Reed v. Ins. Co., 95 U.S. 23

In November, 1867, the libellant, Samuel G. Reed, of Boston, was owner of the ship “Minnehaha,” then lying at Honolulu, in the Sandwich Islands, and about to sail from that place in ballast via Baker’s Island, with the intention of there taking in a cargo of guano, to a port of discharge in the United States. Baker’s Island is a small rocky island in mid-ocean, nearly under the equator, and about two thousand miles south-westerly from the Sandwich Islands, having no harbor or anchorage, and only frequented for its guano. When ships arrive there, they are moored in the open sea, in an exposed and perilous position. The mooring is effected by means of a heavy stationary anchor, weighing five thousand six hundred pounds, fastened to a coral reef in about one hundred fathoms of water, to which anchor a large buoy is attached by a heavy pendant chain. This chain is braced by two other chains, each over a thousand feet long, attached to anchors fastened to another coral reef nearer to the island. By still another chain the ship is moored to the first-mentioned pendant chain as long as she remains at the island; and her cargo is sent aboard from the p. 24island in small boats. The place is subject to strong currents and heavy gales, and vessels are, in consequence of the weather, frequently obliged to put to sea while loading.

2. The excepting clause, “ the risk to be suspended while the vessel is at Baker’s Island loading,” has no bearing upon p. 26the rights of the parties; because no loading was made or attempted. The appellee gives to that clause a broader signification than its terms justify, and makes it include a suspension of the risk before the process of loading began. If it be ambiguous (which we deny), it should receive a construction least favorable to the company. 2 Parsons, Contr. 19 (ed. 1860) ; Dann n. Spurrier, 3 B. & P. 399 ; Doe v. Dixon, 9 East, 15 ; Throckmorton v. Wacy, Plowd. 154; Melvin v. Prop., ^c. on Merrimack River, 5 Met. (Mass.) 27. Usage is never admissible to contradict what is plain. Hearne v. Marine Insurance Co., 20 Wall. 492; Haskins v. Warren, 115 Mass. 535 ; Dickenson v. Cay, 7 Allen (Mass.), 34 ; Black v. Bachelder, 120 Mass. 171. Nothing can be plainer than that the risk was to be suspended only while the vessel was at Baker’s Island loading. Any other construction would do violence to the rule that full force and effect should be given to every word of a written contract. 2 Parsons, Contr. 16, 17 (ed. 1860) ; Evans v. Sanders, 8 Port. (Ala.) 497; Stratton v. Pettit, 16 C. B. 520.

If the construction here contended for is not the natural one, p. 28looking at the policy alone, it is proper to invoke, in aid of its interpretation, the letter enclosing the application, and therefore a part of it. Looking at the entire instrument, the object sought to be accomplished, and all the circumstances of the case, it seems impossible to resist the conclusion that the words in the clause were employed to describe the place at which the risk was to be suspended, and the purpose for which the vessel was to be there, without reference to the mode in which her crew might be employed. Courts have gone so far in this line of interpretation as to decide, that, although the literal and grammatical construction of a policy would make it attach only on goods “ at ” a designated place, “ it may attach although the ship be at another place, if the policy and all the circumstances make it certain that the name of the place is either surplusage or a mere term of description.” 2 Parsons, Mar. Ins. 45.

This is a cause of contract, civil and maritime, commenced by a libel in personam by Samuel G. Reed, the appellant, against the Merchants’ Mutual Insurance Company of Baltimore, the appellee, to recover $5,000, the amount insured by the latter on the ship “ Minnehaha,” belonging to the libellant. The policy was dated the fourteenth day of January, 1868, and insured said ship in the amount named, lost or not lost, at and from Honolulu, via Baker’s Island, to a port of discharge m the United States not east of Boston, with liberty to use Hampton Roads for orders, “the risk to be suspended while vessel is at Baker’s Island loading.” The ship was lost at Baker’s Island, where she had gone for the purpose of loading, on the third day of December, 1868. The defence was that p. 30the loss occurred whilst the risk was suspended under the clause above quoted; also laches by reason of the delay in commencing suit, being more than four years after the cause of action accrued.

A strictly literal construction would favor the latter meaning. But a rigid adherence to the letter often leads to erroneous, results, and misinterprets the meaning of the parties. That such was not the sense in which the parties in this case used the words in question is manifest, we think, from all the circumstances of the case. Although a written agreement cannot be varied (by addition or subtraction) by proof of the circumstances out of which it grew and which surrounded its adoption, yet such circumstances are constantly resorted to for the purpose of ascertaining the subject-matter and the stand-point of the parties in relation thereto. Without some knowledge derived from such evidence, it would be impossible to comprehend the meaning of an instrument, or the effect to be given to the words of which it is composed. This preliminary knowledge is as indispensable as that of the language in which the instrument is written. A reference to the actual condition of things at the time, as they appeared to the parties themselves, is often necessary to prevent the court, in construing their language, from falling into mistakes and even absurdities. On this subject Professor Greenleaf says: “ The writing, it is true, may be read by the light of surrounding circumstances, in order more perfectly to understand the intent and meaning of the parties; but, as they have constituted the writing to be the only outward and visible expression of their meaning, no other words are to be added to it, or substituted in its stead. The duty of the courts in such cases is to ascertain, not what the parties may have secretly intended, as contradistinguished from what their words express, but what is the meaning of the p. 31words they have used.” 1 Greenl. Evid., sect. 277. Mr. Taylor uses language of similar purport. He says: “ Whatever be the nature of the document under review, the object is to discover the intention of the writer as evidenced by the words he has used; and, in order to do this, the judge must put himself in the writer’s place, and then see how the terms of the instrument affect the property or subject-matter. With this view, extrinsic evidence must be admissible of all the circumstances surrounding the author of the instrument.” Taylor, Evid., sect. 1082. Again he says: “ It may, and indeed it often does, happen, that, in consequence of the surrounding circumstances being proved in evidence, the courts give to the instrument, thus relatively considered, an interpretation very different from what it would have received, had it been considered in the abstract. But this is only just and proper; since the effect of the evidence is not to vary the language employed, but merely to explain the sense in which the writer understood it.” Id., sect. 1085. See Thorington v. Smith, 8 Wall. 1, and remarks of Mr. Justice Strong in Maryland n. Railroad Company, 22 id. 105.

The principles announced in these quotations, with the limitations and cautions with which they are accompanied, seem to us indisputable; and, availing ourselves of the light of the surrounding circumstances in this case, as they appeared, or must be supposed to have appeared, to the parties at the time of making the contract, we cannot doubt that the meaning of the words which are presented for our consideration is that the risk was to be suspended while the vessel was at Baker’s Island for the purpose of loading, whether actually engaged in the process of loading or not. Taking this clause in absolute literality, the risk would only be suspended when loading was actually going on. It would revive at any time after the loading was commenced, if it had to be discontinued by stress of weather, or any other cause. It would even revive at night, when the men were not at work. This could not have been the intent of the parties. It could not have been what they meant by the words “ while vessel is at Baker’s Island loading.” It was the place, its exposure, its unfavorable moorage, which the insurance companies had to fear, and the risk p. 32of which they desired to avoid. The whole reason of the thing and the object in view point to the intent of protecting themselves whilst the vessel was in that exposed place for the purpose referred to, not merely to protect themselves whilst loading was actually going on. Her visit to the island was only for the purpose of loading; as between the contracting parties, she had no right to be there for any other purpose; and, supposing that they intended that the risk should be suspended whilst she was there for that purpose, it would not be an unnatural form of expression to say, “ the risk to be suspended while vessel is at Baker’s Island loading.” And we think that no violence is done to the language used, to give it the sense which all the circumstances of the case indicate that it must have had in the minds of the parties.

The appellee, as a further defence, set up laches in bringing suit. The libel was not filed until more than four years had p. 33elapsed after the cause of action had accrued. The Statute of Limitations of Maryland requires actions of account, assumpsit, on the case, &c., to be brought within three years; and the counsel for the appellee insists that by analogy to this statute the Admiralty Court, having concurrent jurisdiction with the State courts in this case, should apply the same rule. We had occasion, in the -case of The Key City, 14 Wall. 653, to explain the principles by which courts of admiralty are governed when laches in bringing suit is urged as an exception in cases cognizable therein. In view of the construction which we have given to the contract in this case, it is not necessary to pass upon the precise question now raised by the appellee.

The grant is not set forth in the record; but we must presume that it was in the ordinary form of grants made by former governors of California, under the Mexican colonization law of 1824, as under no other law were those governors empowered to make grants of the public domain. J Those grants were p. 35sometimes of tracts designated by well-defined boundaries, sometimes of a specified quantity of land lying within exterior boundaries embracing a gieater amount, and sometimes of places by name where these were well known, and thus capable of ready identification. All of them were made subject to the approval of the assembly of the department; and, until they received such approval, the estate granted was liable to be defeated. And, when the approval was obtained, there was another proceeding to be taken, which was essential to the complete investiture of title; and that was, a formal delivery of possession of the property by a magistrate of the vicinage, called, in the language of the country, the delivery of juridical possession. This proceeding involved the establishment of the boundaries of the tract, when there was any uncertainty respecting them. If these were designated in the grant, it required their ascertainment and identification; if they were not thus designated, it required the measurement of the quantity granted and its segregation from the public domain. The regulations prescribed by law for the guidance of the magistrate in these matters made it his duty to preserve a record of the various steps taken in the proceeding, to have the same attested by the assisting witnesses, and to deliver an authentic copy to the grantee.

In the case at bar, the surveyor-general for California disregarded the boundaries established upon the juridical possession delivered to the grantee. He proceeded upon the conclusion that the confirmees were restricted by the decree to one square league, to be measured out of the tract within those boundaries, which exceeded that amount by about fifteen hundred acres. Whether the terms of the decree justified his conclusion is a question upon which it is unnecessary for us to express an opinion. That is a question which must, in the first instance, be determined by the Land Department in carrying the decree p. 3686 Van Reynegan v. Bolton. [Sup. Ct.

The defendants acquired no rights as pre-emptioners under the laws of the United States. Lands claimed under Mexican grants in California are restricted from settlement so long as p. 37the claims of the grantees remain undetermined. 10 Stat. 246. Their possession, therefore, was that of simple intruders and trespassers without color of right.1