Majority
p. 245Thomas Tom against Paschal N. Smith. ALBANY, August, 1805.
Headnote
ASSUMPSIT upon a policy of insurance on the profits of the cargo of the Mary, from Batavia to New-York, valued at six thousand dollars.In the prosecution of the voyage insured, the vessel experienced such violent weather, as to be under the necessity of bearing away for Saint Christopher’s, where, after a regular survey under a warrant from the admiralty, she was found to be irreparable, so as to carry on her lading, except at an expence of more than half her value. In consequence of this, as the revenue laws of the island forbade shipping the cargo in any other bottom,- it was sold at much about the same price it would have yielded in New-York, and produced on the amount of the sales, a considerable profit. Without being informed of this latter circumstance, the plaintiff, on receiving advice of the being obliged to make for the port of necessity, communicated it to the underwriters, and, on the 5th April, 1199, offered to cancel the policy. The proposition ivas
Profits are insurable eo nomine. If profits only be insured, an a-bandoument is necessary; when there has been no insurance on the cargo, and in such case it must be made early, that the insurer may e-iect either to pay only his loss, or to pay that, and the price of goods, at first cost and charges, therefore .if the assured lie by, and take his goods and sell them, he cannot af-terwards call
p. 246
accepted by some, but refused by tbe defendant. In tbe June following, the Mary arrived, bringing with her bills of exchange for a part of the property sold, and the re~ sidue in rum and molasses, in which it had been invested by the plaintiff’s agent, who was also part owner of ship and cargo. On arrival, the rum and molasses were taken by the underwritten and disposed of, but produced considerably less than they cost. The hills of exchange, were ** * ^ ^ not more -fortunate; for several of them, after being re. turned .and renewed, were finally unpaid, and on 'the whole, a loss was ultimately sustained. . ,
on the under-loss on the profits. But whe-úins rule will apply between different writers on”cargo and profits quere.
, In the- latter end of November 1800, the plaintiff, in consequence of a decision of this court, on an insurance of profits on the same voyage, claimed for a total loss; and, on the 6tit of August 1802, made a, formal abandonment in wriiting,
. Interest,, inability to- proceed with the original lading, and subscription being admitted, the plaintiff to substantiate bis demand adduced an account of profit and loss oq the cargo of the ship Mary, in which the net amount of the cargo sold st St. Christophers, after deductingcommis-sions, freight, insurance, aiid ¿11 other charges, was credited and the loss of the bills of exchange, and produce received in payment, were debited'.
■ Upon the above, facts and statement, a verdict .was taken, for-the-plaintiff, for 657 dollars 50 cents, being- the amount-of the defendant’s right with interest, from 30 day safter, the 5th of April, 1799, subject to tbe opinion qf the court, whether the total loss and interest, from the above period, could be recovered ? or whether the interest ought to commence only from the date- of the abandonment ? or whether judgment ought to be for the defendant? The entry to be modified accordingly, and either party to he. at liberty to turn the case into a special verdict. - .
T. L. Ogden for the plaintiff.
We contend, 1st, That the voyage as to goods, having been defeated, ve are entitled to recover as for a total loss of the profits. 2d. That in an insurance on profits, no abandonment .is necessary. 3d. That if necessary, the abandonment is good,.-as, when it was made, the loss continued total,. 4th, That interest,
p. 247
⅛ due from the expiration of 30 days after the notice of loss given to the underwriters.
The recovery depends on the arrival of the goods1; for 'if they reach their port of destination, though they coiné1 to a losing market, the underwriter is exonerated. -It 13 admitted the voyage was defeated, from the irreparability of the vessel. If so, the right to recover attached. The question then arises whether an abandonment was necessary ? CJn this point the nature of the policy will serve to guide. An insurance on profits, is a'kind of heterogeneous contract, participating in the qualities of a wager,' and of an interest policy. 'Of a wager, because -at the time of subscription, there is no interest existing; of ¿ñ interest, because there is a contingency on which it will arise, and these futnre possibilities the law permits to he Insured. Some of the rales which govern on wager policies, arc equally applicable to those on profits. 'There can be no average loss, nor can there be an abandonment; Because the profits are inseparable from the goods. When they are insured, they, on abandonment, go to the finder-' writer on them, who runs the risk of losing by their sale,' and' therefore has a right to retain what may he gained. This shews the necessity of making the arrival, the'criterion of the right to recover. It is admitted that the goods did not arrive, in consequence of the inability pi the ship to perform her voyage; it follows therefore that a total loss accrued; and, though it was but technically so, still an abandonment could not be necessary, because it could give no control over the goods, and conveyed no property, or interest in them. To abandon therefore was perfectly nugatory. If a loss continue total to the time of action ' brought, in no case is an abandonment necessary, to entitle to recover the foil amount of the insurance. Earle, v. Shaw.[1] If it be not total, then indeed, indemnity fora F rtial tO} all that can be demanded. To ascertain whether the loss be total or partial, we must look to the final result.[2] If that be done here, it will be seen not only ' that the goods never arrived, but that an actual loss on the sales has been sustained. This is established by the ae-eount which was exhibited. The only question then will be, from what period ought interest to be calc.u-
p. 248
dated ?. As abandoiiment was needless, the right to com■pensation arose on the expiration of 30 days after demand, the verdict is therefore correct, and ought to stand. Pendleton and Harison contra. By the decision of Ab^..bott v. Sebor, this court settled that an insurance on profits, was an interest policy. Such it must be, because' in .England, insurances of this sort are permitted.' Le Cras y. Hughes, Marsh. 84, Grant v. Parkinson, Ibid 111. If 3.0, an abandonment was necessary, for whenever the property remains in specie, it exists, unless in the hands of a captor, in the nature of salvage, and must therefore, as a .valuable interest, be relinquished to the -Underwriter. Without denying the doctrine of Earle v. Shaft), we say it .does not apply,, because the assured here, has meddled >vith and assumed a disposition of the property. ■ This case then is exactly within the principle of Mitchell v. Edie, 1 D. ¡X E. 60S. and Allwoodv. Henkle, Park, 112. The plaintiff has traded on the subject of insurance, After remitting, renewing, and receiving damages on seine of the bills, he comes on the underwriter for a-total loss, because a. part of them have proved bad. We contend this policy is on the incident, and that the plaintiff takes to it, by .choosing to retain the principal, The court cannot tolerate the idea, that after an insurance on profitsUo'wó- minc, the.assured shall, at the port of necessity; receive them, and after, managing them in his own way, demand a total loss, because they ultimately turn out deficient, if the determination is to be regulated by -the rules which govern wager policies^ there cannot be a recovery, as the vessel did arrive.' It is no answer to say, the policy was on profits. In Kulen, Kemp v. Vigne, 1 D. SC E. 304, the assurance was on the cargo, but as the ship did arrive, the court held the underwriter would, allowing it a-wager policy, have.been exonerated.. ■ ■■ - - . *■ ■ ■■
. Iloffffian. in .reply.
In ;Eentp v. Vigne, the insurance* was expressly,on. the arrival- ofthe’ship; not bf the goods.' On- the .point of abandonment, -it is sufficient to observe-, • that when a. démand was made for a; total loss; the insurer' had it in his power .to make- it equivalent to abandoning1,'! by paying his subscription. ¡-, It is a misftafcedo Say,’'tbe: profits have. been, diminished by- trading on 'themi'--' -The:
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actual proceeds-of-the cargo sold, that which was given for it, has been realized, and credited to the underwriter. Upon this principle even, there is a total loss. Therefore, whether the malting a profit, or the arrival of the goods is to be the criterion, there must, be-a recovery, for neither one, nor the other has happened.
Per Curiam, delivered by
It is -hot made a question, whether profits are an insurable interest. Whatever objections lie to, the practice, we 'hávc heretofore considered them as such', and the counsel of both parties have reasoned on that supposition. In 'France nothing but ship and cargó are regarded as proper subjects of insurance. In England and ill this country, it is not' unusual to' insure profits, eo nominé, arid •yet no decisions are to be found on the construction or effect of such policies. We are at liberty then to' adopt Such rules, not inconsistent with the written contract, as shall render them as little as possible of the gambling hind.' Under no pretext indeed can they be called wagering policies, which exclude all idea of interest in the assured. It would be hard therefore on the underwriter, to rank them in this class, and thus deprive him of the benefit of salvage. A premium on profits is not greater than on goods, and yet it. certainly ought to. be muds higher, if a total loss may be demanded, without any part of the profits-, however considerable, going to the underwriters. It is more, equitable to consider these-insurances as a species of valued, policies on cargo, which they are- in substance, although not • in form. It is sur--prising, that in a country where merchants- may insure’ their adventures at almost any valúe, this practice should-ever have been introduced. The more the subjects of insurance, on any ene' voyage-are-multiplied, the-more-confusion and embarrassment will, in -cases of disaster, be experienced. - It will-often. perplex the most skillful broker so to adjust a loss,- -as-to-do.justice to -the -different-' classes of underwriters. T am-disposed,, therefore, to re-'-gard these-insurances as another-why.cf valuing the goods, and that ⅛ -total -losses- like -the present, the underwriter has such-an-interest in. - ■ th s ■ prop er ty, as tobe-e».t¡íled to an .-sfer.dc-nmeat'. -Whatwould •■be’v-the 'effect:
p. 250
of abandonments to the respective underwriters of Cargo and profit, I will not undertake to say. Perhaps on tendering an indemnity, the former might be obliged to cede their interest to the others, or to account with them for the profits, but here, being no abandonment of the cargo, this difficulty is not before us. We are only to determine whether as between the owner of cargo, and his insurer of profits, it is reasonable to permit the'former to manage the property, as he pleases, and at a period even so distant, to call on the latter for a.total loss. If an abandonment be necessary, as. I think it is, the one, on which the plaintiff relies, was not in time. So .far. from giving any intimation of such design, he takes back: the premium from several underwriters, and as to them.; cancels the policy. He then proceeds by his agent to sell the cargo, takes bills in payment on which there is a. loss, and- finding, he has not made ,out to his wish, calls ' on the defendant’s for the whole amount of their sub-' scription. This case does not fall within the reason of' those in which it has been settled,: that an abandonment is never too late while the loss continues total. Perhaps-' it would have been better in all cases, to drive the assured to. an early election, whether he will abandon or not,-' and not leave it ih his power, as it now is, to run thé " underwriter to-an immense expense, in attempts to re'co- -- ver the property for his own benefit, and then throw it' upon' him, when he can no longer take any one step that' may be of advantage : but in opposition to the positive1; regulations'or" practice of most maritime countries, and df England among qthers, where abandonments must -be' made 'within ' a reasonable time' after notice of loss, -we; permit' the assured to lay by for years, in case of a cap-"; ture or other technical total loss, provided'the capture or" ether accident continues. In these cases, however, the property is out of the hands of the assured, who is pursuing measures . to recoyer it; but it is.different here, where the loss properly speaking, was never total. The cargo was not, as in case of capture, taken from the owner. On the contrary, he chuses to treat the loss as partial — he directs a sale of it on his own account, and finally abandons, but not until after a lapse of three years, when
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in fact there is nothing- to surrender, but what he has al-i • , , . ’ TT1 . , , ready received, and means to retain. Whatever might nave been the claim of the defendant on the insurers of the cargo, if an abandonment had been made ,to them (on which my opinion is reserved) I think as between him and the owner, he had a right to pay the first cost of the goods, with all the charges and profits according to valuation, and on those terms to insist on an assignment. To enable him to assert this right, there ought to have been a seasonable abandonment, which, notwithstanding the decision just referred to, should always bé made, as soon as possible, where the disaster, as was the case here,' is of. such nature as not to divest the assured of his pro^ perty. This is a case of some novelty, on which precedents throw little, if any light. It is very probable, therefore, that my view of it may be incorrect, but after, mature reflection, I cannot come to any other result, satisfactory to my own mind. If wrong, the precedent will not work much mischief, for it cannot be long before underwriters, in this State at least, discover the folly of insuring, unless at a very advanced premium, either profits or freight. The latter, it has already been determined, or at least so much as is earned, even during the voyage insured, after abandonment of the ship, goes to her underwriters, and if profits on goods, in like cases, should be adjudged to belong to the assurer of that subject, there would be none, or very little salvage in either case, so that while the underwriters on ship and cargo, would be receiving enough, and perhaps more than enough, to reimburse them, those on profits and freight may pay a total loss on the same voyage, and not receive a farthing from.the|subjects insured. Our opinion is that the de-iendants have judgment.