement, at the foot of the case, it appears, that the underwriter agreed to pay the costs of the action, and the freight of the red wood and saltpetre, and refer the other matter to arbitration.

By examining the opinions of Bayley, J., and Parke, J., in that case, it will be seen, that they, in substance, understood, by freight of the shipowner’s goods, the expense of their carriage. So, in Devaux v. J. Anson, the idea of estimating the loss, with reference to the profits which would have been realized, is no where hinted at in the evidence or the argument of the case, although, we observe, there was evidence to show what freight the assured had to pay to another vessel, after his own was lost. The argument of Sir William Follett, for the underwriter, seems to concede, that freight of owner’s goods and that of goods belonging to third persons, stand on the same footing. It is true, however, that the policy on freight, in that case, was a valued policy. It is proper to add, that the standard of freight, according to the usual and reasonable rate at the port of departure, is recommended by the consideration, that it is something appreciable by both parties at the time of the contract. The other theory leaves matters afloat, to be afterwards controlled by distant and unforeseen contingent cies.^

'When we speak of the usual and reasonable rate of freight at the port of .departure, we must be understood, as contemplating the rate which could, in the ordinary and legitimate course of business, be obtained by the shipowner from others, for goods of like nature. Because the owner might find shippers, who would contract to pay him $50 per ton for the carriage of iron, or hardware, to California, does it follow, that he can properly estimate the freight on bricks,’shipped by himself, at that rate ? Putting freight on bricks at $55 per ton, as is charged in the ship Russia’s freight list, on bricks shipped by her owner, makes the freight at the rale of about $137 a thousand. Could a third person be found, who would have shipped bricks in the Russia, and contracted to pay that price for their carriage ? A witness for the plaintiffs, on his cross-examination, says: “he never knew any shipper on his own account to buy bricks here at nine dollars to twelve dollars a thousand, and pay freight for them at the rate of $137 50 per thousand, payable here, or at San Francisco.” A witness for the defendants, says : “I consider it madness to make such a shipment.” Advices from California, bearing date 31st October, 1849, and received by a merchant in New Orleans; on the 18th December, 1849, quoted bricks, as worth there, forty dollars a thousand.

We have thus given our opinion upon the prominent questions of law, presented in this case. Our inability to agree, upon two important points, with the ruling of the learned judge of the district court, is, perhaps, a sufficient reason for acceding to the application for a new trial, which has been eai'nestly pressed by the defendants. But there is an additional ground for sustaining this application. Upon the substantial merits of the case, our minds are not satisfied to affirm the judgment.

The painful impression, that the conflagration of the Russia was not accidental, which rested upon the mind of every member of this court, at the close of the elaborate arguments of counsel upon the facts of this case, has not been removed by a subsequent examination of the evidence.

As this matter is to undergo further investigation, it is not necessary that we should comment, at length, upon the evidence. It is proper, however, that we should state the principal points of difficulty which ourminds have encountered in the consideration of this cause.

The vessel, after an interval of about fifty hours from her departure from the South West Pass, was destroyed by fire, at a distance of a few miles from that place. Was her position the consequence of adverse winds and currents, and the sailing qualities of the vessel, or was it the result of design ? What progress had the conflagration made, when the officers and crew abandoned her ?

Could assistance have been rendered-to save the vessel and cargo? ' Was it asked? Does Payson tell the truth, in saying that the captain told him there were ten or twelve barrels of powder on board ; and Snow, in his assertion, that no attempt was made by the towboats to put out the fire, on account of the report'about powder? Was cargo for the owner’s account, ttí the extent asserted, on board the vessel at the time of her destruction? Is the showing of the freight list in the ordinary course of business?- Was there over-insurance, actual or supposed ? Did the asserted conversation of the captain with his paramour, before the loss, really take place ?

These points of inquiry are not all of equal importance or equal difficulty; but they all have, in a greater or less degree, a material bearing upon the grave questions of accident or design, of fraud or good faith.

It is therefore decreed, that the judgments of the district court be reversed, and that these causes be remanded for a new trial according to lawj the of the appeal to be paid by the plaintiffs and appellees.


source: Caselaw Access Project

author: Rost, J. Preston, J. Rost, J. Slidell, J.,

license: Public Domain

text:
    Municipality No. Three v. Antoine Michoud
    The 118th art. of the Constitution should not be interpreted in a strict or tnlltejicnl .ammo. It is sufficient, that the object of the law be stated in its title, according to the understancHi%| of reasonable men. Where some of the provisions of a law fall under the constitutional prohibition, this does not annul the whole act, but-only such portions as are not embraced in the title.
    Under the act of May 4th, 1847, the city councils had the power of taxing rural property within the limits of the city, in the same manner that urban property is taxed; but a distinction between rural and urban property was made by the act of March 18th, 1850.
    The remission of a tax, by the city councils, is an extinguishment of the obligation; and the tax cannot be re-imposed.
    The power to lay and collect taxes has ever been understood to operate prospectively, and never retrospectively.
    Laws prescribe for the future. They can have no retrospective operation. C. C. 8.
    APPEAL from the Fifth District Court of New Orleans, Buchanan, J.

      J. S. Whitaker, for plaintiffs.

      Lewis and Bermudez, for defendant.
   The judgment of the court (Slidell, J., dissenting,) was pronounced by

Rost, J.

In the case of the plaintiffs against the Ursuline Nuns, 2d Ann. 611, we refused to give judgment against the defendants, for a tax on real property not laid out into streets, which had freen assessed at the same rate as tlie tax on tho other real property of the municipality; but we reserved the rights of the corporation to recover the tax, upon previously making a deduction on the assessment, as contemplated by the proviso of the 6th section of the act of 1805, incorporating the city of New Orleans.

The plaintiffs have since passed ordinances making that deduction; and they now claim from tho defendant the reduced taxes on his property not laid out into streets, for the years 1.843 and 1844, and also the full tax for the year 1848, under the provisions of the act “to provide for the payment of the debts of the municipalities of New Orleans, approved on the 4th of May, 1847.”

The defence is, that the property taxed is situated out of the incorporated lim its of the municipality; that, by law, the city of New Orleans, or either municipality, has not the right to levy taxos on property situated within its limits, until the city council shall extend to the property taxed equal support and privileges with the city and incorporated faubourgs, agreeably to the tax imposed; that the property taxed has never enjoyed the privileges and immunities granted to the properties situated in other parts of the municipality; that the defendant has always made his own roads, has no guards, nor light, nor anything else, from the corporation, to establish the equivalent of the amount of taxes claimed from him.

The case is before us on the appeal taken by the defendant, from a judgment in favor of the plaintiffs. The defendant’s counsel admit, that the issue is substantially the same as was made in the case of the Ursuline Nuns. But they ask us to review that decision; and the grounds upon which its correctness is assailed by them, have been argued with marked ability. We are not prepared to admit tho alleged injustice of the tax, as it bears upon the defendant and others in his situation ; and if we were, this is not a matter upon which we can act. We must, within certain limits, apply the law as we find it written, and be guided exclusively by the established rules of interpretation, which can alone give it certainty. Fixed and precise rules, unbending alike for the rich and the poor, though they may, in rare instances, be productive of hard cases, are better than an arbitrary interpretation, which would leave the rights of litigants to the discretion and conscience of the judge.

The sixth section of tho act of 1805 provides, that lands within the limits of the city, not laid out into streets, shall not be taxed for the maintenance of lights, of the city watch, and for watering and cleaning the streets. With those exceptions, there is no reservation on the power of the city government, under that section, to tax that property in common with all other within the limits of the city.

The only acts of the Legislature which have restrained, or in any manner affected,.the power of taxation given to the city government, by the act of 1805, are the act of 1813, the act of 1830, and the act of 1834. The act of 1813 is in these words: “ That so much of the sixth section of the act incorporating the city of New Orleans, passed in 1805, as gives the city council power to lay tax for the use of the city on the suburbs which are laid out into streets, outside of the cily and incorporated suburbs, shall be, and is hereby, repealed, with all acts having reference thereto, until the city council shall extend the aforesaid suburbs equal support and privileges with the city and incorporated suburbs, agreeable to the tax that may be laid on such suburbs, by the city council.” It applies exclusively to property laid out into streets, and does not touch the power of the corporation to tax rural property.

The act of 1830 defines unincorporated faubourgs to be, those which pay no tax to the city, inasmuch as they do not enjoy the same advantages as the other parts of said city. It clearly refers to the faubourgs dispensed from paying taxes, by the act of 1813, and the definition it gives, cannot, upon any sound rule of construction, be applied to any others.

The act of 1834 is entitled, “ an act to explain the extent of the powers, vested by law in the mayor and city council of the city of New Orleans, and for other purposes.” The preamble of the act shows, that the main object of the Legislature in passing it was, to determine whether the corporate powers of the city government were to be extended to the unincorporated faubourgs, and other parts of the banlieue of the city, in the same manner as in the^ city proper and its incorporated faubourgs.

The first, second, fourth and fifth sections of the act have alone reference to taxation. The first section authorizes a tax on carts, drays and carriages, over the entire limits of the corporation. The second section provides, that a certain class of carts, drays and carriages, which arq .not kept for hire, shall also be subject to taxation within the same limits. The fourth section authorizes the mayor and city council to appoint assessors of taxes. The fifth section defines the duties of the assessors, and authorizes the corporation to bring suit against all who are in default, to pay their taxes,- together with eight per cent interest from the day on which they ought to have been paid. It also specifies how the corporation shall proceed against non-residents, and ends by this proviso: “Provided also, however, that nothing contained in this section shall be so interpreted, as to give the right to the mayor and city council to tax any property not within the incorporated limits of the city.” This proviso is the only portion of the act that has any reference to the subject matter of this controversy, and the question is, whether it has repealed the limited power to tax rural property, given by the sixth section of the act of 1805.

It is conceded, that the law does not favor repeals by implication; the legal presumption being, that the Legislature, when it entertains an intention, will express it in clear and explicit terms. But, it is urged, that the intention to repeal is to be inferred from the spirit and intent of the act of 1834, and the object which the Legislature had in passing it; that in 1832, the Supreme Court had determined, in the case of Laferranderie v. Mayor et al., that the corporation had not the power to lay taxes on lands outside of the limits of the city and the incorporated faubourgs, (3 L. R. 246,) and that, under that decision, the Legislature, in passing the act of 1834, took it for granted, that the power to tax rural estate within the incorporated limits of the city, did not previously exist. This may be as stated by counsel; but we are unable to perceive how it can assist the defendant’s cause. If it be an admissible presumption, that the lawmaker does not at all times know the state of .the law, and that, in this case, the Legislature was not aware that, tinder the sixth section of the act of 1805, the power existed, it "is clear that they could not have intended to repeal it. The wording of the proviso of the act of 1834, is not, in our opinion, sufficiently comprehensive to authorize a repeal of former laws, -by implication, in any case; and if, as alleged, it was adopted under the influence of an error of law, we could not, a fortiori, give it effect as a repealing clause, because we have no means of ascertaining that the action of the Legislature would have been the same, if they had been apprized that the power to .tax rural estate was given to the city by the original act of incorporation, and had never been taken away.

It was urged, on the argument of the case, that the act of 1847, under which the tax of 1848 is claimed, is void, being passed in violation of art. 118 of the Constitution of the State, in this, that it embraces more than one object, and all ,the objects embraced therein are not expressed in the title.

The title of the act is, “ an act to provide for the payment of the debts of the municipalities of New Orleans.” The first section provides, that the taxation within each municipality shall be equal and uniform; that property shall be taxed in proportion to its value, and that no one species of property shall be taxed higher than another of equal value. The second section prohibits the emission by the municipalities of bills of credit, promissory notes, or paper currency of any description; and the creation of any debt beyond their revenues. It also prohibits the appropriation of monies to any other than municipal purposes, the subscribing for stock of corporations, and the borrowing of money to an amount exceeding one hundred thousand dollars. The eighth section authorizes the mayor and commissioners of the general sinking fund to sell certain property. The thirteenth section requires the State Treasurer to enforce a strict compliance with a law passed in 1839.

It is urged, that these provisions embrace several different and distinct objects, and render the act in which they are found, unconstitutional and void in toto. In the case of the State v. Hackett, 5th Ann. 91, we had occasion to say, that the title of a law, under the 118th art. of the Constitution, sliould not be interpreted in a strict or technical sense ; and that it was sufficient, that the object of the law be stated in its title, according to the understanding of reasonable men. We stated, that if the title of the act, in that case, had been generally for the arrest and custody of runaway slaves, we would have considered it sufficient; but that, under a title to regulate and define fees, the new provisions, made for the arrest and custody of runaway slaves, were in violation of the article of the Constitution. Tested by this rule, we are not prepared to say, that any of the provisions of this act are unconstitutional. Some provide the means of raising a fund to pay the debts of the municipalities, and the others are intended to secure the appropriation of the fund thus raised to that object. But if it were true, that some of the sections fall under the constitutional prohibition, this would not render the act entirely null. When portions of a law come within the reasonable intendment of its title, and others do not, the latter alone are unconstitutional, provided they can stand separately.

The first section of the act of 1847 clearly comes within the intendment of its title. It provides how the taxes, with which the debts of the municipalities are to be paid, shall be levied; and is totally unconnected with any of the sections objected to. Supposing those sections to be void, their nullity would not affect the power given to the municipalities, by the first section, to levy taxes equal and uniform. The kind of equality meant by the Legislature being stated in the act, nothing remains for us, but to give effect to their enactments. The taxes on the slaves for the years 1843 and 1844 were properly assessed, as in other parts of the municipality. Slaves are taxed independently of the land to which they are attached.

The judgment is affirmed, with costs.

Same Case — On a Re-Hearing.

THE judgment of the court, on a re-hearing, was pronounced by

Preston, J.

A re-hearing having been ordered in this case, we have again carefully examined the effect of the acts of 1806, 1813, 1830, and 1834, upon the power of the municipality to tax its rural property, and have come to ,1 , , . . ... . , . . the conclusion again that the municipality had that power, tor the reasons expressed in the original opinion. Other laws fortify this conclusion. By the laws cited, the Legislature made a distinction as to the amount of taxes to be imposed upon what were called the incorporated and the unincorporated portions of the city. But by the act of 1836, the whole city was divided into municipalities, and each municipality was incorporated as a distinct corporation. The 2d, 4th and 10th sections of the act specially gave to the municipalities all the rights and powers which, by all previous laws, belonged to the corporation of New Orleans, the greatest of which was the power to raise, by taxation, the revenues necessary for the government and administration of the corporation.

The property which it is sought to tax, was situated in the Fourth Ward of the Third Municipality. The ward was entitled to representation in the council of the municipality and in the General Council. The aldermen from the ward, in which this property now claiming exemption from taxation was situated, had the right to vote for taxes on other wards; and, vice versa, it seems reasonable that their aldermen should have the right to vote for taxes on the whole of this ward.

By an act of 1840, the State assessments of all property in the whole of the municipalities, were to be used for the imposition of taxes.

The reason of keeping up the ancient distinction between incorporated and unincorporated parts of the city, as to taxation, is not so forcible as imagined in argument. The Legislature had exempted parts of the city from taxes for tho maintenance of lights of the city, the city watch, and for watering and cleansing the streets. But this constituted only a small part of the city burdens. The mayor, secretary and officers of the General Council were to be paid; the immense debt of the old city was to be paid, also the salaries of the officers administering the sinking fund; of the recorders of the municipalities, and their numerous other officers; the expenses of the courts, and criminal prosecutions; of public schools; of the poor, workhouses and prisons; and the innumerable other expenses which fall upon the municipalities in the discharge of their municipal duties: from none of which it is pretended the property taxed in this case is expressly exempted, and to most of which the proprietor has no pretence for exemption, which might not be made by any other citizen with equal plausibility —being expenditures equally beneficial to all. Indeed, the improvement of the streets and thoroughfares to and from the city contributes greatly to the facilities of the adjacent rural proprietors, and to the improvement and value of their property. They, in fact, use the streets, markets, and other improvements of the city, in common with other inhabitants. The assessment of their property for taxation, is reduced almost in proportion to their distance from the city — or rather, property in the city is increased in value so -much, by the necessary improvements, that it is probably taxed in proportion to the expenditures in its vicinity. And after all, there is not so much inequality in taxation as appears by a superficial view. It is for legislative and municipal wisdom to regulate taxes as equally as possible, and dispose of the revenues as wisely as they can. Courts have no control over this difficult subject.

The Legislature, by an act approved the 18th of March, 1850, have again made a distinction between urban and rural property within the limits of the city, and as to the rate of taxation to be imposed on each: and it is to be hoped» the municipalities will be able to execute it in such a manner as to avoid all complaint and litigation hereafter.

-A-3 t° the case before the court, the taxes for the years 1843, 1844 and 1848, are claimed. In pursuance of the powers conferred upon the municipality by ti16 ac(; 0f 1836, she imposed the taxes claimed for 1843 and 1844, and might recover them but for her own proceedings. By a series of resolutions, adopted the 31st of March, 1845, the municipality determined not to tax rural property, including that for which exemption is claimed in the present suit, and ordered all receipts for taxes up to and including the year 1844, to be burned. This was a remission of the taxes on this property for the years 1843 and 1844; and they cannot be claimed again. The remission of a debt extinguishes it.

It is true, that the council of the municipality, on the 29th of December, 1845, revived the ordinances imposing taxes on rural as well as urban property; but laws can prescribe only for the future, they can have no retrospective operation. Code, art. 8. The revived ordinances could, therefore, only operate upon taxation for the year 1846, and subsequently. The power to lay and collect taxes, has ever been understood to operate prospectively; and never retrospectively, as contended. If the council could legally tax for a year back, we see no reason to prevent them from doing so for any number of years. Such has never been the interpretation of the power to lay and collect taxes, either by the Legislature, or political corporations acting under its authority.

As to the tax claimed for the year 1848, the act of 1847 expressly directed the municipality to assess and collect an equal tax on all the property within its limits. The power of the Legislature to direct this equal and uniform taxation, is unquestionable. It is in conformity to the letter of the Constitution, so far as its principles may apply to municipal taxation. The tax claimed for 1848, in the opinion of the majority of the court, is, therefore, clearly legal: and for it tho plaintiffs must have judgment, with eight per cent interest, and costs in the district court.

As to the taxes claimed for the years 1S43 and 1844, a majority of the court are of opinion, they cannot be recovered; and that the judgment of the district court should be reversed, as to the taxes allowed the plaintiffs for 1843 and 1844, and the appellees condemned to pay the costs of the appeal.

It is therefore ordered, adjudged and decreed, that the judgment rendered by this court, be annulled. It is further ordered and decreed, that the judgment of the court below be reversed, so far as relates to the'taxes claimed for 1843 and 1844; and that the plaintiffs recover from the defendant, the tax claimed for 1848, with eight per cent interest, and costs in the district court; the appellees to pay the costs of the appeal.

Rost, J.

I adhere to the decision in the case of The Ursuline Nuns v. Third Municipality, 2d Ann. 611; I see no cause to disturb the judgment first rendered in this case.

Slidell, J.,

dissenting. My opinion, that Michoud should not be held liable in this case, remains unchanged.