Deblois v. Ocean Insurance

Putnam J. delivered the opinion of the Court. We proceed to consider the validity of the points made in the defence. 1. That the taking in the mackerel at St. Thomas and disposing of it at Ponce, was a trading from port to port, and so not within the protection of the policy. 2. If not so, and if it were taken on board as ballast, yet as it was taken out at Ponce, and no ballast put on board, the vessel was not seaworthy in the passage from Ponce to Guayama. 3. That the return to Ponce to complete the voyage was a deviation, inasmuch as there is no liberty given in terms to go backwards and forwards, or more than once to the same port. 4. If the defendants are liable at all, it is only for a partial loss. As to the first objection, we think that the taking in the mackerel was lawful, for two reasons : 1. because there was no delay, increase or variation of the risk occasioned thereby ; — 308 — and 2. becasue it was wanted for ballast, after a considerable part of the outward cargo had been unloaded there, and the x'essel was rather crank on her outward passage. As to the second objection, going from Ponce without replacing any ballast for the mackerel which was taken out there, xxe do not think the evidence in the case is sufficient to warrant a verdict of unseaworthiness on that account. The voyage from Ponce to Guayama is an inland navigation, which for aught that appears might be safely performed by the Pedler without taking in any more ballast. But there is another answer. If it were not proper to make that passage xvithout more ballast, yet it was no breach of the original implied warranty of seaworthiness, but a neglect to keep the vessel in that state. And if she had been lost in consequence of such neglect, the defendants might have availed themselves of that neglect. But she made the passage in safety. The defect, if there were any, was cured. For it is not suggested that she was not in good sailing trim, when she left the West Indies upon her returning voyage to the United States. The validity of the third objection, will depend upon the true construction of the policy. The voyage or risk is described, “from Boston to St. Thomas and.a market in the West Indies, and at and from thence to a port of discharge in the United States. Premium 2§ per cent., to add one fourth per cent, if to more than one port.” This is what is called a West India voyage. The object is obvious, viz. to get the outward cargo to a market, and to procure a return cargo. She proceeded to St. Thomas, the first port named in the policy. If there were no market there, she might go from thence to any port in the West Indies for a market, and to effect that object, it seems to us to be very clear, that she was not confined to any order, but might look to the expected profit to be made, rather than to the geographical position or convenience of visiting the several islands in the West Indies. It would unquestionably be otherwise if the West Indies, were between the termini of the voyage, and the vessel had liberty to touch and trade on her passage. In such case she must take the ports in their convenient and geographical order. — 309 — so as to make as little deviation from the direct course as could be reasonably expected. We must constantly bear in mind, that the vessel was seeking a market. Suppose that her cargo was lumber, and that after leaving a port where there was no demand for it, that place should be destroyed by fire, and the news should be received at another port, we can see no reason, why she might not return to the first port, where, in consequence of the fire, a most advantageous market might be procured for the cargo. The words, and a market, seem to us necessarily to confer the liberty of returning to a port, once and again, if such return were with the honest intent to find a market. In Maxwell v. Robinson, 1 Johns. R. 333, upon a policy “ from New York to Barbadoes and a market,” it was held, that the vessel might bond fide go from island to island until her whole cargo should be disposed of. So long as the vessel was seeking a market in the West Indies, it seems to us clearly, that she was within the protection of the policy ; clearly within the words and spirit of the contract. But we think that the counsel for the defendants are right upon their fourth point, viz. that they are liable only for a partial loss, if liable at all. Upon this point, the counsel for the plaintiffs contend, 1. That if a vessel is so far a wreck, that she cannot oe repaired, except at a cost exceeding her value, the loss is total, without abandonment. Gordon v. Mass. F. & M. Ins. Co. 2 Pick. 249 ; 2 Phillips on Ins. 279 ; Hughes on Ins. 384 ; 2. That this value is to be settled at the time and place of the wreck, even in a valued policy. Peele v. Merchants Ins. Co. 3 Mason, 27 ; 2 Phillips on Ins. 287 ; and, 3. That the above are the general rules of law, and are not altered by the form of the Boston policies, except in a case where abandonment is necessary to make a total loss, when the value in the policy governs ; and that in this case the assured did not claim under an abandonment, nor for a constructive total loss, but for an actual total loss. Now it is a fixed rule, that if the ship be injured by the perils insured against, so as to require repairs to the extent — 310 — of more than half her value, the insured is entitled to abandnr as for a total loss. Peele v. Merchants Ins. Co. 3 Mason, 27 That position of the eminent judge of the Supreme Court ot the United States for this circuit, is proved by the many au thorities cited to that point. This rule will be found among the principles of the law of insurance embodied by Parson; C. J., in a most learned opinion, in the case of Wood v. Lincoln & Kennebeck Ins. Co. 6 Mass. R. 479. He cited very few authorities, but the opinion is well supported in the books One point which he suggested was new to many eminent ju rists, viz. that the underwriters, under certain circumstances may undertake to recover the property at their own expense for the owners. This is thus stated in Weskett, tit. Abandonment, p. 7, § 22, from Valin, 133; “ The insurers maji take such measures for recovery as to them may seen good.” Everybody knew that the assured had that right . but I believe that Chief Justice Parsons was the first American judge who recognised that most reasonable principle it regard to the underwriter. It had a direct application to tha> case. As light and spongy fabrics are reduced to portable size by hydraulic pressure, so the verbose readings of the law were, by the force of his great mind, reduced to. cleat practical rules. That opinion is one among many, in whicl this power of compression and discrimination, is eminently conspicuous. The case (Peele v. Merchants Ins. Co.) in 3 Mason, 27, was the case of the ship Argonaut, which was litigated fot years under circumstances of considerable excitement. It was at first brought before this Court. Afterwards it was sustained under the admiralty jurisdiction of the court of the United States for this circuit, and a decree was made for the plaintiff, accompanied with a most elaborate and learned argument ir support of the decree. An appeal was taken to the Supreme Court of the United States, and it is believed, that the admiralty jurisdiction was not sustained. At any rate the case appeared again in our Court. And it was tried repeatedly ; and the law was ruled according to the case of Wood v. Lincoln & Kennebeck Ins. Co. so far as that case applied ; which in many respects was not conformable to the views of the — 311 — presiding judge of the United States court for this district. Indeed I may now say, and with perfect respect to my very distinguished friend who pronounced that decree, that this Court has entertained opinions in regard to the law of his case, essentially at variance with the opinions expressed in his elaborate argument. At the last trial in this Court, the cause went off upon a fact not involving any disputed legal principle. So that it has not been necessary for this Court to revise the rulings in matter of law, of the judge who tried the cause. Whenever any point has arisen in subsequent causes, which was involved in the case of the Argonaut, it has been declared, as in Hall v. Franklin Ins. Co. 9 Pick. 466, that the assured has no right to abandon because the ship is in imminent danger of being totally lost. And in the cause at bar, we are obliged to declare the law applicable to this case as it was understood and declared in the case of the Argonaut. In the case at bar, the opinion of the learned judge of the United States court in the case of the Argonaut (3 Mason, 27), is urged upon our consideration. But we cannot yield to its reasoning. This is no time for a connected view of the law which this Court entertain in regard to that case. We certainly have no disposition to volunteer on the subject! But when points come up for consideration, which were ruled in that case, and in which the Court are agreed, they will be decided according to our understanding of the law. It became necessary for the judge of this Court who tried that cause, to decide whether the value of the vessel as she lay upon the rocks, or the value as mentioned in the policy, should be taken, in order to ascertain the legal rights of the parties ; and also, to decide whether one third new for ola should be deducted from the expenses of repairing the damage, in order to determine whether a technical total loss had happened. These points had not before been brought expressly before the Court. The presiding judge was of opinion, that the value named in the policy should be taken as the true rule, and that one third new for old should be deducted. And after much consideration of the cases cited in 3 Mason, 27, and of the acute reasoning of the learned judge, there to — 312 — be found, and of other cases which have been seen since touching that point, we are all of opinion, that the ruling of the judge of this Court was correct. In regard to the value, we must recollect it was fixed by the agreement of the parties. So it was in the case at bar. It is admitted that if the vessel were absolutely lost, when returning to her home port, after a three years’ voyage and essential deterioration, the value in the policy should be paid. And we cannot perceive any good reason why that value should not govern, as well when the assured claims for a technical total loss, as when he claims for a loss by the total destruction of the ship; and why it should not govern when the assured would lose, as well as when he would gain by it. It seems to us, that we should have just as much right to set aside the valuation if the vessel should be burnt or otherwise actually destroyed, when she had deteriorated in value, as to say that it should be set aside in the decision of the question, whether or not a technical total loss had happened. If in the case of the utter destruction, the underwriters would not be permitted to prove, that she was not worth half as much when she was lost as when the voyage commenced, why should the assured be permitted to prove that she had deteriorated to that extent, in order to make an abandonment as for a technical total loss, which could not be otherwise maintained ? It would, we think, be making a new contract, which would be essentially deficient in point of mutuality. If the vessel sustained damage at a time vvhen she was in great demand, the owner would repair her. If at a place where there was an embargo, and where vessels were in comparatively little value, then he would work up the repairs to more than half her value in the market there, claim for the w'hole, and throw the vessel upon the underwriter. Wreck or not, total or partial loss, would depend upon the ever-shifting state of the market, and not, as it should, upon the condition of the ship. She might be almost worthless at the place where she was damaged, and in another and perhaps not a distant port, would sustain a fair and reasonable value. It was to avoid these and other uncertainties and causes of litigation and dispute, that the parties agreed upon the valúa tion in the policy. It was to continue the same, although th« — 313 — vessel should grow worse. It was to continue the same wherever she might go under the policy, although she might in some places be worth more and in some places less than the value agreed upon. It was to be coextensive with the voyage as to time and place. And in regard to the deduction of one third new for old, we think there is just as good a reason to apply the rule to the consideration, whether or not there was a technical total loss, as there is to apply it to a partial loss. In the latter case it has been long settled, is uniformly applied, and generally works well. We know that the Supreme Court of New York, in Depuy v. United States Ins. Co. 3 Johns. Cas. 182, held, that “ the rule that the insured may abandon where the repairs exceed half the value, is general, and has no reference to the distinction of one third new for old.” It was an opinion per curiam, and no reasons are given. But this point came expressly under the consideration of the Court of Errors in New York, in Smith v. Bell, 2 Caines’s Cas. 153, where the majority of the Court of Errors concurred with the opinion of Lansing C., that to constitute a technical total loss of a ship by the perils of the sea, she must be in jured to the amount at least of half her value after deducting one third new for old. This is a practical rule, of the utility of which merchants and underwriters may perhaps be as competent to decide as judges are ; and it may not be amiss to observe, that it has been introduced into some, if not all, of the Boston policies. Judges would be influenced, without doubt, by the consideration, whether abandonments for technical total losses ought to be favored or restricted. We are among those, who think that this part of the law of insurance, as it now is administered, is a clear departure from the great principle of indemnity upon which the contract of insurance should rest. According to the original intent surely, the underwriters were to pay the damage, the actual loss. They were not to become ship-owners, brokers, or merchants. This idea was expressed by. Buller J., one of the most eminent judges of England, about fifty years ago. Mitchell v. Edie, 1 T. R. 615. We must decide the law as we now find it. But — 314 — where a construction is to be made, in the absence of bindh.g authority, we prefer that which restrains, rather than that which enlarges the right to make a technical total loss. According to our rule, no injury will be done to the assured. He will have his indemnity for the actual loss, according to the established principles of insurance. We hope that in this State it will be considered as settled, that the value in the policy is to govern ; and that a deduction of one third new for old is to be made in regard to technical total losses, as it is made in regard to partial losses. If after such deduction the expenses of repairs exceed one half of the value in the policy, the assured may abandon, and claim as for a total loss ; otherwise he is to keep the ship and recover for a partial loss only. And we think that the rule will operate beneficially, for toe assured are generally more competent to manage the property that remains, than the underwriters can be. This view of the case disposes of the objections of the plaintiffs’ counsel to the fourth point made by the counsel for the defendants. For if the damage would not amount to one half of the value of the vessel, to be ascertained as is before stated, it would follow conclusively, that the ship was not such a congeries of planks, as Abbott C. J., in Cambridge v. Anderton, 2 Barn. & Cressw. 692, describes a mere wreck to be. That suggestion is utterly contradicted by the facts found in the survey. The vessel was not stranded ; she had suffered much sea damage ; she had been thrown upon her beam ends ; four or five feet of water had got. into her hold, and melted some of the sugar. But it is found that her main hatch was well secured ; and the rest of the cargo of sugar was dry. The injury therefore was not such as to make her a wreck, in such a sense as to entitle the plaintiffs to recover without abandonment.^ If, as is admitted, it were not to an amount sufficient to constitute a technical total loss, a fortiori it could not be considered as an absolute destruction. According to the agreement of the parties, a new trial is granted.