Wallerstein v. . the Columbian Insurance Co.

Hunt, C. The recovery was for the value of the coffee only. The insurer of the wool and the coffee is liable for a total loss of either the wool or the coffee. Each is deemed the subject of a distinct insurance under the clauses in question. (B iays v. Chesapeake Ins. Co., 7 Cranch, 418; Wadsworth v. Pacific Ins. Co., 4 Wend, 40:) There is but a single question in this case: Was there a total loss of the coffee ? The policy was a continuous one. It insured the merchandise from ports in Europe to New York “free of p/articidar rnerage only I Under this clause, in the case of a single article, the insurers are liable only in the event of a total loss of the article insured. The shippers insist that the facts found establish a total loss of the coffee. The insurers insist that the loss is partial only. The question is, therefore, was there a total loss of the coffee insured ? More particularly still, the question may be thus stated : The ship is stranded, becomes a wreck, and is submerged in the sand. The tide at its full goes over her main deck and her cargo is submerged. The master, in good faith, abandons the vessel and cargo as a total loss, while in this condition and in good time, and the owners give notice to the insurers. The latter refuse to accept the abandonment, employ a wrecking company, who, after some months’ of labor, recover from the vessel some wool and some coffee, the vessel and the body of the cargo never being saved. *217 The wool, upon sale, produces $1,100 more than the expenses of its recovery, and the coffee $2.44 more than the expenses of its recovery. Is this a total loss of the coffee ? Must there be a total physical loss of the subject of the insurance, or is a total loss to the owner sufficient % In the English practice, a ship is a total loss when she has sustained such extensive damage that it would not be reasonably practicable to repair her. The ordinary measure of prudence which the courts have adopted, is this: If the ship when repaired will not be worth the sum which it would be necessary to expend upon her, the repairs are, practically speaking, impossible, and it is a case of total loss. (Moss v. Smith, 9 Man. Gr., and Scott, 103; Irving v. Mantang, 1 id., 176, 304; Roselle v. Gurney, 11 Com. B., 2 J. Scott, 186, 187; Granger v. Martin, 2 Best & Smith, 467, 468; Adams v. McKenzie, 13 C. B., N. S., 442; 2 Parsons, infra.) The American rule recognizes the same principle, but fixes upon a different amount of expense as giving the right to abandon. If the expenses of repair will exceed half the value of the ship when repaired, she is considered a total loss, according to the American authorities, and may be abandoned. See all the cases collected in 2 Parsons on Marine Insurance, edition of 1868, 125, 126. On the occurrence of a stranding Eke that in question, resulting in permanent destruction, the voyage is lost by a perE insured against, and the master of the vessel thereupon becomes the agent of the cargo owners as well as of the owners of the vessel, and must act as the facts of the case require. These facts and his abandonment, create a total loss, and the subsequent recovery of the vessel, or of a portion of the goods by extraordinary exertions, does not alter this result. This is salvage service merely, and does not create a general average, nor does it entitle the ship-owners to freight. (Dunnett v. Tomaghen, 3 John. R., 156; Heylzin v. Fire mans’ Ins. Co., 11 id., 85; Bryan v. Maitland, 25 Wend., 618; 2 Pars., sup., 78, 79; Story on Agency, § 118.) *218 In cases like the present, the chief question has been, whether there must be an actual total physical loss of the thing insured, or whether there may be a constructive total loss; whether there must be demolition and annihilation, or whether a destruction of all value to the owner, and hence a total loss to him is sufficient. The current of authorities, both in this country and in England, as well as the conclusion of elementary writers, is in favor of the doctrine of constructive loss. The authorities are so distinct and so numerous, that I will content myself with simply referring to them without comment. Especially is this the rule where the voyage is broken up by the destruction of the vessel. - American authorities: (Lemont v. Lord, 52 Maine, 393, etc.; Poole v. Protect. Ins. Co., 14 Conn., 47; Bryan v. N. Y. Ins. Co., 25 Wend., 618; Buchanan v. Ocean Ins, Co., 6 Cowen R., 318; De Peyster v. Sun Mutual Ins. Co., 19 N. Y. R., 272.) English cases: (Burnett v. Kennyton, 4 T. R., 210, 222; Dyson v. Roncroft, 3 Bos. & P., 474; Cologan v. London Ass. Co., 5 M. & S., 447; Roux v. Salvader, 3 Bingh. N. C., 266; S. C., 4 Scott, 1; Adams v. McKenzie, 13 J. Scott, C. B., N. S., 442; Moss v. Smith, 3 Man. & Gr., 103; Rosette v. Gurney, 11 C. B., 2 J. Scott., 186; Granger v. Martin, 2 Best & Smith, 467.) Elementary authorities: (2 Parsons on Marine Insurance, 68, etc.; Marshal on Insurance, 5th ed., 603, Shee’s note; Phillips on Insurance, 5th ed., 437, n. 3; Park on Insurance, 6th ed., 151, 155; 2 Arnould on Insurance, *1022.) The same principles which prevail as to a total loss of the ship, apply to the total loss of the cargo, with the difference which is made necessary by the difference in the nature of. the property. (2 Par., sup., 93.) I will now refer more particularly to those cases on which the court below based its opinion in reaching a contrary result, as well as those cited by the counsel sustaining their judgment in the argument before us. The cases cited by the court below are those of Magrath v. Church and De Peyster v. Sun Mut. Ins. Co., the last of which is cited by me to *219 sustain the contrary doctrine. In addition to these cases, there are cited by the counsel for the respondents Mason v. U. S. Ins. Co. (1 Wheat., 219); Skinner v. Western Ins. Co. (19 La. R., 273); 2 Par. Mar. Law, 381; Saltus v. Ocean Ins. Co. (14 I. R., 138); Neilson v. Col. Ins. Co. (3 Cai., 108); Long v. Gorman (1 John. Cas., 226); Cocking v. Fraser, (Doug., 295). The case of Cocking v. Fraser is discussed in all the elementary works, and in many of the reported cases. It is said that it never was an authority on the point in question. (Park, on Ins., 6th ed., 151, 155.) It is hardly necessary to discuss that point. Conceding it to have been authority, it has been expressly overruled. Mr. Arnould says (2 Arnould Ins., 1022): “ It seems better to consider this case as overruled in English law, than to endeavor to support it on its facts.” This case was decided by Lord Mansfield in 1784 or 1785. Lord Kenyon dissented from this ruling in Barnett v. Kennington (7 T. R., 210, 222), in 1797. Lord Almesly overruled it in 1803, in Dyson v. Roncroft (3 B. & P., 474), although he makes some effort to reconcile the cases. In 1816 Lord Ellenbtjbgh overruled it, in Cologan v. London Ass. Co. (5 M. & S., 447). In 1835 the case of Roux v. Salvador, in the Court of Exchequer Chamber, again overruled its principles. (3 Bing. N. C., 526; S. C., 4 Scott, 1. See 2 Par. on Mar. Ins., 97, 98, etc.) The first, in time, of the cases cited from the reports of this State, is that of Le Roy v. Gouverneur (1 John. Cas., 226). That was on a policy “free from average under seven per cent unless general,” upon a cargo of corn and stores, on a voyage from ETew York to Madeira. The vessel having met with foul weather, put into ETewcastle, on the Delaware; but being unable to obtain aid, proceeded thence to Philadelphia. The ease states that “ on unloading her cargo all the corn was found to be so much damaged as to be unmerchantable and unfit to be reshipped; that a considerable quantity of the lumber had been thrown overboard during the storm.” In a per curiam opinion it was held that the plaintiff could recover a propor *220 tion for the general average occasioned by the jettison, but not a total loss. It is to be observed that all the corn was there in kind and specie. There was no destruction or Change of character. It was not merchantable, simply; that is, it was not equal to the average of its class; not fit for sale at the market price of the uninjured article. It was “ not suitable to be reshipped;” that is, it was not corn of a character and quality suitable for shipment to Madeira. So, again, as was said by Mr. Harper, in Moreau v. U. S. Ins. Co. (1 Wheat., 219), there never was an abandonment while the peril of total loss existed, and the right cannot be exercised after that peril is passed. The notice of abandonment must be given while the whole is in peril, and in a reasonable time. (Andrews v. Royal Ex. Ass. Co., 7 East, 38; Davis v. Milford, 15 East, 565.) Magrath v. Church (1 Cai. R., 196) was the same case between different parties; and it appears in that report of the case that the actual value of the insured articles was $924, in addition to all the expenses and charges connected with its preservation. The opinion was delivered by Kent, J. He held, as the court had before held, that the plaintiff could not recover as for a total loss. It is not to be denied that his observations in the course of his decision give countenance to the case of Cocking v. Fraser. They are, however, quite aside from the actual point of his decision upon the facts before him. This authority is subject to the remarks made upon the preceding case. Neilson v. Columbian Ins. Co. (3 Cai., 108), was also an insurance upon corn from New York to Madeira. The jury found a verdict for a total loss, which the Supreme Court set aside. Without going further, it is sufficient to note the facts. 1. The voyage was not destroyed. 2. There was substantial value preserved ($400). 3. The injury to the corn was from a peril not insured against. The statement in the case does not show that the vessel shipped any water. A portion of the corn was thrown overboard and the vessel came to on the north side of the island, a southerly wind preventing her going to Funchal, on the south side. *221 Being alarmed by pirates, she stood away for the Cape de Verds, and in nine or ten days reached Bonavista, “when, upon opening the hatches, the com was found so damaged and offensive that it was forbidden to be landed, but was sold as it lay on board for about §400.” She then sailed for Brazos, reached St. Vincent, another of the Cape de Verds, and after repair sailed to Lisbon. No claim against the underwriter was ever made on her. 4. The right to abandon was not exercised, while the peril of total loss existed. In Saltus v. Ocean Ins. Co. (14 John. R., 138), the action was to recover for the loss of a cargo of corn shipped to Lisbon. It is to be observed of that case, that there was no loss of the voyage. “ The vessel was fully repaired and in a state to proceed to sea, but did not prosecute this or any other voyage.” The cargo was materially injured, and was not in a state to be transported, but was yet of substantial value. No abandonment was claimed, while a peril of total loss remained. It is conceded, however, that the principle of Cocking v. Fraser was supposed by the court to control the case. The reference to Parsons on Marine Law, is to a passage where a discussion is had of the cases already discussed by me. Moreau v. The United States Insurance Company (1 Wheaton, 219), is also one of the cases cited by the respondent’s counsel, and is apparently an authority in his behalf. The court decide, in general terms, that the loss cannot be said to be total, if the property arrive at the port of discharge, reduced in value or quality to any amount. The learned judge says: “ If the loss be total in reality, or such as the insured is permitted to treat as such, he is entitled to abandon and recover as for a total loss in the case of memorandum articles, but always with this exception, that he is not permitted to turn a partial into a total loss. Keeping this distinction in view, the loss of the voyage by capture, shipwreck or otherwise, may be treated as a total loss.” This, he says, is the doctrine of Dyson v. Roncroft (supra). The true point of the decision is found in the argument of Mr. Harper, of counsel for the insurance company. He says at p. 122: “ The *222 right of abandonment exists while the peril of total loss exists, but when the article is saved from that peril, the right no longer exists. The right of abandonment was not exercised in due time, not until after the peril had ceased.” (See 7 and 15 East., supra.) The case of De Peyster v. The Sun Mutual Ins. Co. (19 N. Y. R., 272), has been cited by me as sustaining the right to recover in this case. It is also one of the cases relied upon by the defendant, to sustain the judgment of the court below. The' case was this : A cargo of hides on board a vessel sailing from the Spanish main to New York, was insured, free from average unless general. The vessel sprung a leak, was obliged to throw overboard a portion of the hides; the rest were saturated with water, became putrid, and emitted a stench dangerous to health and life. Making Havana as a port of distress, the hides were found to be entirely damaged. Such of them as were not putrid were directed by the authorities to be sold, the residue were thrown into the sea. Some of the damaged hides were purchased by an American shipper, who sent them to Boston, where they arrived damaged and worn, and were sold at a loss of forty-five per cent. The defendant asked the judge to charge that the plaintiff could not recover for a total loss because a portion of the property remained in specie, and was of some value after the disaster, and after the arrival in Havana. This was refused. The plaintiff recovered, and the Court of Appeals (in 19 N. Y., supra) sustained the verdict. In. the case before us, the stranding of the vessel was, within all the authorities, of such a character as to create a total loss. She was ashore on the most perilous part of the Atlantic coast, in the depth of winter, her main deck submerged, and was incapable of restoration. (2 Par. Mar. Ins., supra.) While thus exposed to the peril of a total loss, the master abandons the vessel, and notice is given to the underwriter. The underwriter employs a wrecker at a great expense to visit the vessel, who, after a labor of some months, is able to recover a small portion of the cargo, among the rest, some *223 bales of the wool, and portions of the coffee, so damaged as to be worthless. The jury have found that this effort to recover the cargo, was a contrivance simply to convert into a partial, what would otherwise be a total loss. In my view of the case, the loss of the coffee was total, and the right to recover became fixed, when the abandonment was made. The rescue of a portion of the contents of the vessel, with whatever motive it was done, did not undo what was already done. It could not convert into a partial loss, that which under the circumstances detailed, the law adjudged to be total. It need not be denied, that many of the New York cases give countenance to the doctrine contended for by the respondent. I have endeavored to show that they may be sustained without sustaining that doctrine. The rule as established by the recent English cases, and the cases in Maine and Connecticut, and as laid down by the elementary authors cited, is, in my judgment, the true rule, and shordd be so declared by this court. The order of the General Term should be reversed with costs, and judgment ordered to be entered upon the verdict with costs. All concur. The order of the General Term reversed, and judgment ordered for the plaintiffs upon the verdict with costs.