Case Name: William Gordon versus The Massachusetts Fire and Marine Insurance Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1824-03
Citations: 2 Pick. 249
Docket Number: 
Parties: William Gordon versus The Massachusetts Fire and Marine Insurance Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 19
Pages: 266–285

Head Matter:
William Gordon versus The Massachusetts Fire and Marine Insurance Company.
A vessel was valued at 2000 dollars, and was insured for that sum, on the 1st of June, for whom it might concern. She was then owned by the plaintiff, who, on the 1st of July, made an absolute bill of sale of her, taking a written memorandum from the assignee, wherein he promised to appropriate the proceeds of the vessel to himself as security for indorsing for the plaintiff, and to pay over the balance, If any, to a creditor of the plaintiff. On the 19th of July further security was given to the assignee, and the memorandum was then exchanged for an instrument, under seal, made for the same purposes, wherein the assignee covenanted that the proceeds of all the property assigned to him, including the vessel, should be applied as before mentioned. Afterwards a loss happened. It was held, that notwithstanding the transfer, there was, at the time of the loss, a subsisting interest in the plaintiff, which was protected by the policy 3 since the debts, on account of which the transfer was made, would still exist, except so far as they should be discharged by the proceeds of the property assigned.
The vessel insured as above mentioned put into the harbor of St. Domingo, having received damage from the perils insured against. A survey was called and the surveyors reported that she could not be repaired there, by reason of the want »f materials and the extraordinary expense of making repairs at that place, without incurring an expense exceeding her value, and they therefore condemned her to be sold for the interest of whom it might concern. The hull, sails and other material were accordingly sold, in separate lots, for the gross sum of 1086 dollars. The purchaser afterwards refitted her for sea. It was held, that the survey was not conclusive evidence of the necessity of the sale 3 that if the sale were necessary, it would constitute a total loss without an abandonment, and in such case the plaintiff could recover for a total loss ; but that in case of a constructive total loss, he could recover only as for a partial loss, inasmuch as by the transfer he had put it out of his power to make an abandonment.
Assumpsit on a policy of insurance, dated the 1st of June 1822, on the brig Enterprise, at and from Portland to and at all ports and places to which she might proceed, for one year from the 20th of May 1822. The vessel was valued at 2000 dollars, and was insured for that sum to Peters, Pond & Co. or whom it might concern.
The declaration alleged a total loss by the violence of the winds and waves and perils of the seas, whereby the vessel was stranded and cast on shore on the island of St. Domingo on the 20th of August 1822. It also averred, .that the plaintiff was the owner of the vessel at the date of the policy, and that he continued to be interested therein till the loss.
It appeared in evidence at the trial, that on the 16th of August 1822, the Enterprise sailed from St. Thomas, bound to New York, with a cargo on freight. On the 19th she put into the harbor of St. Domingo, having lost her foremast in a gale of wind. While in the road-stead at anchor, a gale arose and she was driven upon the rocks, on which she continued beating the greater part of the next day, whereby the fluke of her anchor was broken and the vessel damaged. After she was got oft’ the rocks, she was carried up to town. A survey was called and the surveyors, having examined her, directed her to be unloaded and hove down ; and upon a further examination they reported, that from the damage she had sustained by the gale, and by being driven on the rocks, she could not be repaired there, by reason of the want of materials and the extraordinary expense of making repairs at that place, without incurring an expense which would exceed the value of the vessel ; and therefore they condemned her to be publicly sold for the interest of whom it might concern. The vessel was afterwards accordingly sold by auction, the hull, sails and other materials in separate lots, all of which produced the gross sum of 1086 dollars.
It was testified by Richard Keating, one of the surveyors, Paul E. Merrill, the master, and Nathaniel Gordon, master of an American vessel then in that port, that it was difficult, if not impossible, to procure materials or suitable workmen there to repair the brig, and that a halser or tackle to heave the vessel down, which was necessary, could not be procured there, and that in their opinion she could not be repaired there in such a manner as to render her seaworthy.
The defendants proved that Matthew Varina purchased the vessel at auction and put a mast in her, which he happened to have by him, and made some other repairs upon her, and despatched her, with a cargo of mahogany, for Boston, where she afterwards arrived. It also appeared that she leaked badly when she came into Boston harbor. Varina testified that the whole expense of the repairs made by him in St. Domingo amounted to about 100 dollars. It was testilled by the carpenters who repaired her in Boston for Varina, that the whole expense of the repairs which they made was about 500 dollars, and that in their opinion the injury done to the vessel by the gale of wind and the rocks might have been repaired for about 200 dollars ; but they did not discover that any of the naval timbers were broken. They testified further, that an entirely new keel would not have been necessary if the old one had not been wormeaten. Other carpenters were of opinion that such repairs would have cost in Boston about 300 dollars, including the repairing of the naval timbers, but exclusive of the repairs made at St. Domingo and the cost of a cable. Joseph Balch testified that the small bower cable for such a vessel would cost about 110 dollars, and the largest cable about 176 dollars ; and that the cost of repairs in the West Indies was often from three to four times as much as in Boston, and he thought never less than twice as much. Keating and Merrill testified, that they were of opinion the vessel was not so repaired in St. Domingo as to render her safe or fit to bring a cargo to Boston.
The plaintiff attempted to impeach the credibility of Varina, and much evidence was given on both sides to that point.
It appeared that the vessel had made two voyages since she was repaired, and that at the time of the trial she was on a voyage to the West Indies.
No abandonment was made or offered to the defendants, by the plaintiff or any one else.
It was also in evidence, that on the 1st of July 1822, the plaintiff made and delivered to Joseph and Ezekiel Hoole a bill of sale, in common form, of the brig, for the consideration of 3000 dollars, which instrument was deposited in the custom-house in Portland, and no conveyance of the vessel was afterwards made to the plaintiff.
To show that he retained an insurable interest notwithstanding the bill of sale, he gave in evidence the deposition of William Woodbury, who stated, that at the time when the bill of sale was delivered, a written memorandum was given by the Hooles for the bill of sale and for a bill of sale of the cargo of the Enterprise, the proceeds whereof, when sold, they therein promised to appropriate to themselves as security foi indorsing notes, drafts and accounts for the plaintiff, where they were liable to pay for him, and to pay over the balance, should there be any, to Morgan S. Gordon ; that on the 19th of July the Hooles, having learned that the cargo of the Enterprise had been previously assigned to Peters, Pond & Co., required the plaintiff to give them other security ; to which he consented, and thereupon gave up to them the memorandum, and at the same time took from them an instrument of that date, wherein, after reciting and describing the property which they had received for the purpose before mentioned, and among other things, “ a bill of sale of the brig Enterprise and appurtenances,” they covenanted that all the proceeds of the property should be applied to the payment of all notes and drafts made by the plaintiff directly and originally to them, and of their account against him, and to the discharge of such liabilities as they had to that time assumed for him. The witness further testified, that this second instrument was given for the same purposes as the first, the change being made only to conform to the change of security, and that the Hooles, having failed in consequence of the plaintiff’s insolvency, put into the witness’s hands the policy of insurance, with other security, he being their indorser at the time and having agreed to assist them further ; and that subsequently, in March 1823, he having made a settlement with them and they having entered into arrangements with their creditors, they took back all the property which they had before assigned to him. It did not appear, unless it might be inferred from this deposition, that the Hooles had ever paid any debts of the plaintiff for which they were his sureties.
The judge instructed the jury, that there was sufficient proof of property in the plaintiff to give him an insurable interest, intending however to reserve the question of law for the whole Court.
He also instructed them, that as the vessel had come to damage unquestionably by perils insured against, if the proceedings of the captain were bond fide in relation to the survey, and the surveyors conducted themselves honestly in examining the vessel and in reporting their opinion that she ought to be condemned and sold, the sale was justifiable and constituted a total loss, for which the plaintiff might recover without an abandonment, as under such sale the purchaser acquired a right to the property in the vessel; that if they believed, from the evidence, that the repairs necessary to put her in a safe condition for her voyage home with a cargo would, on account of the difficulty of obtaining materials or on account of their high price, amount in expense to more than one half of the value of the vessel when repaired, that fact alone would constitute a total loss with an abandonment, but not without, but that the proceeding of the surveyors, if bona fide, and the sale pursuant to it, took away the necessity of an abandonment. This question also was intended to be reserved.
The jury having found a verdict for the plaintiff, the defendants moved for a new trial on the ground of a misdirection of the judge.
Hubbard and Bliss supported the motion. The plaintiff had no insurable interest in the vessel at the time of the loss. If he had any, it was fraudulent as against creditors and underwriters. As soon as the bill of sale was made to the Hooles, which was absolute on the face of it, they might have procured insurance, and after their assignment to Woodbury, he might have done the same. If then after these transfers the plaintiff may maintain this action, the defendants may be obliged to pay the loss two or three times over. There are cases in which several persons may recover for the loss of the same property, but it is only where they disclose to the underwriter the nature of the qualified interest which they have respectively in the property insured, and not where they state themselves to be absolute owners. This case comes within that of Carroll v. Boston Mar. Ins. Co., 8 Mass. R. 515. The receipt or memorandum given by the Hooles does not purport that any interest remained in the plaintiff; they promise to pay the balance to another person by the name of Morgan S. Gordon. The plaintiff could not compel the performance of that promise.
If the plaintiff had an interest, it was not the interest which the defendants insured. They insured the vessel itself to “ Peters, Pond & Co., or whom it might concern ; ” which is an insurance only to the owner of the vessel. Riley v. Delafield, 7 Johns. R. 522. When the plaintiff took the receipt of the Hooles, though he might call them to account, he had no interest in the vessel, but only in the proceeds; which is very different. Murray v. Col. Ins. Co., 11 Johns. R. 302. He had no lien, nor any right to be reinstated in the property. There was no mortgage, for the property was not to revest upon the performance of any condition. The promise of the Hooles was a mere collateral undertaking. The change of the property after the insurance was made, affected materially the rights of the insurers, inasmuch as it might render them liable for a total loss without the benefit of salvage ; for if the vessel were damaged to such a degree as to authorize an abandonment and were sold, the proceeds would go to the owner and not to the underwriter. But it is a universal rule, that the insurer is entitled to a cession of the property, before he can be liable as for a total loss. Lucena v. Craufurd, 2 New Rep. 511 ; Higginson v. Dall, 13 Mass. R. 101 ; Russell v. Union Inc. Co., 4 Dallas, 424 ; Toppan v. Atkinson, 2 Mass. R. 366.
But supposing the plaintiff continued to have an insurable interest, he is not entitled to recover as for a total loss. The opinion of the surveyors was, that the vessel could not be repaired in St. Domingo for so little as half her value, but she was in fact repaired in Boston at a small expense. To make a total loss without an abandonment, there must be a total wreck. Mitchell v. Edie, 1 T. R. 608 ; Parmeter v. Todhunter, 1 Campb. 541 ; Allwood v. Henckell, Park on Ins. 280 ; Hodgson v. Blackiston, ibid. 281, n. ; Gernon v. Roy. Exch. Ass. Co., ibid. 281. In some cases a loss has been construed to be total, from the voyage being broken up ; here the insurance is for a term of time and that principle does not apply. If the damage would not authorize the plaintiff to claim as for a total loss without a sale, the sale can make no difference, for the defendants did not take the risk of a sale, and the plaintiff cannot by a sale turn a partial into a total loss. Nothing but extreme necessity will justify a master in selling the ship, and there was no such necessity here. Murray v. Hatch, 6 Mass. R. 477 ; Bell v. Nixon, 1 Holt’s N. P. Cas. 423 ; Martin v. Crokatt, 14 East, 465 ; Van Omeron v. Dowick, 2 Campb. 42 ; Thompson v. Roy. Exch. Ass. Co., 16 East, 214; Abbott on Merch. Ships &c., 8, 9 ; Phillips on Ins. 409 ; Reid v. Darby, 10 East, 143 ; Tunno v. Edwards, 12 East, 488 ; Thornely v. Hebsen, 2 Barn. & Ald. 513 ; Wilson v. Millar, 2 Stark. R. 3.
Prescott and F. Dexter e contrà.
The transfer to the Hooles was a pledge or mortgage for the satisfaction of their claims and of the claims of Morgan S. Gordon against the plaintiff, and if the vessel were lost he would be obliged to pay them notwithstanding the loss. And the case may be likened to an insurance on the life of a debtor. The plaintiff then had at any rate an equitable interest subsisting at the time of the loss, which was insurable. This is protected by a policy on the vessel itself, and it is not necessary, nor customary, except where the lender on respondentia or bottomry gets insurance, to disclose to the underwriter the particular nature of the interest to be insured ; so that the vessel’s being mortgaged after the insurance was made, instead of before, is an immaterial circumstance as it regards the underwriters. Oliver v. Green, 3 Mass. R. 133 ; Locke v. North Am. Ins. Co., 13 Mass. R. 61 ; Smith v. Lascelles, 2 T. R. 187 ; Hibbert v. Carter, 1 T. R. 745 ; Higginson v. Dall, 13 Mass. R. 96 ; Bartlett v. Walter, ibid. 267 ; Phillips on Ins. 27, 28.
Under the circumstances of this case the waster had a right to sell. Hayman v. Molton, 5 Esp. 65 ; Idle v. Roy. Exch. Ass. Co., 3 Moore, 146. In Bell v. Nixon the owner was within reach and should have been consulted by the master, but in this instance he was at a great distance and the master was bound to act immediately. The vessel was bored by the worms during the little time she did remain at St. Domingo. Whether the surveyors were mistaken or not, in thinking she ought to be sold, is not the question ; but whether they and the captain acted with good faith. The master was obliged to use his discretion. If he had gone on to make repairs and the repairs had exceeded the value of the vessel, the defendants would have complained, and with reason, of his not following the advice of the surveyors Green v. Roy. Exch. Ass. Co., 1 Marsh. Rep. 449 ; Read v. Bonham, 3 Bred. & Bing. 147.
It has been intimated, that although there may be a total loss by a sale, yet there ought to be an abandonment. But the owner’s being obliged to part with his vessel in consequence of the perils insured against, is a total destruction as it regards him. If the master may thus bind the owner by a sale, it is reasonable that he should the underwriter. Phillips, 408. It is not necessary to make an abandonment where the underwriter cannot be benefited by it. Phillips, 382 et seq. ; Gordon v. Bowne, 2 Johns. R. 155 ; Gracie v. New York Ins. Co., 8 Johns. R. 246 ; Mellish v. Andrews, 15 East, 13 ; Camberling v. M'Call, 2 Dallas, 280; S. C. 2 Yeates, 280. The reason for an abandonment is, that the insurer may take measures to save the property ; but as there was nothing here to be saved, except the money arising from the remains of the vessel, and which is in the pocket of the assured and may be deducted from the amount recovered of the defendants, an abandonment would have been an idle ceremony ; as in the case of bills of exchange notice to the drawer may be dispensed with, where he has no funds in the hands of the drawee.
This case resembles cases of salvage loss. Stevens on Average, 79, 80. It would introduce circuity of action, if the plaintiff were, obliged to abandon the money to the defendants, and then to bring his action to recover it back.
Hubbard in reply. If the case of Carroll v. Boston Mar. Ins. Co., as- recognised in Locke v. North Am. Ins. Co., is to be respected, the plaintiff had no insurable interest at the time of the loss. He could not get the vessel from the Hooles without a reconveyance, and they might have sold her to any person. All the documentary evidence of title was against the plaintiff’s title, and evidence to' show an interest contrary to the face of the deed, to charge the underwriters, was inadmissible.
Admitting that the surveyors acted with good faith, the survey is not conclusive but only prima facie evidence of the necessity of the sale, and the question of necessity is to be determined by the facts appearing in evidence before the jury ; and the present case shows the danger of admitting th® survey to be conclusive as it respects underwriters and all others concerned. The case of Idle v. Roy. Exch. Ass. Co. is entirely distinguishable from this, and has besides been overruled in Read v. Bonham, 3 Brod. & Bing. 151 and note.
The ship existed in specie as a ship, and the plaintiff should have elected to claim for a partial or a total loss. Suppose the master had sold goods, instead of a ship, and for more than the sum insured on them. The owner would then go for a partial loss. He might do the same thing in the case of a ship ; and a mere sale does not make a loss total, whether the assured chooses to have it so or not.

Opinion:
Parker C. J.
delivered the opinion of the Court. Two principal questions have been raised in support of the motion for a new trial, both of which are attended with some difficulty, as they call upon us to apply rules which have been heretofore adopted, to a state of facts somewhat dissimilar to any we find in the cases reported.
The first is, whether there was, at the happening of the loss, a continuing or subsisting interest in the plaintiff in the subject matter of the insurance. I state the question thus, because at the time when the policy was effected, it is admitted the vessel insured was the sole property of the plaintiff, and his interest was therefore rightly described.
The second question is, whether the loss was of a nature to justify a verdict as for a total loss, without any offer to abandon ; and this involves in it the question, - whether under the circumstances proved the master of the vessel had authority to sell her, so as to vest the property in the purchaser. And this latter question is material, because the necessity of an offer to abandon can be denied upon no other ground, the vessel in fact subsisting in specie after the loss for which indemnity is sought, and down to the time of bringing the action.
In regard to the first question, the important facts are, that after the insurance was made and before the loss happened, the plaintiff had, by bill of sale duly executed, transferred the vessel to the Hooles, taking from them on the same day a written memorandum signed by them, in which they p'Omise to apply the proceeds of the vessel to the payment of certain notes and obligations, due from the plaintiff, on which they, the Hooles, were responsible. And afterwards, and still before the loss, this memorandum was given up and a covenant was entered into under the seals of the Hooles, that they would apply the proceeds of the vessel and other property which had been transferred to them as security, to the same purposes mentioned in the memorandum, and would pay over any surplus there might be after indemnifying themselves, to Morgan S. Gordon.
Now if this transaction is to be viewed as an absolute transfer of property in the vessel to the Hooles, leaving no legal or equitable interest in the plaintiff, certainly there was nothing for the insurance to operate upon at the time of the loss. A man who has sold property insured, and received its equivalent in the price, cannot be said to suffer when the property is destroyed, nor can the purchaser avail himself of the insurance, because no contract was made with him, unless the insurer assents to the transfer and agrees to continue his liability. The case of Carroll v. The Boston Mar. Ins. Co., 8 Mass. R. 515, settled this point, and the English cases are to the same effect.
But a conditional transfer of the property insured, to se cure a debt or a liability, is not attended with the like consequence. One who has mortgaged his vessel even to the full value, has an insurable interest. I cite for this Phillips on Insurance, 41, and in the margin of that page will be found numerous American and English authorities in support of the position. I have looked into those cases and find they fully maintain the position. It is unnecessary to cite them again here, for it is time to stop somewhere in the citation of authorities. I take this opportunity to say, that 1 have found it more easy to get at all I have wanted upon any branch of the law of insurance, from Mr. Phillips's book, than from any other work on insurance which I have been used to consult.
If the equitable interest of a mortgager is capable of being insured, I think it will follow, that if the insured mort gages after the insurance is made; he nevertheless continues t0 be interested so as to have a right to recover in case of loss. He may, it is true, have disabled himself from transferring the property by abandonment, by the mortgage, but this can affect his contract no further than to prevent his turning into a constructive total loss what otherwise would not be so ; that being, as I conceive, the only legal effect of an abandonment. The insured is never obliged to aban don in order to recover the loss which has actually accrued. If the ship is injured in the proportion of three fourths 01 her value, he may refit her if he chooses, and claim his indemnity to the full amount of his actual loss. And in case. of an absolute destruction of the thing insured, an abandonment would be a mere idle ceremony. Lex neminem cogii ad vana seu impossibilia. Not only may a mortgager insure his interest, but so also may a cestui que trust, who has no legal interest in the subject matter.
Now we are to see what is the effect of the transaction between the plaintiff and the Hooles in relation to the vessel insured. Taking it to be bond fide, as we are bound to do, there being no evidence to the contrary, as between the parties it amounted to nothing more than a pledge or mortgage of the vessel to secure a debt or an indemnity. Admitting that the memorandum not under seal, could not foi that reason amount in law to a defeasance of the deed of sale ; yet if it was so intended between the parties, the covenant which was afterwards substituted would in equity have that effect, so that there can be no doubt that a court of equity would compel a reconveyance of the vessel, if the Hooles should have been indemnified without a sale of her, and if sold, they would be compelled, upon their covenar t, to discharge so much of the debts of the plaintiff as her proceeds would amount to, or answer for damages at law upon their covenant. Certainly then the plaintiff was interested in this vessel at the time of the loss, for he is thereby left indebted to an amount equal to her value, which but for the loss would have been discharged.
But this seems to us to be one of those cases, in which the insured cannot claim a total loss by virtue of an abandonment, because by reason of the transfer to the Hooles he had disabled himself from putting the underwriters on the footing which they had a right to expect in case of a loss, from the interest which the plaintiff appeared to have in the vessel at the time of the insurance. He then was in fact, as well as by representation, the absolute and direct owner of the vessel, and so was able to convey a title to the insurer by abandonment ; but afterwards, by his own act, was divested of the legal title, so that he had no dominion over the property itself and could transfer none. If the loss therefore was partial in its nature, it must remain so, as it cannot be converted by abandonment into a total loss. This doctrine is intimated in several cases. Higginson v. Dall, 13 Mass. R. 96 ; Lucena v. Craufurd, in Error, 2 New Rep. 311 ; in which case Sir James Mansfield C. J. said, " The incapacity to abandon, as I apprehend, will have no other effect than this ; that the person who cannot abandon can never recover for a total loss. While any thing remains of the things insured, he may take that and make the most of it ; he can only recover for a partial loss." He is speaking of the case undoubtedly of a constructive total loss. Chambre J. was of opinion, that where there is no power of abandonment there is no insurable interest; if this be true, then none but those who have the absolute property can insure ; which is certainly contrary to well established doctrine.
In the case of Locke v. North Am. Ins. Co., 13 Mass. R. 61, the want of power in the plaintiff to abandon, was held to be no objection to his recovery ; and the doctrine is there recognised, that when the interest is of a kind not to admit of an abandonment of the property, the insured shall recover only the amount actually proved to be lost, thus giving the insurer the benefit of the salvage, which is all he could get by an abandonment.
We must therefore settle the other question presented, which is, whether the loss proved in this case was in its nature total ; if it was not, as there was not and could not have been any effectual abandonment, there must be a new trial. And the best test to ascertain this, is to see whether, had there been no transfer of the vessel after the making of the insurance, the plaintiff could have recovered for a total loss without an offer to abandon. If he could, there is no reason why he should not recover under the actual circumstances. If he could not, he cannot have placed himself in a more favorable situation by his own act of parting with the legal title to the property.
The loss, whether partial or total, was clearly occasioned by the perils insured against. An actual injury was done to the vessel by the violence of the wind and sea. The im mediate effect of the peril was not however a destruction of the vessel; she was left in specie, so that without some consequential act it was not a case of total loss in a natural sense, but one capable of being converted into a constructive total loss, provided she was irreparable except at an expense exceeding half her value ; and whether this expense should arise from the greatness of the actual damage done, or from the difficulty of procuring the repairs in the place where the vesáel was, is immaterial, if the repairs were necessary to put the vessel in a safe and proper condition for sea. In this situation the master caused the vessel to be broken up and sold, and if this was a justifiable act on his part, and the purchaser acquired a good title against the former owner by virtue of his conveyance, it should seem that an offer to abandon would be one of those vain things which the law will not require to be done. If the property was gone from the plaintiff by means of this act of the master, there was nothing to abandon, and it would be quite as sensible to re quire an abandonment if the ship had been destroyed by fire, or sunk in the bottom of the ocean. The money arising from the sale in such case must be held by the master to the use of the underwriters ; it is their property without any abandonment; and if it come to the hands of the insured, it may be deducted from the loss as. so much paid, this being what is called a total loss with benefit of salvage. But this result depends entirely upon the causes which led to the sale ; for it is certain that a master of a vessel as such has no authority to sell the vessel or the cargo, unless in a case of ex treme necessity, and where he acts with the most perfect good faith for the interest of those who are concerned in the property.
There has been a great difference of opinion in courts and among judges upon this subject, insomuch as perhaps to warrant the declaration of Lord Eldon, in the case of Smith v. Robertson, 2 Dow's Parl. Cas. 479, that notwithstanding the boasted certainty of the law in relation to insurance, there is as much uncertainty in this as in any other branch of the science. The very ground upon which the authority rests, namely, extreme necessity, is pregnant with uncertainty, as the facts which create it will vary in their effect upon minds differently constituted.
All the judges who have adverted to this subject, except Lord Mansfield, have put the authority of the master to sell, upon the ground of extreme necessity. That eminent judge said, in the case of Milles v. Fletcher, 1 Doug. 234, " Whatever it was right for the captain to have done, if it had been his own ship and cargo, the underwriters must answer for the consequences of." Probably however his opinion as to this discretionary power was grounded, upon a state of facts which would constitute a necessity of acting.
Chief Justice Gibbs, in Green v. Roy. Exch. Ass. Co., 6 Taunt. 68, seems to adopt the same opinion, but expresses himself in different language. He says, " I think the assured ought to have acted as if the adventure had not been in sured; and if a man of common prudence would have rePaired the ship for his own advantage, not being insured, he should have done so on account of the underwriters; otherwise he would be selling the ship for the purpose of throwing the loss upon the underwriters."
In the case of Idle v. Roy. Exch. Ass. Co., 3 Moore, Chief Justice Dallas says, " The right to sell, as between the captain and the owners, has been deemed of a very questionable nature; although upon the whole, extracting from the books what seems to be the weight of authority, I conceive that the right to sell must be considered to exist in cases of extreme necessity; a right, however, which in all cases must be strictly watched."
In Hayman v. Molton, 5 Esp. 65, Lord Ellenborovgh said, " Where a ship has received irremediable injury, I am disposed to go as far as I can to support what has been contended for, that the captain, acting bond fide, might sell the ship for the benefit of the owners."
In Thornely v. Hebson, 2 Barn. & Ald. 518, Bayley J. says, " The sale, in order to constitute a total loss, must lhave been found to have been necessary, and wholly without the fault of the owners."
1 And in The Gratitudine, 3 Rob. Adm. Rep. 240, and in another case, The Betty Cathcart, 1 Rob. Adm. Rep. 220, Sir William Scott recognizes the same principle in relation to the cargo, which ordinarily the master of the ship as such is a stranger to.
There are several New York cases in which the same principle is adopted; I think we may therefore take it to be established law, that the master of a vessel insured, which has received damage by the perils of the seas, may in cases of necessity sell the vessel, and that upon such sale so occasioned may be founded a claim against the underwriters for a total loss; whether with or without abandonment, is another question for consideration. Whether such necessity existed or not, must be always a question of fact for the jury. This necessity must be of a moral nature, resulting from certain facts and circumstances, which are to be judged of, first by the master himself, and afterwards rejudged by a jury, and perhaps with some strictness, on account of the danger there may be of an abuse of this authority by collusion between the master and owners to the prejudice of the underwriters, or by the fraud of the master alone, to answer some private purpose of his own, or to defraud the owners. But the jury will judge of the conduct of the master from the state of things at the time and place when and where the sale took place, from the conduct of the master in the measures preliminary to the sale, and from the actual circumstances attending it. If the vessel has met with any considerable sea damage, the usual course is to obtain the opinion of competent persons as to the degree of injury, the means of repairing it, and the fitness or unfitness of encountering the expense which may have become necessary. These opinions, founded on facts which are known to the persons composing the board, from actual observation and from personal examination of the vessel, though not conclusive, are certainly very strong evidence of the condition of the vessel, and of the propriety of repairing her or breaking her up as unfit for repair.
Now I think when a vessel has been so far injured by a peril of the sea as to make a survey necessary, and the master with perfect good faith calls such a survey, and the persons appointed to take it are competent in point of skill and wholly disinterested, and they after a full and sufficient examination of the;vessel find her essentially injured, and come to a fair conclusion, that from the high price of materials and of labor, or the difficulty of procuring them, the expense of repairing will be more than the worth of the vessel after she is repaired, and therefore they advise for the interest of all concerned, that the vessel be sold,—in such a state of things as this, it seems to me that a moral necessity is imposed upon the captain to act according to their advice. It must be considered, that thus situated he becomes by law an agent for the insurers as well as the insured, and is equally bound to look to the interest of both. Shall he, in defiance of such an opinion, proceed to repair the vessel, with the certainty of adding to the misfortune which has already be* fallen either the owner or the insurer ? Or shall he leave the vessel without selling or repairing, until he shall return home and communicate her situation to those concerned, that they may act for themselves in relation to her ? I think neither of these things would be expected of him, and that such a course would be exceedingly prejudicial to commerce. The only alternative left for him, is, to pursue the advice of that body of men who by the usages of trade have been immemorially resorted to on such occasions. If they acted fairly and the captain acted fairly, his acts in conformity with their opinions will be justified, unless it shall be made to appear by those who contest the loss, that the facts on which they founded their opinion were untrue, or the inferences they drew from those facts were incorrect. And the burden of proof should be upon those who would impeach these proceedings. If they should be successfully impeached, I t ink the sale of a vessel founded upon them cannot be set up as a ground for a claim of total loss against the underwriters. And in relation to this subject the charge to the jury was incorrect. They were instructed, that if the captain acted bona fide, and the surveyors conducted themselves honestly in examining the vessel and reporting their opinion, the sale was justifiable and constituted a total loss without abandonment. The instruction should have been, that if they were satisfied from all the evidence, giving due weight to the opinions of the surveyors, that the sale was necessary, then the sale constituted a total loss. And we think that an offer to abandon would not have been necessary, but the fact itself of a sale would constitute a total loss.
Opinions are not very explicit upon this subject. Some of the judges say, that while the thing insured remains in specie, whatever damage it may have received, the loss cannot be rendered total without abandonment. And this no doubt is correct, where the insured has a property in the vessel which can be transferred by abandonment. But if the property has passed out of him by a sale which is warranted by the rules of law, no imaginable advantage can result from an abandonment ; and it is probable the general expression above referred to was applied only to cases of that nature. We find there are cases of total loss claimed and allowed without abandonment, where the vessel has been regularly condemned and sold.
Such was the case of Idle v. The Royal Exch. Ass. Co., 3 Moore, 145, decided in the Court of Common Pleas. It was said in argument by the counsel for the defendants, that this case was overruled in the King's Bench, on error, as reported in 3 Brod. & Bing. 147, but this does not appear to be the fact. A venire de novo was ordered, because the record of the Common Pleas did not show that the sale was necessary ; which implies that had it so appeared, the judgment would have been affirmed.
So in the case of Mullett v. Shedden, 13 East, 304, a cargo of saltpetre bélonging to an American, shipped from the East Indies in a British vessel, was seized at the Cape of Good Hope, libelled and condemned ; afterwards the sentence was reversed and restoration decreed ; the cargo however had been sold by order of the court which passed the decree of condemnation. The insured recovered against the underwriter for a total loss, without abandonment. Lord Ellenborough said the property itself was wholly lost to the owner, and therefore the necessity of any abandonment was altogether done away. In .every case of a justifiable sale by a master, the property is wholly dost to the owner, because the purchaser will have acquired a complete title to the vessel. And yet in another case, Martin v. Crokatt, reported in 14 East, 465, an abandonment was held necessary, where the ship had been sold because she was found to be incapable of putting to sea without a heavy and very expensive repair ; but in this latter case the amount or proportion of repairs was not stated in the report of the surveyors, nor did they report that it was necessary that the vessel should be sold ; and the cargo insured by the same policy, though wholly without damage, was sold at the same time. These facts justified the opinion of the court in this case, without doubt, and render it not inconsistent with the previous decision; though the general terras in which the opinion is expressed would seem to require an abandonment in all cases where the ship is not actually destroyed.
In the case of Mellish v. Andrews, 15 East, 304, a total loss was recovered on goods, which had been seized by a foreign government, without an abandonment, this being held to be an actual total loss.
In the case of Gordon v. Bowne, 2 Johns. R. 150, a total loss upon a vessel was recovered, upon the presumption, from lapse of time, that she had foundered, without any abandonment. Kent C. J. said, " the plaintiffs had nothing to abandon. There was an absolute destruction of the whole subject, and the ceremony of abandonment would have been idle." Now here there was spes 'recuperandi, the vessel having been absent but a year, and yet a total loss was presumed.
There certainly is much contrariety of opinion on this subject, but we think the principle on which the matter rests is, that where the property, though injured, is not destroyed, and the insured has any legal interest which he can convey, he must abandon, in order to be entitled to claim for a total loss. On the other hand, where the property is destroyed, or the title is legally divested by a lawful sale, an abandonment is not necessary.
New trial granted.
See Strong v. Manuf. Ins. Co., 10 Pick. 40; Columbian Ins. Co. v. Lawrence, 2 Peters, 46; Buck v. Chesapeake Ins. Co., 1 Peters, 162
See Hall v. Franklin Ins. Co., 9 Pick. 477 ; Winn v. Columbian Ins. Co., 12 Pick. 282 ; Bryant v. Commonwealth Ins. Co., 6 Pick. 131 ; Robertson v. Clarke, 1 Bingh. 445 ; Somes v. Sugrue, 4 Carr. & Payne, 276 ; Cannan v. Meaburn, 1 Bingh. 243; Freeman v. East India Co., 5 Barn. & Ald. 617 ; Fanny and Elmira, Edwards's Adm. R. 117 ; The Schooner Tilton, 5 Mason, 475 et seq ; American Ins. Co. v. Center, 4 Wendell, 52 ; Tanner v. Bennet, Ryan & Moody, 182 ; Idle v. Royal Exch. Ass. Co., 8 Taunt. 755 ; and remarks concerning this case in Read v. Bonham, 3 Brod. & Bingh. 151, note, and in Hall v. Franklin Ins. Co., 9 Pick. 481. It should be observed, that in Idle v. Royal Exch. Ass. Co. the question was, whether the master had a right to sell, so as to bind the insurers, on the facts of the case before the court. This the court considered an inquiry essentially different from that which would arise between the master and owner, in case of a sale. See this same distinction noted in The Schooner Tilton, 5 Mason, 475. See also American Ins. Co. v. Center, 4 Wendell, 52.
See Tindal C. J. in Somes v. Sugrue, 4 Carr. & Payne, 276 ; (19 Serg. & Lowb. 285) ; Patapsco Ins. Co. v. Southgate, 5 Peters, 621.
See Idle v. Royal Exch. Ass. Co., 8 Taunt. 755; The Schooner Tilton, 5 Mason, 475.
See Winn v. Columbian Ins. Co., 12 Pick. 282; Patapsco Ins. Co. v. Southgate, 5 Peters, 623.
The more recent decisions in Westminster Hall go upon the principle, that if a ship be so much injured by the perils of the sea as to prevent her being used as such, and thus render a sale necessary and proper, the loss is total without abandonment. Cambridge v. Anderton, 2 Barn. & Cressw. 691 Robertson v. Clarke, 1 Bingh. 445 ; Hughes on Ins. 384; Chancellor Walworth, in American Ins. Co. v. Center, 4 Wendell, 52. See also Idle v. Royal Exch. Ass. Co., 8 Taunt. 755; Allen v. Sugrue, 8 Barn. & Cressw. 561; Tindal C. J. in Somes v. Sugrue, 4 Carr. & Payne, 276, (19 Serg. &. Lowb 385); Robertson v. Caruthers, 2 Stark. R. 571; Doyle v. Dallas, 2 Moody & Malic. 48; Gardner v. Salvador, id. 116; Roux v. Salvador, 1 Bingh. New Cases, 526.
It was held by Chancellor Walworth, in American Ins. Co. v. Center, 4 Wendell, 52, that the right of the master to sell the ship must necessarily be more extensive in this country than in England, where the doctrine of aban donment for damage of fifty per cent, does not prevail. See 2 Phil. Ins. 295 But in Hall v. Franklin Ins. Co., 9 Pick. 466, the stricter doctrine of the English law was asserted and maintained; and Kent holds that this strict rule is the one best supported by reason and authority. 3 Kent's Com. 2d ed.) 173, n. (c).