Case ID: ny-super-ct_4/html/0076-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court. Vanderpoel, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Child and others v. The Sun Mutual Insurance Company.
    An abandonment of a cargo insured, in order to be effectual, must be warranted by the state of things actually existing when it is made. And if made on information warranting an abandonment, and was not accepted when made ; it will not be valid, if it afterwards appear that such information was erroneous, and there was in fact no technical total loss.
    So, where a whaling vessel was stranded and lost, and on receiving information of the disaster, the owner of the vessel and cargo gave notice of abandonment to the underwriters ; and, after subsequent advice of the safety of part of the cargo, gave a further notice of abandonment; but prior to the first notice, nearly the whole cargo had been saved, and had arrived at ah intermediate port; and there had been no notice or act on the part of the underwriters accepting the abandonment ; it was held, that it was not a valid abandonment of the cargo, and that the profit arising from a sale of the saved portion of the cargo, and the investment of the proceeds in coffee, at the intermediate port, belonged to the assured, who were entitled to claim for a partial loss.
    July 14;
    July 27, 1848.
    Assumpsit, on a policy of insurance on the cargo of the whaling ship Galen. The ship sailed from Warren, Rhode Island, in December, 1842. On her return home, in February, 1846, she was stranded at Fox Bay, in the Falkland Islands, and was totally lost. At that time she had on board 327 barrels of sperm oil, 1400 barrels of whale oil, and 8 barrels of black fish oil. The cargo was almost all saved, subject to various expenses, and was shipped to Rio Janeiro, where it arrived previous to September 17th, 1846.
    On the 19th of September, 1846, the plaintiffs having received a report of the stranding of the Galen, addressed from Warren, R. I., to the defendants and the other underwriters on the vessel and cargo, a letter stating the report, that there was no probability of her being got off, and thereby abandoning the vessel and cargo to the insurers, claimed for a total loss as insured.
    
      Prior to November 16th, 1846, the plaintiffs received from their agents at Rio Janeiro, Maxwell, Wright &. Co., a letter, stating the arrival there of the captain of the Galen, that he had shipped to Rio some 350 casks of whale and sperm oil, which had arrived to the consignment of a grocer there, and were sold conformably to the U. S. Consul’s instructions, at the fair rate of 1250 reals per gallon. That the captain would have the proceeds paid over to M., W. & Co., but as the oil was subject to very heavy charges, they could not as yet make any correct estimate of its probable amount. That the captain had to consign to the grocer, in order to procure the vessel in which it came. And that M., W. & Co. would have made the necessary documents for the underwriters, and keep the plaintiffs advised of the business.
    On receiving this communication, the plaintiff’s at Warren, wrote another letter to all the insurers of the Galen and cargo, dated November. 16th, 1846, in these words:
    “ Since our letter of the 19th Sept., advising of the abandonment of the ship Galen and her cargo to the insurers, we have received intelligence confirming the rumor of the loss of said ship, upon the strength of which said abandonment was made.
    “ We have now to advise the entire loss of the Galen, at Fox Bay, Falkland Islands, in February last, and the shipment of the portion of the cargo which was saved, to Rio Janeiro, where it had arrived previous to Sept, last, and 300 barrels sperm oil has been re-shipped to N. York, and the balance, whale oil, having been sold at Rio, (at a very fair rate,) the proceeds (amount unknown,) will be remitted in coffee to N. Y., consigned to us.
    “We desire to know what disposition you will have madé of this property, and unless advised to the contrary, we shall immediately, upon its arrival in this country, dispose of it for the benefit of all concerned.
    “ The sperm oil comes forward in the brig Camilla, and the coffee in the brig Louisa Beaton, both which vessels Would probably sail about the first October, from Rio, as we are advised by Messrs. Maxwell,Wright & Co., of that city, and presuming you will prefer risking your interest in the property, we shall not effect insurance upon it, unless requested so to do.
    “ N. B.—The protest has not yet come to hand.”
    All the oil, except the sperm, was sold at Rio, and the proceeds paid by the master, to Maxwell, Wright & Co., who invested the same in 12521- hags of coffee, and shipped the coffee to New York and Boston, on the 5th and 20th of October, 1846, consigned to the plaintiffs. They forwarded to the latter, their account current with the captain for the ship’s owners, and an invoice of the coffee. The plaintiffs received the coffee, sold it, and retained the proceeds. There was a profit on the sale of the coffee. The sperm oil saved, being about 300 barrels, was shipped to New York, and also came to the hands of the plaintiffs.
    On the 2d of January, 1847, the plaintiffs delivered to the defendants, the preliminary proofs of interest and loss. On the 20th of July, 1847, at New York, they addressed a letter to the - defendants, as follows :
    
      “ To avoid misunderstanding on the subject of the prelimi- ■ nary proofs in the case of the Galen cargo policy, we beg leave to draw your attention to the proofs of interest and of loss' delivered to you, namely, a copy of the register lately delivered, a protest and survey delivered in January last, copies from the captain’s journal of the cargo on board, bills of lading from the Fox Islands, by the Dispatch, July 23, 1846, of 173 casks oil; by the Manney, July 31, 1846, of 265 casks oil, to Rio de Janeiro ; and the bills of lading of coffee, proceeds of said oil, by the Louisa Beaton, October 6, 1846, for 474 bags ; by the Pil-' grim, for 778J bags, October 20, 1846; together with all the bills, accounts, sales and invoices, with the statement of loss, by Welbaskie & Graham, of our claim.
    “ These were all delivered in February last, at your office, and to them we shall refer as preliminary proofs of interest and of loss, as far as they may be material, of which please to take notice. The papers are left with our attorney, D. Lord, where they may be consulted, if need be.”
    The various documents relating to the adventure being laid before despecheurs by the plaintiffs, they made a statement of the plaintiff’s claim, by which it. appeared, on the fifth February, 1847, to be $2,135 87.
    If the insurers were entitled to the benefit of the profit on the sale of the coffee, in which the proceeds of the oil sold at Rio, were invested, it was agreed that this statement of the loss was incorrect. Otherwise, it was admitted, for the purposes of the trial, that the statement was correct, subject, however, to adjustment.
    There was no proof of any express assent of the defendants to the abandonment, nor of any act indicating their acceptance of the same.
    The defendants insisted that the plaintiffs having abandoned the cargo to them, they, from that time, became substituted in the plaintiff’s right to the property, or its proceeds, or reinvestments, according to the proportion covered by their policy.
    The plaintiffs insisted that the letters of 19th September, and 16th November, 1846, respectively, did not show a valid right to abandon, and also, that at each of those dates, the property insured had been relieved from the peril on which the attempt to abandon was predicated, so that the letters of abandonment were not effectual, and therefore the underwriters were not entitled to the substitution by them claimed.
    A verdict was taken subject to the opinion of the court.
    
      D. Lord, for the plaintiffs.
    
      H. Ketchum, for the defendants.
   By the Court. Vanderpoel, J.

This case is somewhat peculiar. The defendants seek to hold the plaintiffs to their abandonment of the cargo, which forms the subject of the action, and insist that the plaintiffs having abandoned the property to them, they, from that time, became substituted to it or its proceeds in the plaintiff’s right, according to the proportions covered by their policy.

The plaintiffs, on the other hand, insist, that the letters of the 19th September, and November 16, 1846, respectively, did not show a valid right to abandon, and also, that at each of those dates, the property insured had been relieved from the peril on which the attempt to abandon was founded, so that the abandonment was not effectual, and, therefore, the underwriters were not entitled to the substitution claimed by them.

The whole case depends upon the legal effect of the attempted abandonment.

When the assured makes an abandonment, and the underwriter accepts it, it is binding on the parties. So far as it respects the rights of the assured, an acceptance of the abandonment is not necessary. If made in due form, and for sufficient cause, it transfers the subject, and perfects the right of the assured to recover for a total loss, although it is not accepted by the insurers. (2 Phillips on Ins. 400.) The underwriter is not construed by his silence merely, to accept the abandonment. He is not bound, says Justice Story, in Peele v. Merchants Insurance Co., to signify his acceptance. If he says nothing and does nothing, the proper conclusion is, that he does not mean to accept. (2 Phill. 401.)

The two letters of abandonment were written in Rhode Island, when the plaintiffs could not have known the real facts, as they were afterwards shown to have existed. It is a well established rule, that the right to abandon, is to be tested by the actual facts at the time of the abandonment, and not upon the state of the information received. (3 Kent’s Comm. 325; Church v. Bedient, 1 Caines’ Cases in Error, 21; Depau v. Ocean Insurance Co., 5 Cow. 63; Dutilh v. Gatliff, 4 Dallas, 446; 2 Wash. C. C. Rep. 54.) The assured may act upon the best information they can get, as to the state of the vessel or the cargo, but as Chancellor Lansing said in Hallett v. Peyton, (1 Caines’ Cases in Error, 40,) “ if the information is either totally unfounded or materially variant from the truth, it would be a strange position to maintain, that its resemblance should be preferred to the truth itself.” There must be an actual total loss, or one in the highest degree probable, to justify an abandonment of the cargo. (Anderson v. Wallis, 2 Maule & Sel. 240; Hunt v. Royal Exchange Assurance Co., 5 ibid, 47; 2 Camp. N. P. 624.)

We are of opinion, that as the defendants did not accept the abandonments made by the plaintiffs; and the facts subsequently discovered, showed there was no ground for it; they did not acquire the plaintiff’s right to the oil, or its proceeds or re-investments. The judgment must be, as for a partial loss; as there was no binding abandonment of the property to the defendants.