Fulton Insurance v. Goodman

RICE, C. J. On the trial in the court below, it was a material question, whether the insured was justified in abandoning as for a technical total loss; and we shall, in the first place, -inquire whether, in the charges of the court in relation to that question, there is any error which entitles the underwriters to a reversal of the judgment. Those charges are reconcilable with and explanatory of each other-, and must be construed in connection with each other, as well as in connection with the evidence to — 126 — wbicb they were applied; and if, when thus construed and applied, they are correct, though as universal propositions they may be erroneous, they do not warrant a reversal of the judgment. — McBride v. Thompson, 8 Ala. R. 650; Berry v. Hardeman, 12 ib. 604; Lockwood v. Nelson, 16 ib. 294; Hopkins v. Scott, 20 ib. 179; Dill v. Camp, 22 ib. 249; Partridge v. Forsyth, 29 ib. 200. Construing the charges as above indicated, we understand, and the jury doubtless understood, (see Magniac v. Thompson, 7 Peters’ Rep. 348,) the expressions “practical men” and “reasonable men,” as therein employed, to refer to practical men and reasonable men as a class, and not merely to the persons who were on the boat at the time she was snagged and sunk, some of whom had testified as to her condition and the circumstances attending the injury. ¥e also understand, and the jury doubtless understood, the expression “ half her value in the market,” as employed in the explanation accompanying-the 8th charge asked by the underwriters, to refer to her value in the market at Mobile, the palace of repairs. At the time of the accident, Mobile was her port of destination, her home paort, the port of repairs, and the palace of the trial ; and, in the second charge, the court had distinctly made the right to abandon to turn on the question, whether “the injury to the boat was such that her repairs would cost more than half her value when repaaired, at the port of repairs.” The underwriters contend, that the first charge excepted to put the case altogether on the opinion of practical men, and excluded from the jury the consideration of the facts. They treat that charge as if it had commenced as follows, to-wit: “If, in the opinion of practical men, the condition of the boat was such,” &c. But the charge does not so commence, nor does it convey the meaning which it would convey if it had so commenced. On the contrary, it clearly leaves it to the jury to determine for themselves — 1st, what was the condition of the boat; and, 2d, whether its condition was, in fact, such as to produce — that is, whether its condition was really sufficient to produce — in the minds of practical men gener — 127 — ally, the opinion that the great and apparent probability was she could not be raised and repaired. The substance of the charge was, that if the jury found from the evidence that the eonditionof the boat was such as to produce that opinion in the minds of that class of men, it was sufficient to justify an abandonment. That charge made the right of abandonment to depend upon the condition of the boat at the time of the abandonment, and the conclusions which practical men generally ought then to have drawn from that condition. — 2 Phil, on Ins. § 1524. "We understand the other charges relating to the abandonment to assert, as applicable to this case, the following propositions, to-wit: That if the injury to the boat, occasioned by a peril insured against, was such that her repairs would cost more than half her value when repaired, at the port of repairs, then the assured had a right to abandon; that “ to recover for a constructive total loss, the injury must amount to half the value of the thing insured;” that it was the duty of the master and crew, to labor and travel in order to relieve the boat from her peril, and, if they failed in this duty, the assured cannot recover; but that they were not bound to do impossibilities, and if it appeared to practical men that the boat could not be saved, they -were justified in abandoning her, and were not bound to wait for the decision of the underwriters on the offer to abandon; that “the true condition of a vessel at the time of abandonment may be arrived at by evidence of the state of things derived from a subsequent attempt to raise and repair her: if the vessel has since been raised and repaired, at an expense of less than half her value in the policy, it is evidence that 'the assured had no right to abandon her.” It is evident, that, if there be any error in the last proposition, it is an ei’ror in favor of the underwriters, and, therefore, no ground for reversal on their appeal; and upon a careful examination of the authorities, our opinion is, there is no error in any of the other propositions. [2.] “ The right of abandonment,” says Chancellor Kent, “ does not depend upon the certainty, but upon the high probability of a total loss, either of the property, or — 128 — voyage, or both; Tbe insured is to act, not upon certainties, but upon probabilities ; and if tbe facts present a case of extreme hazard, and of probable expense, exceeding' half tbe value of the ship, the insured may abandon, though it should happen that she was afterwards recovered at a less expense.” — 3 Kent’s Com. 321. An “actual experiment is not, in general, necessary for ascertaining* with reasonable certainty the probable cost and result of the undertaking ” to relieve and repair the vessel, nor the only means of proving it. “ Men adopt the most important resolutions, undertake or abandon the most important enterprises, upon such estimates of the probable cost and result as experience and observation can furnish,” or as may be derived from the opinion of practical and reasonable men; “ and facts upon which tbe most important interests depend are constantly determined upon such probable inferences as satisfy a reasonable mind.” If the right of abandonment is to be available at all to the assured, in cases like the present, he must exercise it in reference to such an estimate of probabilities as prudent and discreet men are accustomed to act upon, and upon a fair view of every circumstance affecting the question of the practicability or probable cost of relieving and repairing the vessel; and the propriety of its exercise is to be finally judged of and decided by the like considerations, and by a due regard to any actual experiment, made by others, to relieve and repair the vessel, but is not to be conclusively established or negatived by any such experiment. — Cincinnati Insurance Co. v. Bakewell, 4 B. Monroe, 541; Bradlie v. The Maryland Insurance Co., 12 Peters, 378; Roux v. Salvador, 3 Bing. (N. C.) 288; Peele v. Merch. Ins. Co., 3 Mason, 27; 2 Arn. on Ins. 990-998; ib. 1052, 1059, 1092, 1111. In this connection, it is proper to state, that the last portion of 10th charge asked by the underwriters is in conflict with the principles above sanctioned by us, and was properly refused. The last proposition asserted in that charge, exacted too much of the plaintiff. It denied him the right to recover for a total loss, if the boat “ could have been” raised and repaired “at a cost not exceeding — 129 — half her value.” It put the right rather on a 'possibility, than upon the high probability of a total loss. In view of the evidence, and of the fact that the underwriters themselves agreed to pay, and did pay, to persons having no interest in the policies or in the boat, a certain amount for raising the boat and bringing her to Mobile, (her home port, port of destination, and of repairs,) we do not think they have any right to complain of the charge of the court, that “ in estimating the expense of repairs, the jury should take into consideration the amount paid by the insurance companies for raising the boat and bringing her to Mobile, if such expenses were fairly expended” (incurred.) — 2 Arn. on Ins. 1100, 1101, and cases cited in note (m) on the last cited page; 3 Kent’s Com. 323, 324, 330; 2 Phil. on Ins. § 1551. [3.] In the policies here sued on, the boat is valued at 122.500, and the following clause occurs: “It is agreed, that the assured shall not have the right'to abandon, as for a total loss, unless the injury sustained be equivalent to fifty per centum on the value of the interest owned by the assured.” Upon the question, wrhat is the value of the boat with which the cost of repairs is to be compared, the charge of the court, when construed in connection with the evidence and the other charges, is understood by us to be, that it was not the value named in the policies as the agreed value of the boat, but her value in fact, when repaired, at the port of repairs. There is no error in the charge as thus understood by us, nor in the refusal of the 6th charge asked by the underwriters. As applicable to cases like the present, we sanction the principle announced in the following extract from the opinion of the supreme court of the United States, in Bradlie v. The Maryland Ins. Co., supra, “ that if, after the damage is or might be repaired, the ship is not or would not be worth, at the place of repairs, double the cost of the repairs, it is to be treated as a technical total loss.” — 2 Arnould on Insurance, 1105-1112. [4.] A “ valid abandonment ” is one warranted by the state of things existing when notice of abandonment is given. — 2 Am. on Ins. 993. An abandonment, made — 130 — when not warranted by the state of things existing at the time it is made — in other words, an abandonment made when no right of abandonment exists — is invalid, and, if not accepted, cannot acquire validity from any subsequent circumstances, the existence of which at the time it was made was essential to the existence of the right of abandonment. But, where an abandonment as to a mortgaged steamboat is warranted by the state of things — in other words, where the right to abandon the mortgaged boat actually exists — and where an abandonment, mad® or offered by the mortgagor, would be valid if assented to by the mortgagee, the underwriters are precluded from urging the want of his assent as an objection to its validity, if, at the time it was so made or offered, “they knew of the existence of the mortgages, and did not reject the abandonment on account of the mortgages; and if shortly afterwards, and when the abandonment or offer of abandonment by the mortgagor was unrevoked, and the boat, so far as the mortgagor was concerned, was still at the disposal of the defendants, (the underwriters,) the mortgagee did assent to and approve of such abandonment by the mortgagor, and did make known such his assent and approval to the defendants,” (the underwriters.) If, when the abandonment was offered by the mortgagor, the underwriters had stated, as a ground of objection to its validity, that the mortgagee had not assented to or approved of it, the objection would have been open to them at the trial. In such ease, it would have been competent to the mortgagor to have promptly obtained the mortgagee’s assent to an abandonment, and to have again offered an abandonment accompanied by such assent. But the underwriters, with knowledge of the existence of the mortgages, did not rej ect the abandonment on account of their existence, and elected not to state as an objection to its validity the want of the assent of the mortgagee. By electing to pursue that course, they misled the plaintiff, and, doubtless, prevented him from promptly obtaining the assent of the mortgagee, and again offering an abandonment accompanied with such assent. The principles of good faith, recognized in the law of insurance, — 131 — require us to bold that, upon the facts hypothetically stated in the 4th charge of the court below, the underwriters have waived their right to urge the mere want of the assent of the mortgagee as an objection to the validity of the abandonment offered by the mortgagor; and that, as to them, the abandonment is valid. That charge does not proceed upon the idea, that the underwriters, by their mere silence, or otherwise, had accepted the abandonment; but upon the ground, that there was a waiver of their right to insist upon a particular objection to its validity. 2 Arn on Ins. 1173; Skyring v. Greenwood, 4 B. & C. 281; Richards v. Browne, 3 Bing. N. C. 493, and cases there cited for the defendant. If, upon the facts hypothetically stated in the 4th charge, and the uncontested facts of the case, the underwriters had'accepted the abandonment offered by the mortgagor, as soon as the mortgagee made known to them his assent to it, the acceptance would have invested them with the ownership of the boat, with all its chances— with everything that an acceptance of the most perfect and unobjectionable offer of abandonment could have given to them. "Where such an offer of abandonment is made, and the right of abandonment exists, the underwriters ought to be held to have waived every objection to the offer, which was known to them at the time, but not stated as a ground of objection, and which, if stated at the time, could have been promptly removed or remedied by the assured, and which does not deny the existence of a right of abandoment. Mere silence may not amount to an acceptance. But the silence of a party, whose duty it is to speak, may operate as a waiver. When his silence, however innocent in its origin, would operate ultimately as a fraud, if he were allowed the benefit which he claims from it, the law of insurance will not permit him “ to resist the claims of justice under the shelter of a rule framed to promote it.” [5.] The 5th charge asserts two propositions, both of which are fully sustained by the American authorities, and are approved by us. — 2 Arn. on Ins. 993, 994, and cases cited in the notes by J. C. Perkins; ib. 1161; — 132 — 3 Kent’s Com. 324; Bradlie v. Maryland Ins. Co., supra. [6.] We understand the 6th charge, when construed in connection with the other charges and the evidence, to assort the proposition, that when a mortgaged boat has been abandoned by the mortgagor, and the mortgagee has assented to and approved of the abandonment, and made known such his assent and approval to the underwriters, and they have raised and repaired her, and have given notice that they will not longer be responsible for her,— “the fact ” that the mortgagee, after all this, took possession of her and sold her under the mortgages, “to protect the interest of all concerned,” “would not have the effect of waiving the abandonment.” To that proposition we give our assent. A valid abandonment transfers “the right of property to the underwriters, to the extent of the insurance, from the moment of loss.” — 2 Arn. on Ins. 996. The assent to, and approval of such abandonment, on the part of the mortgagee, operates necessarily as a discharge of his mortgages, so far as the boat is concerned. — Long v. Wallis, 16 Ala. R. 738. A mortgage, discharged in this mode, cannot certainly be revived by the mere act of the mortgagee; and a sale of the boat by him, under his mortgages, after such discharge, could not deprive the mortgagor of a right to recover as for a total loss, vested in him by a previous valid abandonment, nor operate as a revocation or waiver of the abandonment. The mortgagee was not, in fact or in law, the owner of the boat; and his mistake of the legal effect of the existing foots could not make him her owner. Not being the owner, but having discharged his mortgages, so far as the boat was concerned, by his assent to and approval of the abandonment by the mortgagor, we cannot see how he could, by a subsequent sale, revoke or waive the abandonment, without any intention to do so, and without the assent of the mortgagor. We therefore hold, that there is no error in the 6th charge given by the court, nor in refusing the 2d, 4-th and 12th charges asked by the underwriters. — 3 Kent’s Com. 324; 2 Arn. on Ins. 1175-1178. If the 9th charge asked by the underwriters had been given as asked, it would have authorized the jury to find — 133 — against the right to abandon, although they might have believed from the evidence that the boat was “wrecked,” and so injured as to require repairs to the extent of more than half her value; for the jury, although believing that, might also have believed the expense of raising and repairing her to be “ a reasonable expense.” The right to abandon, in ease the boat was “wrecked,” does not depend upon the opinion of the jury as to the mere reasonableness of the expense of raising and repairing her. [7.] In the policy of the Franklin Insurance Company, (a company not sued by the plaintiff,) there is a clause in the following words: “And in case of the neglect or refusal of the assured, their agents or assigns, to adopt prompt and efficient measures for the safeguard and recovery thereof, then the said company shall have the election to interpose and recover said steamboat, or any part thereof) and cause the same to be. repaired,” &c., &e. This is the clause which we suppose is referred to in the last part of the 13th charge asked by the underwriters here sued, and which is assumed by that charge to enure “as well to the Fulton Insurance Company, as to the Franklin Insurance Company,” &c.” It is evident that the clause secures to the Franklin Insurance Company only a mere “ election.” That “ election ” has not been exercised by it; and how it can enure to the underwriters here sued, whose contract does not secure to them any such election, passes our comprehension. ¥e cannot assent to the proposition, that when A, by his contract with B, secures to himself an election; and C, by his contract with B, does not secure any such election, the election of A enures to G, — especially if the election of A has not been exercised. . ’ The exception to the 11th charge asked by the underwriters was -waived by the agreement of the counsel of the parties, sot out in the record immediately after that charge. The 14th charge asked relates to a case of “partial loss,” and need not here be considered, as the jury were “ requested by both parties to say in their verdict whether they found the loss total or not;” and, according to such request, found the loss to be a technical total — 134 — loss. It is plain from the finding of the jury, that a charge as to a “partial loss," even if erroneous, did not injure the underwriters; and, therefore, such a charge would not authorize of reversal. [8-9.] The underwriters “ objected to the competency of Duke "W". Goodman, on the ground of interest.” That was the only ground of objection stated in the court below, and is, therefore, a waiver of every other ground. Creagh v. Savage, 9 Ala. R. 959. We shall not consider whether he was incompetent upon grounds of public policy, or by reason of section 2290 of the Code; but we shall confine our decision to the question, whether he was incompetent “on the ground of interest.” According to section 2302 of the Code, interest in the event of the suit does not render the witness incompetent, “ unless -the verdict and judgment would be evidence for him in another suit,” that is, evidence for him to prove something more than the mere fact of their rendition. Upon the authority of Atwood’s Adm’r v. Wright, 29 Ala. R. 346, we decide, that the verdict and judgment here cannot be evidence for Duke W. Goodman in another suit, to prove anything beyond the fact of their rendition, (as to which they would be evidence against all persons;) and that there was no error in overruling the objection to him “on the ground of interest.” We find no reversible error in the record, and affirm the judgment.