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BRADLIE V. MARYLAND INSURANCE COMPANY, 37 U. S. 378 (1838)
U.S. Supreme Court
Bradlie v. Maryland Insurance Company, 37 U.S. 12 Pet. 378 378 (1838)
Bradlie v. Maryland Insurance Company
37 U.S. (12 Pet.) 378
Insurance. By the well settled principles of law, in the United States, the state of the facts, and not the state of the information at the time of the abandonment, constitutes the criterion by which is to be ascertained whether a total loss has occurred or not for which an abandonment can be made. If the abandonment when made is good, the rights of the parties are definitively fixed, and do not become changed by any subsequent events. If, on the other hand, the abandonment when made is not good, subsequent circumstances will not affect it so as retroactively to impart to it a validity which it had not at its origin.
In cases where the abandonment was founded upon a supposed technical total loss by a damage or injury exceeding one-half of the value of the vessel, although the fact of such damage or injury must exist at the time, yet it is necessarily open to proof to be derived from subsequent events. Thus, if the repairs, when subsequently made, clearly exceed the half value, it is plain that this affords one of the best proofs of the actual damage or injury. On the other hand, if the subsequent repairs are far below the half value, this, so far as it goes, affords an inference the other way. In many cases of stranding, the state of the vessel may be such, from the immanency of the peril and the apparent cost of expenditures requisite to deliver her from it, as to justify an abandonment, although by some fortunate occurrence she may be delivered from her peril without an actual expenditure of one-half of her value after she is in safety. Where, in the circumstances in which the vessel then may have been, in the highest degree of probability the expenditures to repair her would exceed half her value, and if her distress and peril be such as would induce a considerate owner, uninsured and upon the spot, to withhold every attempt to get the vessel off because of such apparently great expenditures, the abandonment would doubtless be good.
In respect to the mode of ascertaining the value of the ship, and, of course, whether she is injured to the amount of half her value, it has on the fullest consideration been held by this Court that the true basis of the valuation is the value of the ship at the time of the disaster, and 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 repairs, it is to be treated as a technical total loss.
The valuation in the policy or the value at the home port or in the general market of other ports constitutes no ingredient in ascertaining whether the injury by the disaster is more than one-half of the value of the vessel or not. For the like reason, the ordinary deduction in case of a partial loss of "one-third new for old" from the repairs is equally inapplicable to cases of a technical total loss by an injury exceeding one-half of the value of the vessel.
The mere retardation of the voyage by any of the perils insured against not amounting to or producing a total incapacity of the ship eventually to perform the voyage cannot, upon principles well established, be admitted to constitute a technical total loss which will authorize all abandonment. A retardation for the purpose of repairing damage from the perils insured against, that damage not exceeding one moiety of the value of the ship, falls directly within this doctrine. Under
such circumstances, if the ship can be repaired and is repaired and is thus capable of performing the voyage, there is no ground of abandonment founded upon the consideration that the voyage may not be worth pursuing, for the interest of the ship owner or that the cargo has been injured so that it is not worth transporting further on tile voyage, for the loss of the cargo for the voyage has nothing to do with the insurance upon the ship for the voyage.
An insurance on time differs as to this point in no essential manner from one upon a particular voyage, except in this, that in the latter case the insurance is upon a specific voyage described in the policy, whereas a policy on time insures no specific voyage, but it covers any voyage or voyages whatsoever undertaken within and not exceeding in point of duration the limited period for which the insurance is made. But it does not contain an undertaking that any particular voyage shall be performed within a particular period. It warrants nothing as to any prolongation or retardation of the voyage, but only that the ship shall be capable of performing the voyage undertaken notwithstanding any loss or injury which may accrue to her during the time for which she is insured, and of repairing it if interrupted.
There is no principle of law which makes the underwriters liable in the case of a merely partial loss of the ship if money is taken up in bottomry for the necessary repairs and expenditures and which makes it the duty of the underwriters to deliver the ship from the bottomry bond to the extent of their liability for the expenditures, and that if they do not, and if the vessel is sold under the bottomry bond, they are liable not only for the partial loss, but for all other losses to the owner for their neglect.
The underwriters engage to pay the amount of the expenditures and losses directly flowing from the perils insured against, but not any remote or contingent losses to the owner from their neglect to pay the same.
The underwriters are not bound to supply funds in a foreign port for the repairs of any damage to the ship occasioned by a peril insured against. They undertake only to pay the amount after due notice and proof of the loss and within a prescribed time.
If, to meet the expenditures for repairs, the master is compelled to take up money on bottomry, and thereby an additional premium becomes payable, that constitutes a part of the loss for which the underwriters are liable. But in cases of partial loss, the money is not taken up on account of the underwriters, but of the owner, and they become liable for the loss whether the bottomry bond ever becomes due and payable or not.
In the case of a partial loss, where money is taken up on bottomry bond to defray the expenditures of repairs, the underwriters have nothing to do with the bottomry bond, but are simply bound to pay the partial loss, including their share of the extra expenses of obtaining the money in that mode, as a part of the loss.
The case as stated in the opinion of the Court was as follows:
The original action was upon a policy of insurance dated 22 November, 1832, whereby the defendants, the Maryland Insurance Company, caused the plaintiffs, by their agents, William
Howell & Son, to be insured, lost or not lost, ten thousand dollars, at a premium of four percent, on the brig Gracchus, Snow, master (valued at that sum), at and from Baltimore, for six calendar months, commencing that day at noon, and if she be on a passage at the expiration of the time, the risk to continue at the same rate of premium until her arrival at the port of destination. The declaration alleged a total loss by the casting ashore and stranding of the brig on 23 March, 1833, in the River Mississippi. Upon the trial of the cause, it appeared in evidence that the brig sailed from Baltimore on a voyage to New Orleans, and safely arrived there and took on board part of cargo (pork and sugar) at that port, on a voyage for Baltimore, and about the middle of 23 March, 1833, sailed from New Orleans, intending to proceed to Sheppard's Plantation, on the River Mississippi, about thirty-three miles below New Orleans, to take in the residue of her cargo for the same voyage. At the English Turn, about twenty-two miles from New Orleans, the brig attempted to come to anchor, and in so doing lost the small bower anchor, and then dropped the best bower anchor, which brought her up. The next morning, while the brig was proceeding on her voyage, she struck on a log, broke the rudder pintles, when she fell off and went on shore. A signal was then made for a steamboat in sight, which came to the assistance of the brig, and in attempting to haul her off, the hauser parted. It was then found that the brig was making water very fast; help was obtained from a neighboring plantation. They commenced pumping and discharging the cargo on board of the steamboat, and after discharging all the pork and a part of the sugar, they succeeded in freeing the ship on the afternoon of the same day. She was then got off, and proceeded to New Orleans, where she arrived the same night, she continuing to leak, and both pumps being kept going all the time. The next day the master understood that the steamboat claimed a salvage of fifty percent, and intended to libel for it. On the 27th of the same month, the brig was taken across the river for repairs. On the same day, the brig was libeled for the salvage in the District Court of Louisiana.
On 25 March, Snow, the master, wrote a letter to one of the owners containing an account of the loss and state of the brig, and also of the claim by the salvors of fifty percent, which the underwriters on the cargo and himself had objected to, adding that
they should hold the steamboat liable for any damage that might be incurred on account of the detention.
The following is a copy of the letter.
"New Orleans, 25 March 1833"
"ISAAC BRADLIE, Esq., Seaford, Delaware."
"Dear Sir: I left here on the 23d inst., to go thirty-six miles below, to complete loading the brig with sugars for Baltimore; on the evening of the same day in coming to in the English Turn, in a heavy blow from the S.E., parted the small bower cable, and lost the anchor. I then let go the best bower, which brought her up, where we lay during the night; in the morning of the 24th, got under way and proceeded down the river; at 7 A.M., struck on a log, broke the rudder pintles, the brig fell off and went on shore. I then made a signal for a steamboat which was in sight; she came to our assistance and attempted to pull us off, but the hauser parted; we then found that the brig was making water very fast, and that she would soon fill; got thirty odd negroes from a plantation, and commenced pumping, and discharging the cargo on board of the steamboat; after discharging all of the pork and the greater part of the sugar, we succeeded in freeing of her, at 5 P.M.; we then got her off and proceeded up to town, where we arrived at 11 P.M. The owners of the steamboat claim a salvage of fifty percent on vessel and cargo, which the underwriters of the cargo, with myself, have objected to. We have not been able to discharge the balance of the cargo today; what the consequence will be I cannot say. We hold the owners of the steamboat liable for any damage that may occur on account of the detention; the brig continues to leak so as to keep both pumps going almost constantly. About one-half of the sugar is damaged. I have noted a protest and had a survey, and shall proceed to have everything done in the most careful manner, as the survey may direct, for the interest of all concerned; as soon as I am able to inform you of what will be done, I will do so by the first opportunity."
On 22 April, Messrs. Howell & Son addressed a letter to the company, submitting the letter of 25 March to the company, and say therein,
"In consequence of the damage, together with the detention that must grow out of a law suit (in which it appears that the vessel is involved), the voyage being broken up, we
do hereby abandon to you the brig Gracchus, as insured in your office per policy No. 13,703, and claim for a total loss."
On the same day, the company returned an answer, saying,
"We cannot accept the abandonment tendered in your letter of this date, but expect you to do what is necessary in the case for the safety and relief of the vessel."
On the 9th of the ensuing May, the district court decreed one quarter of the value of the vessel and cargo (estimated at seven thousand dollars) as salvage, the brig being valued at twenty-five hundred dollars. On the 14th of the same month, the master got possession again of the brig, the salvage having been paid. On 3 June, 1833, the brig was repaired and ready for a freight, and early in July she sailed for Baltimore with a partial cargo on board on freight, and duly arrived there in the latter part of the same month. The repairs at New Orleans amounted to the sum of one thousand six hundred and ninety dollars and fifteen cents; in the share of the brig, at the general average or salvage, to the sum of one thousand two hundred and forty-five dollars and seven cents; in the whole amounting to two thousand nine hundred and thirty-five dollars and twenty-two cents. To meet this sum, and some other expenses, the master obtained an advance from Messrs. Harrison, Brown & Co., of New Orleans, of three thousand seven hundred and fifteen dollars and forty-one cents, and gave them as security therefor, a bottomry bond on the Gracchus for the principal sum and five percent maritime premium, payable on the safe arrival of the brig at Baltimore.
On this bottomry bond the brig was libeled in Baltimore, and no claim being interposed by any person, she was, by a decree of the District Court of Maryland, on 5 September, 1833, ordered to be sold to satisfy the bottomry bond, and she was accordingly sold by the marshal about the 20th of the same month to John B. Howell for four thousand seven hundred and fifty dollars, who, on the 24th of the same month, paid to the attorney of the libellant the full amount due under the decree of the court. On the same day, the president of the company addressed a letter to Messrs. Howell & Son in which they say
"We have examined the statements of general and particular average, and the accounts relating thereto which you handed us some days ago respecting the expenses incurred on the brig Gracchus at New Orleans. Although some of the charges are of a description for which the company is not liable
by the terms of their policy, yet wishing to act liberally in the case, we have agreed to admit every item in the accounts, and the different amounts will be as follows."
Here follows a statement deducting from the repairs one-third new for old, and admitting the sum of two thousand four hundred and nine dollars and eleven cents to be due to the plaintiffs, and enclosing the premium note and a check for the amount. The letter then adds,
"If you find any other charge, &c., has been paid at New Orleans, in order to raise the funds on bottomry, we will pay our full proportion of the same upon being made acquainted with the amount."
On the same day, Messrs. Howell & Son returned an answer, refusing to receive the premium note and check, adding, "We should do them (the owners) great injustice to make such a settlement. Our opinion is that, in law and equity, they have a claim for a total loss."
These are the principal facts material to be mentioned, though much other evidence was introduced into the cause upon collateral points, by the parties.
The counsel for the defendants, after the evidence on each side was closed, moved the court to instruct the jury as follows:
"Defendants' 1st Prayer. -- The defendants, by their counsel, pray the court to instruct the jury that the notice of abandonment of 22 April, 1833, and the accompanying letter from captain Snow of 25 March, as given in evidence by the plaintiffs, do not show or disclose facts which in law justifies the offer to abandon then made, and therefore that in the absence of all evidence that said abandonment was accepted by the defendants, the plaintiffs are entitled to recover only for a partial loss."
"2. That if the said notice of abandonment was sufficient, still the jury ought to find a verdict for a partial loss only, unless they shall believe from the evidence that the Gracchus suffered damage from the accident that befell her on 24 March, 1833, to more than one-half the sum at which she was valued in the policy, and that in estimating said damage, the jury ought to take the cost of her repairs only, deducting one-third therefrom, as in the case of adjusting a partial loss."
"3. That if the said abandonment was sufficient, as is assumed in the preceding prayer, still the jury ought to find a verdict for a partial loss only unless they shall believe upon the evidence that the damage so sustained by said brig exceeded in amount one-half the sum at which she was valued in the policy, and that in estimating the
cost of her repairs for the purpose of ascertaining the amount of such damage, the jury is bound to deduct one-third therefrom, as in the case of a partial loss."
"4. That if said abandonment was sufficient, still the jury ought to find a partial loss only unless it shall believe that the damage as aforesaid was more than one-half the value of the said brig at the time the accident happened, according to the proof of such value as given in evidence, and that in estimating the amount of such damage, the jury is to take the amounts of the general and particular averages as adjusted at New Orleans, deducting one-third from the actual cost of repairs."
But the court refused to give the instructions prayed for, and gave to the jury the following instruction:
"If the jury finds from the evidence that the Gracchus was so damaged by the disaster mentioned in the letter of captain Snow of March 25, 1833, that she could not be got off and repaired without an expenditure of money to an amount exceeding half her value at the port of New Orleans after such repairs were made, then the plaintiffs are entitled to recover for a total loss under the abandonment made on 22 April, 1833, and in ascertaining the amount of such expenditure, the jury must include the sum for which the brig was liable to the salvors, according to the decree of the District Court of Louisiana stated in the evidence; but if the jury find that the vessel could have been got off and repaired without an expenditure of money to the amount of more than half her value, then, upon the evidence offered, the plaintiffs are not entitled to recover for a total loss on the ground that the voyage was retarded or lost, nor on account of the arrest and detention of the vessel by the admiralty process issued at the instance of the salvors."
The defendants excepted to the refusal of the court to give the instructions prayed and also to the opinion actually given by the court in its instructions to the jury. The plaintiffs also excepted to the same opinion given by the court.
The plaintiffs also prayed
"the court to direct the jury, that in this cause, the insured, by their letter of 22 April, authorized and required the proper expenditures to be made upon the vessel, for which said underwriters are liable under their policy, that no funds being supplied by them in New Orleans to meet this loss, and the salvage and repairs having been paid for by money raised upon respondentia upon the vessel, if the jury shall find that said vessel, under the lien of this bond, came to Baltimore, and the defendants
were then apprised of the existence of such respondentia, and were also informed of the existence of the proceedings thereupon against said vessel, and they neglected to pay so much thereof as they ought to have paid to relieve said vessel, and omitted to place her in the hands of the owners, discharged of so much of such bottomry as the underwriters were liable for, and in consequence thereof said vessel was libeled and condemned and sold, and thereby wholly lost to the plaintiffs, then the plaintiffs are entitled to recover for the whole value of the vessel."
The court refused to give this instruction and the plaintiffs excepted to the refusal, and the court signed a bill of exceptions upon both exceptions. The jury found a verdict for the plaintiffs for three thousand four hundred and eighty-nine dollars and twenty-two cents, upon which judgment passed for the plaintiffs. And the present writ of error is brought by the plaintiffs for the purpose of reviewing the instructions above stated so far as they excepted thereto.
Although the prayers for the instructions by the defendants are not before the Court for the purpose of direct consideration, as the defendants have brought no writ of error, yet it is impossible completely to understand the nature and extent and proper construction of the opinion given by the court without adverting to the propositions contained in them, for to them and to them only was the opinion of the court given as a response.
The second instruction asked by the defendants in substance insisted that to entitle the plaintiffs to recover for a total loss, the damage to the Gracchus from the accident should be more than one-half the sum at which she was valued in the policy, and that in estimating the damage, the costs of the repairs only were to be taken, deducting one-third new for old. In effect, therefore, it excluded all consideration of the salvage in the ascertainment of the loss.
The third instruction was in substance similar to the second, except that it did not insist upon the exclusion of the salvage. In effect, therefore, it insisted upon the valuation in the policy as the standard by which to ascertain whether the damage was half the value of the Gracchus or not.
The fourth instruction insisted that to entitle the plaintiffs to recover for a total loss, the damage must exceed one-half the value of the Gracchus at the time of the accident, and that in estimating the damage, the general and particular averages, as adjusted at New Orleans, were to be taken, deducting one-third new for old. In effect,
therefore, it insisted that nothing but these adjustments were to be taken into consideration in ascertaining the totality of the loss at the time of the abandonment (admitting the abandonment to be sufficient), however imminent might be the dangers or great the losses then actually impending over the Gracchus. And all three of these prayers further insisted that the deduction of one-third new for old should be made from the amount of the repairs, as in the case of a partial loss, in ascertaining whether there was a right to abandon for a total loss upon the ground that the damage exceeded a moiety of the value of the vessel.
The jury found a verdict for the plaintiffs for a partial loss, assessing the damages at three thousand four hundred and eighty-nine dollars and twenty-two cents, upon which the court gave a judgment. On this judgment the plaintiffs entered a credit for four hundred and eighty-five dollars and twenty-two cents, the amount of the premium note and interest. The plaintiffs prosecuted this writ of error.
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