Hall v. Ocean Insurance

Putnam J. delivered the opinion of the Court. This is an action upon a policy of insurance, for $ 2,000 upon the brig Alvara, valued in the policy (premium included) at $ 4,000. The risk was for one year, and it was proved that within the year, on her passage to the West Indies, sea damage was sustained to a .considerable extent, which rendered it necessary for her to go to Bermuda in distress, to be repaired. Two surveys — 478 — were there had, and the result was, that the captain undertook to sell the brig. And the question is, whether there was a legal necessity for the sale. If there was, the plaintiff should recover for a total loss ; but otherwise the defendants should be subjected only to a partial loss. According to the plaintiff’s estimate, founded on the surveys, the amount falls short of one half of the amount insured. But the plaintiff claims a right to add 25 per cent to the items of expenses, and with that addition there would be a technical total loss. And the jury have found a verdict accordingly, although it does not very satisfactorily appear, that there was any reason to suppose that the estimates at Bermuda were not sufficiently high. The vessel was sold and repaired, so as to be seaworthy to go to Turks Island and carry a cargo of salt to New York, at a sum greatly within the estimates. The defendants moved for a new trial, on the ground, that the verdict was against the evidence. But as a new trial is to* be had for other reasons, it will not be necessary particularly to examine the evidence in the cause. The judge who presided at the trial, ruled several points which are sustained by the whole Court. • 1. That to make a technical total loss there must be proved a loss to the amount of 50 per cent on the sum insured, including the premium. 2. That in making the estimate of the loss, to ascertain whether it amounts to 50 per cent, the items which should be properly carried to the account of general average, should not be included. 3. The expenses incurred to ascertain the extent of the loss, should not be included in the charges, to make up the 50 per cent. The principal ground on which the motion for a new trial has been granted, is in regard to the instruction, that wages and provisions, after the sale of the cargo on January 12, 1836, until a reasonable time had elapsed for the repair of the vessel, should be allowed and added to the items of partial loss, to ascertain whether a technical total loss had occurred m t.he case. And we all think, that the accuracy of that proposi — 479 — tion cannot be maintained. The general average expenses have no tendency to show the amount of the particular average of the shio. The former must be paid, whether the ship is repaired or not. Those expenses arose in the saving of the snip, &c.. from the impending peril, and placing the same where the owner could survey her, and make a reasonable estimate of the expenses requisite to repair her. But those expenses are to follow afterwards. They are not increased or diminished by the greater or less sum which has been or will be paid upon the contribution to the general average. In Stevens & Benecke, by Phillips, 367, note, it is well observed, that “ the loss by stranding is often both general and particular average; the general average, consisting of the expenses incurred for saving the ship, cargo, and freight, in common ; the particular average, in the distinct damage and loss on each interest.” So, if the damages happened by extraordinary perils of the sea and it became necessary to seek a port for the safety of the ship, &c., the expenses of navigating her there should be brought into general average, and the particular average on the ship would be borne by the owner of the ship. 1 Phillips on Ins. 347 ; Padelford v. Boardman, 4 Mass. R. 548. Mr. Phillips has set down with considerable particularity many of the items which are to be considered as general average charges. Now in the case at bar, the inquiry was, whether there was a particular average exceeding 50 per cent of the value in the policy. If there was, then there was a technical total loss ; otherwise, if not. The calculation should be made upon the amount which would be required to put the vessel in complete repair, without reference to or including the expenses which had been already or should be incurred, which were to be paid by general contribution. But it occurred to the judge at the trial, that the services of the officers and people might be wanted during the time when the repairs should be making, and if they should be discharged and the vessel should be repaired, that it would be difficult, if not impossible, at some times and places, to procure other officers and seamen to prosecute the voyage; and it was under this impression, that the instruction was given, “ that a reason» — 480 — able allowance for portage bill, including wages and provisions of officers and crew for such reasonable time as would be requisite to make the repairs, should be allowed as part of the cost of the repairs ; that, therefore^ if the jury were of opinion, that the sum estimated by the surveyors, of $ 217 for wages, and $75 for provisions, was the reasonable amount, and one and a half month the reasonable time, then those sums ought to be put down towards the partial loss of 50 per cent, necessary to justify an abandonment ; that if the jury were of opinion, that these sums were too high, they should make such deductions as to bring them within the reasonable amount of the portage bill to the time required ; that these ought not to go to general average, but should, in the first instance, be adjusted as part of the partial loss ; that this allowance should be put down without the deduction of one third new for old ; and that if the voyage was ended at Bermuda on the 12th of January, 1836, right or wrong, necessary wages and provisions thereafter for a reasonable time for the repairs, should be charged to partial loss.” It is very clear, that such charges are not to be put to the account of general average ; they would not be sustained for the general good, but for the particular benefit of the ship. The voyage was broken up ; and it seems to us that the owner of the ship must bear these, as he bears the other expenses incident to the ship. He would have no claim upon the underwriter for those charges. It may be a very prudent thing for the master to pay a mate and seaman for a month or more, for holding themselves in readiness to serve at a minute’s warning, under such circumstances ; but that expense would be a charge upon the freight. It would cost the owner of the ship just so much more to earn his freight, than it would if he were not subjected to the payment of extra wages or services. But the services of the officers and seamen might be rendered by them as laborers, in making the repairs ; and in such case their labor would be chargeable, just as if other laborers had been employed to make the repairs. And it would be necessary, that some person should be employed on the part of the owner to superintend the repairs, whose work or business should be, to see that they were completely made ; and — 481 — this charge is to be considered as for part of the labor employed in the reparation. “ But,” says Benecke, (Phillips’s ed. 158,) c< provisions and wages during a detention, the expenses of which belong not to general average, cannot, according to the nature of the subject, be considered a particular average at the charge of the underwriters of the vessel, but must be paid out of the freight.” Benecke & Stev. (Phillips’s ed.) 389, 390 ; Abbott, part 3, c. 8, § 7. Indeed it is provided by a clause in the policy, that the underwriters are not answerable for wages and provisions except in general average. They are to be borne by the owner of the ship during quarantine. 1 Phillips on Ins. 345. And so if the vessel should be frozen up in the ice and the voyage should be prolonged in an extraordinary manner, the extra charge of the portage bill is never made against the underwriters upon the ship. And one third of the expense of labor, as well as of the materials employed in making the repairs, is to be deducted. Benecke & Stev. (Phillips’s ed.) 385. It was objected for the defendants, that they were not liable to pay for the boat which was carried away from the stern. The judge left it to the jury to decide, whether, according to the custom of Boston, the loss of the boat at the stern davits should be charged among the items of particular average, to make up the 50 per cent. If it had been cut from the stern, it would have been paid for in general average. Lenox v. United Ins. Co. 3 Johns. Cas. 178. It was there considered as a necessary part of a ship’s furniture. And we consider it in the same light, and as part of the ship, as between assurer and assured. Roccus, p. 19, note xx. is of a different opinion, where the question is between vender and vendee, holding that the boat would not be considered as an appurtenance of the ship. And so vnen the ship is confiscated ; the boat is not included in the decree of confiscation. He assigns the reason to be, that penal laws are to be construed strictly. In England, for the purposes of insurance, the boat is considered a part of the ship. — 482 — 1 Phillips on Ins. 255, and case there cited ; Blackett v. Royal Exch. Ass. Co. 2 Crompt. & Jervis, 244. We think it is to be considered as included in the policy upon the ship, tackle, apparel, and furniture, or other words equivalent ; and that prima facie the insurers are liable. It was not competent for the defendants to give in evidence the opinions of witnesses, that the defendants were not liable to pay for the loss of any part of the ship’s furniture oi appurtenances, which was included in the terms or description of the property insured. Such parol evidence would contradict the written contract. But there is a rule of law which is of universal application, that a party shall not recover for an injury or damage incurred from his own fault. If the boat was improperly carried or slung at the stern davits, the underwriters are not to be charged with the loss of it. But the burden would, be upon the defendants, to show a good reason why they should not pay for the loss or damage of any thing which is prima facie included and covered by the policy. And we think, that, in the case at bar, they have failed to sustain their defence in this respect. The Court are all of opinion, that the particular average loss *s to be made up in the usual mode, deducting one third new for old, independently of the general average and of the expense of ascertaining and proving the loss ; and if upon such a calculation the sum exceeds one half of the amount insured, then, and not otherwise, the insured has a right to abandon for a total loss ; and if there were no cause of abandonment, there would be no necessity for a sale of the vessel on account of damage merely ; that, in making the computation, the sum stated in the valuation, including the premium, is to be regarded ; that to make.it a technical total loss, the expenses of the repairs, deducting one third new for old, must exceed one half of that sum ; that a fair allowance for superintendence and for the custody of the vessel, if necessary, while the repairs are going on, should be made, which allowance is to be charged to the account of labor, from which, one third is to be deducted ; but that wages and provisions of officers and crew while the ship is undergoing repairs, are not to be computed as pair of the particular average. — 483 — There are other points which arose in this cause, which have been considered and decided in the case of Orrok v. The Commonwealth Insurance Company, to which we refer. The result is, that a new trial must be had, unless the plaintiff shall, upon advising with his counsel, elect to take a verdict for a particular average loss on the vessel. Considering that the expenses of the repairs, even if the wages and provisions and other items in the portage bill, which were general average charges, were included, would not amount to 50 per cent, according to the estimates in the case, we have thought it proper to make this suggestion. Verdict set aside and new trial granted.