Adm'rs of Perrin v. Protection Insurance Co.

quence of which the steam gets highly heated and the boilers burst. The office say there would have been no loss if the engineer had not fallen asleep, and it was a careless act in him to do so. Now, it is admitted in the defendant's argument that the insured is only bound to select ordinarily careful men to control his boat; but, according to this mode of proving negligence, he is made responsible for the very slightest degree of carelessness. There is no view of the case in which such a question can be tolerated.

*As to the newly-discovered evidence, I have not seen [169 any. The affidavits made at the trial, by Mr. Robbins and Mr. Pomeroy, only showed that, by proper diligence the defendants could have accumulated more testimony; but that is no ground for a new trial. I have not taken the trouble to examine the depositions, because I suppose the defendants had no authority to take such testimony, unless by consent; and also because I suppose it is merely cumulative testimony.

On the whole case, I think it was evident to the court that the plaintiff ought to recover. There was no act of negligence shown; that the captain was proud of his boat; that he made foolish brags of what he could do with her, and really believed he had the best boat, and the fastest boat, on the river, I am willing to admit; but that he, or his engineers, were guilty of negligence, I deny. The defense of negligence, then, has not been proved. To say the most of the defense, it has left it doubtful whether there was negligence or not; but that is not sufficient, and therefore the plaintiff ought to have judgment.

LANE, C. J. The newly-discovered evidence is cumulative only. At the trial it was shown that preparations were made, before starting, to overtake another boat; that fires were kept burning with great fierceness; and that the boilers had become very hot; that the escape of steam was attended with a peculiar shrill noise, denoting great pressure, and so loud as to awaken notice and alarm. The new evidence is the testimony of a witness who, going on board, was terrified by the violence of the fires, the intensity of the heat, and the glimmer from the ascent of heated air, "which seemed to make the boilers creep and move in their beds," and goes little further than to furnish additional evidence of facts. already before the jury.

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Adm'rs of Perrin v. Protection Insurance Co.

That a loss arising from an explosion of the boiler is covered by the policy, seems plain to us, when we consider the subject insured, and the nature of the risks to which it is of necessity exposed. The insurance was on a steamboat. The policy is in the 170] form which has long been in use for marine *risks, and the words which describe the perils are large enough to embrace all such as arise in the ordinary use of the thing insured. A policy on ships covers losses arising from accidents to the power which moves them, and it must be presumed that the parties contemplated the same protection to a steamboat, when the loss occurs to her motive agencies.

The other causes for which the new trial is asked depend upon the right of the defendant to use the negligence of those managing the boat as a defense against this liability.

This point first came before this court in 1832. Lodwick v. Kennedy, 5 Ohio, 433. The business of insurance at that time was new in the western waters, and had rarely been the subject of investigation in our tribunals. The court, of which I was then a member, found the rule exonerating insurers from losses arising from the negligence of master and mariners, established in New York. Goix v. Law, 1 Johns. 346; Vos and Graves v. The United States Insurance Co., 2 Johns. 187; Grim v. Phoenix Insurance Co., 13 Johns. 457; and countenanced by such English authorities as were within our reach, and in entire correspondence with that general principle, which makes the act of the servant the act of the master.

In these earlier cases no distinction seems to have been taken between losses which arise from the want of capacity and skill, and those which are the results of mere carelessness. The former class are never covered by the policy. But there has been, through the recent jurisprudence, especially through a series of cases decided since that, in 5 Ohio, a modification of the rule, and a disposition to extend the responsibility of the insurer to the latter class of risks. The English cases may be found in 2 Barn. & Ald. 73; 5 Ib. 171; 5 Barn. & Cres. 219. The same charge has prevailed in the United States. It is recognized with favor in Patapsco Insurance Co. v. John Coulter, 3 Pet. 222; Columbia Insurance Co. v. Lawrence, 10 Ib. 517, and in some circuit court decisions; and is finally accepted in 11 Pet. 205, by the Supreme Court, as a well-established principle of the law of insurance.

Adm'rs of Perrin v. Protection Insurance Co.

*While this doctrine was assuming this form, and before it [171 became an admitted principle of our commercial jurisprudence, it was again before this court, in Fulton & Foster v. Lancaster Insurance Company. I entirely concurred with my brethren in the opinion that no propriety was, at that time, shown for changing our position, as the new rule had not been then sanctioned by the direct authority of any ultimate American court. This uncertainty is distinctly dwelt upon by the judge who reported that The decision since made, in 11 Peters, 205, has supplied a precedent, of the most weighty character, settling the law, in the federal courts, in a manner likely to be followed in the courts of these states, where the law merchant is best understood.

case.

The present case distinctly lays before us the propriety of now adhering to our former decision. This is not a question of local law, springing from our own fountains of jurisprudence only, but a general commercial principle, resting on broader foundations, which ought to be uniform among all civilized nations. When the law of insurance has, in its fuller development, received an important modification, in the English and federal courts, and which, probably, will be the rule of the state courts, as fast as they act upon the question, it may be emphatically asked, whether the courts of Ohio should not conform to this change? It would be not a little inconvenient, as well as odd, if our citizens should receive one interpretation of the universal law merchant in our courts, while the stranger receives one different, by appealing to a different tribunal, which holds its seat by our side.

If the proposed change were wrong in itself, it ought not to be adopted; but it seems to commend itself to our acceptance, by its intrinsic propriety. The assured is bound to provide competent capacity and skill; it is a part of his implied warranty, and a duty which caution will enable him to perform; but the risks which arise from the carelessnesss of his servants, which are among the prominent perils he encounters, are those from which no prudence will defend him, and from which he may well ask protection from the insurer. If, too, the inquiry be extended beyond the [172 proximate cause of loss, it will assume a latitude inconsistent with the distinct and intelligible rule, by which the rights of the parties should be defined. Were the point now first offered to our courts, after these late discussions, it is hardly to be doubted that their modification would be received. And, since it has been accepted

Carlisle v. Wishart.

in this form in these courts, to whose decisions we look for evidence of commercial law, and since we believe it has, in fact, become a well settled doctrine of the law merchant, we feel it a duty to recede from the position heretofore taken in these adjudged cases. The adoption of such a principle renders the inquiry sought by defendants irrelevant, and leads us to overrule the motion. Motion overruled. Judgment for plaintiff on the verdict.

GEORGE CARLISLE V. JAMES WISHART.

Where a negotiable note has, before it fell due, been transferred in consideration of a pre-existing debt, the maker can not, as against the person receiving it, without notice, take advantage of any equities between himself and the payee.

A pre-existing debt is a good consideration for the transfer of a negotiable note, and a bona fide indorsee, without notice, takes the note discharged of prior equities.

THIS is a motion for a new trial, from the county of Belmont. The action was assumpsit, against the maker of the promissory note, for $666.663, dated August 23, 1838, at six months, payable at the Franklin Bank of Cincinnati, to Joseph S. Benham, or order, and was indorsed, and transferred to the plaintiff, by Benham, before maturity, in payment of a precedent debt. The plaintiff received the note in good faith, and without notice of the consideration, or of any defense as against Benham.

173] *On the trial the defendant gave evidence of the consideration of the note, and that the same had failed, and other matters, tending to prove that, as against the defendant, Benham ought not to recover; to which evidence the plaintiff objected, but the objection was overruled, and the court charged the jury that, inasmuch as the note had been transferred in payment of a pre-existing debt, the defendant could make any defense that he might have made in case Benham, the payee of the note, had sued the same.

The jury found for the defendant, and the plaintiff then moved the court for a new trial.

Carlisle v. Wishart.

DANIEL PECK, for plaintiff:

The only question on this motion is, whether a pre-existing debt is such a consideration as will protect the holder of a negotiable note, transferred before due without notice of any defense between the original or antecedent parties to the paper.

I consider the question arising in this case of great importance, and well deserving the consideration of this court.

The books and cases all agree that paper of this description, taken bona fide and for a valuable consideration, shall, in the hands of an innocent holder, be protected. But there has latterly arisen, in some courts, a difficulty as to the true meaning of the term valuable consideration, some holding it to be anything which would amount to a good consideration for ordinary purposes, while others contend that it means a present consideration that is given, either in money or goods, at the time of the transfer, and that a pre-existing debt is not such a consideration.

This court, in the case of Riley & Van Amringe v. Johnson et al., 8 Ohio, 526, held that a consideration of that character was not sufficient for such a purpose.

That opinion, and the cases for and against it, I propose to re

view.

The opinion in the case of Riley & Van Amringe v. Johnson et al., professedly rests, for authority, on the case of *Codding- [174 ton et al. v. Bay, 20 Johns. 637, and other cases, having that as their foundation; and, considering that it was to settle a point of such importance for the first time in this great state, it seems to me that it did not receive a very thorough investigation; and, for aught that I can see, the case may have been mainly, if not altogether, decided against the plaintiff on the ground of fraud, or notice of the defense as between the original parties to the note. It may have been decided correctly without touching this point.

It seems to me that the case of Coddington et al. v. Bay has been strangely misunderstood by the Supreme Court of New York. In the original case, when decided by Chancellor Kent, he says: "That the defendants (the Coddingtons) are not holders of those notes and securities for a valuable consideration. The notes were not negotiated to them in the usual course of business or trade, nor in payment of any antecedent or existing debt, nor for cash or property advanced, debt created, or responsibility incurred on the strength of the notes." 5 Johns. Ch. 54.