Gracie v. New-York Insurance

Kent, Ch. J. delivered the opinion of the court. The' plaintiff refused to abandon to the defendants the proceeds of the cargo at Leghorn, and claims the amount of the bond which he was obliged to give, and since to pay, on receiving back the cargo in France. His claim is equal, and even superior in amount, to what it would have been, if the property had perished ; for the bond was for a sum equal to fifty per cent, advance upon the-prime cost. The whole difficulty in this case arises from the refusal to abandon; for there cannot be a doubt, upon the correspondence between the parties, that no such abandonment was made. There were two subjects to which the abandonment might apply, viz. the hope of ultimate compensation from the French government, and the proceeds of the cargo at the port of destination. AH the books agree that the assured is never obliged to abandon; and if he does not, he is always entitled to-recover to the extent of his loss. The object of abandonment is to turn that into a total loss which otherwise would not be so. But here the loss is equal to a total loss, and the plaintiff must recover the amount of the bond, (at least as far as the subscription covers it,) or nothing at all, for there is no rule by which the damages [245] can be estimated at any less sum. To attempt to ascertain the value of the spes recuperando as it respects the claim on the French government, and to deduct that value from the recovery, appears to me to be useless. I cannot assent to what was said upon this point in the case of Watson & Paul v. The Insurance Company of N. A. (1 Binney, 47.) for a jury is wholly incompetent to calculate that value. There is no possible rule of computation. Where any part of the property exists in specie, a jury may have a rule to go by ; as when a vessel is stranded, and is still alive; but it would be perfectly arbitrary to undertake to estimate the worth of such a hope, in this case. If that hope does legally exist, so that it can be judicially regarded, the plaintiff ought to renounce it in favour of the insurer, or not recover at all. But there is no existing hope of recovery in this case. The law had pronounced a definitive sentence in the highest tribunal. The condemnation was affirmed in the last resort, by the emperor himself, and any chance of reimbursement under that sentence must be the result of future negotiations between the two governments, and that is a subject totally unfit for the investigation of a jury. No court is competent to act upon such speculations. And if France should, at any future period, agree to, and actually make compensation for the capture and condemnation in question, the government of the United States, to whom the compensation would, in the first instance, be payable, would become trustee for the party having the equitable title to the reimbursement, and this would Clearly be the defendants, if they should pay the amount of the bond. There would be no doubt of their claim in equity; and the case shows that the plaintiff offered to give them the requisite authority to assert this claim upon the French government. But all this was useless. No individual could prosecute this claim. There was no further appeal left. There was no legal redress [246] remainin8") i$1 contemplation of law, and, therefore, there was no spes recuperandi existing, or none which could ke tke subject of liquidation. An abandonment, then, as to this point, would have been as idle as if the property had perished at sea. It is settled, that if a total loss actually exists, the assured may recover as for a total loss, without abandonment. To make an abandonment when there is nothing to abandon, is absurd. The case then comes to this, whether the plaintiff cannot recover the amount of his loss, without abandoning the proceeds at Leghorn. If he cannot, he must either be content to bear the heavy loss of the amount of the bond, or content himself with the prime cost and charges, and suffer the insurer to reap the gain and profit of the voyage. Neither alternative is within the spirit or equity of the contract. The insurer has nothing i to do with these proceeds any more than he would have, ¡if the vessel had been robbed on the voyage of part of 'her cargo, or the captain had been compelled to ransom the vessel from pirates. He is bound to save harmless the assured from such intermediate loss. If the plaintiff recovers the amount of the bond, he is only indemnified, and is placed in the same situation, as if the peril had not intervened. If the intervening peril had produced a loss of less than the prime cost;- say, for instance, a loss of 60 per cent, there would have been no difficulty about the recovery; for that was the case in M'Masters v. Shoolbred. (1 Esp. N. P. 237.) In that case, there Was a capture and repurchase, and no abandonment; and Lord Kenyon ruled, that the plaintiff was entitled to his indemnity, as in the case of a ransom, which was the sum paid for the repurchase of the ship and the expenses", amounting to an average loss of 60 per cent. So it was said by Lord Mansfield, in the case of Goss v. Withers, that if, after condemnation, the owner recovers the ship captured, but has paid salvage, or been at any expense [247] in getting her back, the insurer must bear the loss actually sustained. Whether the amount of the ransom, or salvage, or repurchase, in these cases, falls short or goes beyond the prime cost of the subject, does not alter the principle, nor affect the question of abandonment. The - assured receives no more than his indemnity, by being reimbursed the sum he has paid. The voyage goes on, and becomes a matter of profit or loss, precisely as if the peril had not happened. I'do not perceive any principle that requires the assured to abandon the property so reclaimed, when the amount of the money paid exceeds the prime cost of the article, and which does not require it when the amount is less. He is only to abandon when he goes for the whole subject as lost, and part of it remains, or the hope of its recovery exists. He is not to make a profit of the insurance. He is not to be paid for the whole subject while he retains part, or is supposed to be capable of recovering part. He shall recover only as for an average loss, provided it be a .case susceptible of computation as an average loss. But in this case, he asks only for the money he has been obliged to pay. He cannot possibly make the insurance lucrative. He asks only to be indemnified from the peril; and whether the property recovered went to a rising or falling market, is a question not belonging to the case. That event remains the same as if there had been no capture. If property be ransomed from pirates or enemies, or recovered from shipwreck, at a loss of 60 per cent, the remainder may possibly go to a market which will render the voyage profitable, even if there had been no insurance, and the expense incurred was a dead loss. So the voyage may be ruinous, if only one per cent, be taken away by a peril, and that one per cent, be insured. The insurer, in a case like this, has nothing to do with these results. He must Return the money which the assured has been obliged to [248] pay, in consequence of a peril, provided it was fairly and bona fide paid, and does not exceed the amount of his subscription. I am aware that the French law of insurance is differ* ent, as the ordinance of the marine has a particular and very equitable provision on this subject. If the insurer, under that ordinance, be called upon to pay the amount of a ransom or composition, he is entitled to take the profit of it, by becoming proprietor of a portion of the effects redeemed, in a ratio to the amount of his subscription. (Ord. des Assurances, art. 67, 68. 1 Emerig. 467. 472.) But the English rule is otherwise. The insurer must pay the amount of the composition, if it be reasonable and bona fide, without being entitled toany interest in the proceeds. This not only appears from the cases already referred to, but from the decision in Berens v. Rucker, (1 Black. Rep. 313. Park, 89. 6th edit.) which has always been regarded as good law. Nor is the assured, in this case, to be limited to the prime cost of the subject. That is only resorted to when it becomes necessary to ascertain the value of the subject insured, or what is the same thing, the amount of the loss. It is a rule of computation which ceases when the parties have fixed the value, or it can be ascertained (as in this case) by another and more obvious rule, viz. the sum actually paid. The latter is in this case the just and certain test of the amount of the loss, and I do not know of any decision or principle which forbids us to resort to it. The court are accordingly of opinion, that the plaintiff is entitled to judgment for the amount of the verdict. Judgment for the plaintiff,