Earl v. Shaw — 1 Johns. Cas. 313

Majority

p. 375

Earl against Shaw.

Headnote

The insured are not bound to abandon in case of an accident, but may wait the final event,, and recover accordingly, for a total or a partial loss, as the case may be.

It is sufficient if there be a loss continuing to the time when the abandonment is made.

If a policy be assigned by the insured to a third person, before the vessel sails on her voyage, it is not necessary that the insurer should have notice of the assignment.

Where a vessel stayed in port six months after the date of the policy, it was held not to bé a deviation, it not being fraudulent, or varying the .risk.

The date of a policy is not conclusive evidence of the timé óf its actual subscription.

This was an action on a policy of insurance, on the ship Grand Turk, from New York to any port or ports in the East Indies, and back to New York. The policy was dated the 5th of May, 1795.,

The cause was tried before Mr. Justice Radcliff, at the sittings in New York, on the 14th November, 1799, when the jury found a verdict for the plaintiff, subject to the opinion of the court on a c'ase made, With liberty to either party to turn the same into a special verdict.

The following are the material facts in the case:

The vessel was captured on the 26th December, 1796, on her return to New York, and carried into St. Kitts. The plaintiff was on board at the time of her capture, The policy was assigned and delivered on the 5th of November, 1795, (which was previous to her sailing on her "intended voyage) to Lewis H. Guerlain, who then [*3l4] resided in the city of New York, and has continued to reside there eversi nee, of which assignment the underwriters had no notice.

Both Earl and Lewis H. Guerlain were, at the time of the insurance, naturalized citizens of the United States, the for- ' mer having been a subject of England, and the latter a subject of France. ’

On the 15th of February, 1797, there was published in the gazettes, printed in New York, an account that the Grand

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Turk had been captured by a British ship of war, and carried •into Dominico, where, after an examination, she was discharged ; that she had sailed from Dominico, and had been again captured by a British ship of war, and carried in to St. Kitts.

The captain of the Grand Turk-'arrived -in the city .of New York, in the month of April, 1797, and some time after his arrival, (less than one month) Guerlain sent his clerk to the captain for information "with respect to the vessel, who delivered to the clerk his protest, and at the same timé observed, that the plaintiff being in the West Indies, and-having attended particularly to this business, he could give no information.

On the 11th of February, 1797, sentence of condemnation on the vessel and cargo was pronounced in the words following, viz.

“ That the said ship Grand Turk, her tackle; apparel and. furniture, together with the guns, ammunition and stores, and also six casks of indigo and eight bales, all marked S. M. & Go. laden and seized- on board the said ship, be cond'emned as lawful prize to the captors, as being the property of the enemies of the crown of Great Britain, or otherwise subject and liable' to, confiscation, to be forthwith delivered to the captors, their agent or agents • that the register do with all-speed take, an account of all the'contraband articles contained in the invoice of the saidkhip’s. outward bound cargo from ■ New York, and report the amount thereof to' this [*315] court; that the return *cargo, or such, part of the " goods, wares and merchandizes laden and seized on . board the said ship Grand Turk, and which are marked with the initials of the said claimant, viz. I. E. be afterwards sold by the agent or agents for the captors, and that in the proportion which thé: contraband articles, composing part Of the said outward cargo, bear in value to the other articles or other lawful goods composing such outward cargo, by the invoice of the whole thereof, the nett proceeds arising from the sale of the said return cargo, or that part thereof which is marked with the initials I. E. be divided in the same proportion between the’ captors and claimant; and that such proportion which is so adjudged to the captors, to be also condemned as

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lawful prize to the said captors, as the enemies of his Britannic Majesty, or otherwise subject and liable to confiscation. And that such proportion which is directed to be restored to the claimant, be, and the same is hereby acquitted. And his worship the judge was further pleased to pronounce, adjudge and decree, that all the goods, wares and merchandizes, laden and seized on board the said ship Grand Turk, marked with the initials V. S. and consisting of 45 bales of cotton, 42 bags of coffee, ! box of nutmegs, and 72 bales of cotton, be acquitted and restored to the said claimant, for the benefit of the owners thereof, as being the property of neutrals; that the wages of the master, physician, officers and seamen, be a charge upon the said ship and her freight, and that the question of costs be reserved for further consideration.”

On. the 12th of May, (being the day' appointed for that purpose,) an appeal from the sentence of the said court, was duly filed by Earl, for the benefit of all concerned, and a bond with security given for the prosecution of such appeal.

The policy of insurance on the Grand Turk, was in the usual form,- with a memorandum at the bottom, in the Words following:

*“ Note. The ship is warranted American pro- [*316] perty, and the oath of the parties, together with the register at the collector’s office, or the duplicate oh board the said ship, are to be admitted as sufficient proof, and not to be bound by any foreign adjudication.”

This evidence, as prescribed, was produced at the trial.

The abandonment was made on the 6t’n of October, 1797, which was immediately after Guerlain had received the papers proving the condemnation.

From the period of the capture of the ship until the. time of abandonment, and both before and after condemnation, the assured did every act and thing he judged necessary for her recovery, and the benefit of all concerned.

When the abandonment was made, the vessel still continued in the hands of the captors, and the sentence of condemnation has not been reversed, and the property still remains in the hands of the captors.

p. 378

No information was given to, or inquiry made by the underwriters of the nature of the cargo on board; at the time the ship sailed from New York.

A motion for a new trial was made by the defendants, and argued by Burr and Harison, for the plaintiff, and B. Livingston and Hamilton, for the defendant.'

delivered the opinion of the court. In this case three questions have been made

1. Whether the delay of the voyage before the vessel sailed ' can affect the policy.

. 2. Whether the assignment of the policy by the plaintiff to Guerlain, previous to the sailing of the vessel, altered the risk, so as to vitiate the policy., .

3. Whether the abandonment was made in due season, the notice of loss having been received in April, 1797, and the abandonment made in October following.

1. It does not appear that the vessel was detained after the policy was dated, from fraud or.any sinister design, nor that

the risk was thereby enhanced. ' The vessel was [*317] ^insured for an India voyage, and several 'months may have been necessary, after the date or opening of the policy, to complete the insurance. Whether it was-so or not, was a question of fact to he raised at the trial, and decided by the jury. It is the practice to insure before, as well as after the commencement of the voyage, and while the circumstances and risk 'remain the same, it cannot be material whether the voyage is immediately pursued.^[4] In the present case, the policy attached as soon as it was effected,-and it does not appear that there has been any unusual or unnecessary delay, nor that any occurred to alter the risk before the vessel sailed.

2. The objection as to the assignment of the policy appears

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to be equally immaterial. Such assignments are common, and it is not easy to perceive how they can affect the insurer, unless in the case of neutral property assigned to a subject or citizen of one of the belligerent parties. That is not pretended to be the case here.^[2]

3. It is contended, that the insured is bound to make his election in a reasonable time, after notice of the loss ; and if he does not elect to abandon within such time, he cannot afterwards. The right to abandon is for the benefit of the insured, and he has an election to exercise his right or not. If he pursues the enterprize and does not abandon, he may recover for a total or partial loss, according to the final event. By the terms of the policy, he may labor and sue in and about the property insured, without prejudice to the policy. He may, therefore, take the chance of the ultimate success of the voyage. If the loss should continue total, he may abandon, or if it be converted into a partial loss, he must recover accordingly. This is favorable to the interests of trade, and is consistent with the contract, and the rights of the parties.^[3]

(b) (b) Wakefield v. Martin, 3 Mass. R. 558 ; Carter v. United Ins. Co. 1 Johns. Ch. R. 463; see also, 1 Atk. 546; Dhegetoft v. London Ass. Co. Moseley’s R. 83; Gourdon v. Ins. Co. of N. A. 3 Yeates, 327 ; S. C. 1 Binney, 430; Rousset v. The Same, 1 Binney, 429; Delany v. Stodart, 1 T. R. 22. See 1 Philips on Insurance. 2d edit. 34 et seq.

(c) (c) In Stienbach v. The Columbian Ins. Co. 2 Caines’ R. 129, the supreme, court re-affirm the principle that ‘f an abandonment may be made at anytime after the accident, provided at the date of the abandonment the loss still continue total.” This judgment is affirmed in the court of errors of the state of New York, nom. Smith v. Stienbach, 2 Caines’ Cas. in Error, 158. The same point has been decided in Pennsylvania. Bohlen v. Delaware Ins. Co. 4 Binney, 430; Brown v. Phenix Ins. Co. 4 Binney, 445, 461, 462. But unless the loss continues to be total at the time of abandonment, the insurer will only be liable for partial loss. Id. The question, however, is of no praer tical importance, because, an entire loss of the property is assumed to have occurred, and it is idle to abandon in such a case. Abandonment is only necessary where the loss is constructively total, and the object of it is to rem der a loss total, which would otherwise, be only partial. The case of Mellish v. Andrews, 15 East, 13, is an authority the other way upon this question, though leading to the same general result. There the assured of goods having received intelligence on the. 8th of January, 1811,. that the ship’s papers were taken away on the 7th of December, preceding, by the Swedish govern *380 ment, within whose port she was, did not give notice of abandonment' to the defendant underwriter, till the 17th of January ; but though such notice was too late, supposing an abandonment to be necessary, yet as the goods were finally seized and unladen by .order of that government, on the 30th of April following, it was held, that the ineffectual notice of abandonment before given, did not preclude the assured from recovering as for a total loss without any abandonment. See also, Toro v. Smith, 3 Caines’ R. 245; Galbraith v. Gracie, 1 Wash. C. C. R.219; Livermore v. Newburyport M. Ins. Co. 1 Mass. R. 264 , and 2 Phill. on Ins. 382, 387, 388.

p. 380

While the insured acts with good faith in endeavoring to recover the property, no injury can arise to the insurer. If he is guilty of. fraud, or culpable neglect, his conduct ought • not to affect the insurer, and the loss in consequence-[*318] *wou!d be his own. There is no fixed time at which the abandonment is to be made. In the present case, it was • made immediately after receiving the papers, proving the condemnation.. This was. the earliest period at which it could, with propriety, be done. Neither the account in the gazette, nor the master’s protest, considering the declaration with which it was qualified, was sufficient proof of the loss; and while the master was prosecuting his claim for a reco-' very, the insured was justified in waiting the event, and no possible injury could thereby arise to the insurer. . -

As the special clause relative to the warranty, provides for the mode of proof, and that the parties are not to be bound by ..a foreign condemnation, the sentence of the admiralty court can have no effect, as the requisite proofs of the neutrality of the property were produced at the trial.

The court are, therefore, of opinion, that the plaintiff is entitled to recover.

Judgment for the plaintiff.^[4]

(a) (a) The case of Earl v. Lefferts, depending on the same facts, was decided in the same manner.

Footnotes

(a) (a) But if the delay.be unnecessary and voluntarily, it will amount to a deviation. Marshall, 405. ‘ Park, 313. Doug. 291, 292. 4 Esp. N. P. Cases, 26. [To- thpse authorities’ add, Chitty v. Selwyn, 2 Atk. 359; Vallance v. Dewar, 1 Campb. 505 Ongier v. Jennings, id. note, Mount v. Larkins, 8 Bing. 108 Freeman v. Taylor, id. 139; Palmer v. Marshall, id. 317; sed vide Palmer v. Fenning, 9 id. 460; Kingston v. Gerard, 4 Dallas R. 274; Coffin v. Newburyport Ins. Co. 9 Mass. Rep. 436 .]