Case Name: David Wallerstein, et al. plaintiffs, vs. The Columbian Insurance Company, defendants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1865-12-30
Citations: 3 Rob. 528
Docket Number: 
Parties: David Wallerstein, et al. plaintiffs, vs. The Columbian Insurance Company, defendants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 26
Pages: 528–550

Head Matter:
David Wallerstein, et al. plaintiffs, vs. The Columbian Insurance Company, defendants.
An insurance of a cargo in bulk, “ free of particular average,” does not cover a total destruction of the value of the thing insured, by perils insured against, if any of the articles comprising such cargo remain in specie. McCum, J. dissented.
(Before Moncrief, Monell, and McCunn, JJ.)
Heard December 11, 1865;
decided December 30, 1865.
This action was brought to recover $20,000 upon an open policy of insurance, made in February, 1862, whereby the defendants insured the plaintiffs “ on merchandise free of particular aver age,” by vessels from ports in Europe to New York, risks to be reported for indorsement as soon as known to the assured. In January, 1863, the plaintiffs reported for indorsement 801 bags of coffee, and sixty-four bales of wool, from Havre to New York, by the ship Mortimer Livingston. The indorsement was made accordingly, the defendants adding to the indorsement of each parcel the words u free from particular average.” The ship left Havre in December, 1862, and on the 24th of January, 1863, she went ashore off Cape May, in the state of New Jersey. She became imbedded in the sand, with the water over her main deck at high tide. Her cargo was submerged. The plaintiffs formally abandoned to the defendants both the wool and coffee. The right to abandon was denied by the defendants, and was refused. While the ship lay in this condition, an agreement was made by agents of the ship’s owners, assuming to act for the benefit of all whom it might concern, with a company of wreckers, to save and deliver in New York as much of the cargo and materials as could be saved ; they to receive sixty per cent of the net proceeds. Sixty-one bales of the plaintiff’s wool were taken from the ship, brought to New York, delivered to the ship’s agents, and by them" sold at auction for $1100.02, beyond the auctioneer’s charges. ' A small portion of the coffee was got up from the vessel, swollen with sea water and dis colored ; placed in 203 new bags and sent to New York. The coffee lay for several weeks- in the public store after it was landed in New York, when it was sold at auction by the same ship’s agents, realizing $2.44 over the charges and expenses. The process of rescuing the coffee was by dipping it up out of the hold of the vessel with a skimmer ; it was then washed in salt water, and put in new bags sent on from New York. When taken from the ship and landed in New York, the coffee had all" the appearances of coffee, being in kernals or grains, but it was so damaged as to be absolutely worthless.
A motion was made to dismiss the complaint, which was denied, and the defendants excepted.
The jury found specially, that the coffee when gotten out of the vessel, at the place of the wreck, was of no value whatever. That the fair value of the labor of getting the coffee out of the vessel and transporting it to New York was $776. That the coffee was gotten out of the vessel and brought to New York by the defendants, at their cost and expense, and that their motive was to make a partial loss.
The jury also found specially that the coffee, or some considerable portion of it, was, at the time of the wreck, capable of being'transported to New York.
The jury gave a verdict for the plaintiffs for $22,383.86. The judgment was suspended and the exceptions directed to be heard in the first instance at the general term.
0. O’Gonor and Theodore O. Gone, for the plaintiffs.
1. The warranty against particular average is only intended to exempt the underwriters from liability for mere deterioration of, or injury to, a subject insured, and any loss or expense incurred in consequence of such deterioration or injury. Consequently, the defendants were liable for the value of all the coffee and wool which, not being brought off from the wreck, was totally lost.
1. Whatever may be the inferences deducible from judicial dicta, this is manifestly the import of the warranty. (Mr. Justice Shee’s note No. 1 to Marshall on Ins. p. 603, 5th ed.)
2. No part of the printed matter contained in a policy reconcilable with the portion in manuscript, is to be set aside by the latter. (Phillips on Ins. § 125. Coster v. Phœnix Ins. Co., 2 Wash. C. C. Rep. 53. Delonguemare v. Tradesmen’s Ins. Co., 2 Hall, 623, 628. Wallace v. Ins. Co., 4 Miller’s La. Rep. 291. Robertson v. French, 4 East, 136.)
3. By the express terms of this particular policy, all perils of the sea' to “ any part ” of the property put at risk are insured against, unless it be an average or partial loss of such part. This is manifestly an insurance against the total loss of any distinct part.
II. Under the most rigorous and unfavorable view as ’against the insured which has ever been taken of the clause in question, the underwriter is liable for the total loss of a distinct species ; as, for instance, an entire loss in this case of the wool or of the coffee. Though shipped in the same vessel and constituting part of the same cargo, each distinct species is regarded as the subject of a distinct insurance within the true intent and proper application of the warranty against particular average. (Biays v. Chesapeake Ins. Co., 7 Cranch, 418. Humphreys v. Union Ins. Co., 3 Mason, 440. Guerlain v. Columbian Ins. Co., 7 John. 527. Brooke v. Louisiana State Ins. Co., 4 Martin, N. S. 640. Same v. Same, 5 id. 530. Wadsworth v. Pacific Ins. Co,, 4 Wend. 40, 41, 44. Newlin v. Ins. Co., 20 Penn. R. 317. Ins. Co. v. Bland & Coleman, 9 Dana, 154 to 157, 148. Williams v. Cole, 4 Shepley’s Maine, R. 209. Professor Sharswood, in his note to vol. 67 of the English Com. Law Rep. Phila. citing 2 Arnould on Ins. 855. Ralli v. Janson, 6 Ellis & Blackb. 446; see comment on 'this, 3 Com. Bench, N. S. J. Scott, 19. Duff v. Mackenzie, 3 Com. Bench. N. S. 16. Wilkinson v. Hyde, 3 id. 30. Baily on the Perils of the Sea, 23,24, 25. Shee’s Marshall on Insurance, 182, note b.)
III. There was what amounts in law to a total loss of the coffee.
1. When, by a peril, insured against, as, for instance, a total loss of the vessel, the voyage is defeated, and the goods cannot be carried to the port of destination for want of a conveyance, or the disaster has placed the goods in such a condition that they cannot he carried to the port of destination, except at a cost exceeding their value at that place, the loss on the goods is to be treated as total. When such a state of things exists, there is no distinction, as to the rights of the insured, between an insurance against total loss only, and one in the ordinary form. (Delaware Ins. Co. v. Winter, 38 Penn. R. 187. Poole v. The Protection Ins. Co., 14 Conn. R. 47. Roux v. Salvador, 3 Bingham’s N. C. Rep. 266. Phillips on Insurance, §§ 1766 to 1772. Tudor v. New England Ins. Co., 12 Cush. 556. Rosetto v. Gurney, 11 Com. Bench R. 176.)
2. Cases in which the ship has remained navigable, or has been repaired so as to be capable of pursuing her voyage, and the underwriter, therefore, is "not chargeable merely because a deterioration of the cargo (the very thing excepted from his undertaking) has rendered it unprofitable or inexpedient to to send it forward, are quite irrelevant. (Saltus v. Ocean Ins. Co., 14 John. 145, note a, to p. 141. Maggrath v. Church, 1 Caines, 212, 213. Neilson v. Col. Ins. Co., 3 id. 108, 109. 3 Kent’s Com. 297, side paging.)
3. Destruction of the ship during the voyage, produces, under this clause, as in all other cases, a loss of the voyage, and, prima facie, a total loss of the cargo. It is true, that if another ship can be procured, it being the duty of the master, qua agent for the shipper, to send the cargo forward, his neglect of that duty will not charge the underwriter. His act in voluntarily relinquishing the adventure which he had the means of prosecuting" to a successful issue, is the act of the shipper.
4. In the case under consideration, the master had not, in judgment of law, any sufficient means for carrying the adventure to a regular and successful termination. It was an absolute wreck at sea ; not a temporary interruption at or near an intermediate port. (Saltus v. Ocean Ins. Co., 12 John. 111. 18 id. 210. Treadwell v. Union Ins. Co., 6 Cowen, 274.) Sending forward the coffee would have been wantonly mischievous. The ship owner could only earn freight by it at a cost to himself far exceeding the freight earned. To the shipper it would have produced no result except an absolute loss of the freight exacted from him. Consequently, the master did not owe either to the ship owner or the shipper, his only principals, any duty in the premises. (De Caudre v. Swann, 16 Com. B. N. S. 781, 782, 795.) Whether insurance or not, this would be an accurate view of the facts, and of the relations of all concerned in the adventure.
5. Under insurances against total loss only, there may be an abandonment for a constructive total loss. (Adams v. Mackenzie, 32 Law Jour. N. S. Com. Pleas, 99. 9 Jurist, N. S. 849. S. C. 13 Com. Bench, N. S. 442. Granger v. Martin, 2 Best & Smith, 467, 168. S. C. affirmed, 4 id. 12.)
6 If the wreckers had brought the coffee to New York, it would not have entitled the ship owners to freight, or barred a claim for a total loss on the policy in suit, (a.) When a salvor brings home goods from a wreck, the ship owner acquires thereby no title.to freight. The owner, if he accepts the goods, pays salvage for the service rendered, instead of freight for the attempted service which failed. • (Dunnett v. Tomhagen, 3 John. 156, (6.) The operation, if performed by the wreckers, would have been a salvage service. The idea of general average was wholly inapplicable to it. (Heyliger v. Fireman’s Ins. Co., 11 John. 85. Lewis v. Williams, 1 Hall’s R. 443, 444. Great Ind. Peninsula R. R. Co. v. Saunders, 1 Best & Smith, 52. (c.) Where every other circumstance necessary to constitute a physical total loss in every sense, is found to concur, the fact that some part, of insignificant value, is saved by extraordinary effort, stimulated by the hope of extraordinary gain, will not prevent the loss from being deemed total, within the true intent and meaning of the clause in question. (Bryan & Maitland v. New York Ins. Co., 25 Wend. 618.) (d.) In the judgment of common sense, the loss was total. (Moss v. Smith, 9 Man. Gran. & Scott, or 9 Com. Bench, 102 to 104. Farnsworth v. Hyde, 29 Lond. Jur. N. S. 349. Lozano v. Johnson, 2 Ellis & Ellis, 178. Granger v. Martin, 2 Best & Smith, 467, 468.) (e.) All the acts of Boyd & Hincken, and of the wreckers were, as it respects the interest of Wallerstein & Kunst in the coffee, illegal and tortious. No part of it ever came in any way to the use of Wallerstein & Kunst. (The Hamburg, 32 Law Jour., N. S., Adm. 161. S. C. on appeal, Durant v. Hart, 33 id. Adm. 115. Richardson v. Young, 38 Penn. Rep. 175. Bryant v. Commonwealth Ins. Co., 13 Pick. 552, 553.)
7. The interposition of the underwriters to carry to New ■York, by great effort and at enormous expense, a worthless fragment of the subject insured, is an attempted fraud upon their contract, which will be frowned upon in every court of justice before which it may appear.
A. C. Morris, for the defendant.
I. The insurance being free from particular average, and a large part of the coffee (203 out of 801 bags) having been saved and delivered at its port of destination, the defendants are not liable for any part of the loss. The law upon this point in this state is well settled. “ Free from average unless general,” “free from particular average,” and “against total loss only,” are equivalent terms. (2 Parson’s Mar. Law, 338, note 2. Phillips on Ins. § 1767. Le Roy v. Gouverneur, 1 John. Cas. 226. Maggrath v. Church, 1 Cai. 196. Neilson v. Columbian Ins. Co., 3 id. 108. Saltus v. Ocean Ins. Co., 14 John. 141. Depeyster v. Sun Mutual Ins. Co., 19 N. Y. Rep. 273. Wadsworth v. Pacific Ins. Co., 4 Wend. 33, op. Ch. Walworth, p. 41. Phillips on Ins. § 1773.)
II. If in the present case the owners of the ship had abandoned her, as derelict, and refused to bring the cargo to New York, it would have been the duty of the assured upon the coffee, as between themselves and the insurers, to have used every effort to save it, no matter what the expense might be. So long as the coffee physically existed and was capable of being transported to its port of destination, the assured could have no claim against the insurers.
Upon this point the law of England differs materially from our own. In England insurance free from average is regarded as an insurance against total loss, actual or constructive, and in determining the question of constructive total loss no difference is made between memorandum and other articles. Arnould says, (vol. 2, side p. 1124,) “ The warranty to be free from average makes no difference in this country, (England,) in considering whether the loss be on principle, total or partial.” But adds in a note (i.) “ It is different in the United States, where there can be no constructive loss on memorandum articles.” The cases of Moss v. Smith, (9 Com. B. 94;) Rosetto v. Gurney, (11 id. 176;) Parry v. Aberdeen, (9 B. & C. 411 ;) Germon v. Royal Exchange Ins. Co., (6 Taunt. 585; Holdsworth v. Wise, 7 B. & C.;) Hunt v. Royal Exchange Co., (5 M. & S. 47;) Thomley v. Hobson, (2 B. & A. 513;) and Roux v. Salvadore, (2 Bing. 266,) turn upon the question of the totality of the loss.
That the total destruction of the value of an article constitutes, for all practical purposes, a total loss of such article, cannot be disputed ; but such principle can have no application to a case where, by the very terms of the insurance, the underwriter is not to be liable for a total loss in value, while the article itself still remains in specie, and within the control of the assured. Where by some disaster the subject of insurance is placed in a situation of peril, from which it would cost more to relieve it, and forward it to its port of destination, than its sound value, there would be some reason in holding it to be a total loss. But the same manner of reasoning, when applied to. damaged goods, would lead to the injustice of indirectly charging the insurer for deterioration of the goods, for which by the terms of his contract he is made not answerable. The point under consideration came up in this court in a somewhat different shape, but involving precisely the same principle, in the case of Ogden v. General Mutual Ins. Co., (2 Duer, 204, 215.)
III. Where there is an insurance upon the goods free from particular average, and the vessel is stranded and abandoned by the crew, as derelict, and the owner of the goods neglects to make any effort to save them, the insurer has a right to rescue them himself; and upon delivering them to the assured at the port of destination, his obligation has been fully performed. It is not of the slightest importance what the cost of saving them has been. His undertaking with the assured is, that his goods shall arrive at the port of destination in specie, and this undertaking being performed, he is exonerated. It follows that it is not of the slightest importance, in this case, 'whether the goods were saved by the wrecking company, or were saved by the defendants.
IV. But the evidence is clear and uncontradicted, that the goods were not saved by the defendants, but by the owners of the vessels, through their agents, the wrecking company. It cannot be denied that the defendants, anxious to save themselves from loss, sent their inspector to the wreck to look after their interests. He found the vessel in the lawful possession of a wrecking company, who derived such possession from the owners themselves. An agent of the wrecking company, (Capt. Post,) had charge of the wreck, and another agent, (Capt. Pierce,) was in the vicinity, with his lighter, to receive the cargo as it came across the beach. Possibly without. the active intervention of Captain Barkman, the wool and coffee would have been neglected by the wreckers, and lost. It was for the interest of the plaintiffs that it should be lost, and of the defendants that it should be saved. The interest of the wreckers was on the-side of the defendants, who, by furnishing the empty bags, and the services of Captain Barkman gratuitously, offered an inducement to the wreckers to give the wool and coffee a preference. The result was that the owners of the vessel, through their agents, (the wrecking company,) brought to Hew York, the port of destination, nearly all the wool, and 203 bags of coffee, out of 801. Upon the arrival of the coffee at Hew York, it was subject to the orders of the plaintiffs, upon their paying sixty per cent of its appraised value. This would leave to the assured 82 bags, free from all charges', except freight.

Opinion:
By the Court, Monell, J.
The single question presented in this case is, whether the defendants are liable upon their policy, as for a total loss of the property insured. The words " free from particular average," in the policy, are understood to mean free from partial loss, and are equivalent to "free of average," or " free of average except general." Such a policy is an insurance against a total physical loss only. Underwriters, being unwilling to indemnify against the deterioration of perishable property, stipulate to pay only in the event of a total loss of the thing insured, by reason of any of the perils insured against. The contract between the parties was, that the defendants would indemify the plaintiff for a total loss of the property insured; for any thing less than a total loss they should not be liable ; and such is the precise meaning of the words " free of particular average."
The words " total loss " have received much judicial construction. In a literal sense, they mean complete physical annihilation and destruction of the thing; in another and more liberal sense, they signify a loss total to the owner, as where the goods are seized and taken away, or are rendered worthléss for the uses or. purposes for which they were designed.
It is obvious from the nature of the contract of indemity, that the loss must be actually or constructively total.
The doctrine which prevails in this state, and I may say in the country generally, is that if' the goods insured arrive at the port of destination, existing in specie, the underwriters are not liable, although the goods are of no value whatever. Thus, fish absolutely spoiled, (Cocking v. Frazer, Park on Ins. 151,) and corn which was putrid, (Neilson v. Columbian Ins. Co., 3 Caines, 108,) were held to exist in specie. .
In this state the construction of these contracts has been rigidly strict. The courts have, with great uniformity and unanimity, required a total annihilation of the subject insured; or that it should be in such a state as to have lost all appearances of what it was; in other words, that it no longer existed in specie. •
The English rule has been somewhat moderated by recent decisions, it "being now held that if the article has become valueless, or if the expense of shipping it to the port of discharge would be equal to its value there, it is a total and not a partial loss. (Moss v. Smith, 9 Com. B. 94. Rosetto v. Gurney, 11 id. 176.) Such a rule is undoubtedly founded in common sense, as well as in common justice. The underwriters stipulate against a total loss, and it is violently straining the meaning of words if a complete and entire loss of the thing to the assured by reason of its entire loss of value, is not a total loss. If perishable goods arrive at the port of destination so damaged by the perils of the sea as to be absolutely of no value whatever, the loss is as. complete to the assured as if they were sunken to the bottom, or thrown broadcast upon the surface of the seas, beyond the reach of human power to recover.
The condition, "free of particular average," and similar conditions, were designed to protect the underwriters from liability for partial loss to perishable goods, by inherent perish-ability ; but it was never intended to absolve the insurers from losses total in their nature by reason of the destruction of all value to the thing insured, although in appearance it retains a semblance of what it was It is not unfair towards underwriters to insist that the total loss of value in the thing insured, is within the spirit and intent, if not within the letter, of the contract. Their indemnity is against a total loss, and there can be no difference between annihilation and complete loss o'f value.
The reasoning in favor of annihilation, or a total destruction of the species, is not satisfactory. It requires that the species itself should disappear ; that the form should become changed, and their original character be entirely lost by decomposition. It seems to me this is shutting in, within very narrow limits, the obligations which underwriters impose upon themselves by their contract, and leaves but little scope for indemnity to the assured.
It may be regarded, I think, as another step towards moderating the views long entertained of the precise extent of the underwriters' liability, that judges in England, at least, are attaching the liability for .total loss of value, as well as for total loss by annihilation ; and were we allowed to follow the modem English cases, (to some of which I have referred,) we should find enough to sustain the verdict in this case.
The current of decisions, however, in this state, is so strong and uniform that we are forced, by their authority, to ignore the more just and reasonable rule, now seemingly being adopted by the English courts.
From the earliest reported cases in this state, (Magrath v. Church, 1 Caines, 196,) down to the present time, (DePeyster v. Sun Mutual Ins. Co., 19 N. Y. Rep. 272,) our courts have adhered to the doctrine that there must be an actual destruction of the article, and not such a technical loss as would authorize an abandonment. Hence, if any part of the insured property arrives at the port of destination, in specie, although utterly valueless, the underwriters are not liable.
We are not at liberty to disregard law so long and so thoroughly settled, and although opposed, in our. judgment, to the true spirit and meaning of the contract of indemnity, we must nevertheless yield to its authority.
A portion of the coffee covered by the defendants' policy was recovered, and arrived in specie, at the port of destination. Mr. Parsons says, (2 Pars. Mar. Law, 381,) that the primitive meaning of the word specie is " appearance," and it is in this sense that it is commonly applied to memorandum articles. Nearly all the witnesses testified that the coffee which arrived here from the wreck retained the appearance of coffee. It was in the kernel or berry, and although so damaged by sea water as to be absolutely of no value, it nevertheless bore the resemblance of the article, and could readily be recognized as coffee. It therefore (within the cases in this state) arrived at this port in specie, and the underwriters are relieved from liability. Strictum jus alone can uphold such a result.
The special findings of the jury do not help the plaintiffs' case. The question is, did the coffee arrive here in specie ? The instrumentalities used to effectuate the arrival are of no consequence; and I can see no reason why the defendants could not with propriety, to make the loss partial, employ wreckers or others to rescue the cargo. Certainly, in the absence of any fraud or overreaching, they had the right to avoid liability by saving the property insured. Nor is their doing so any evidence of an acceptance of a supposed abandonment to them, by the assured ; especially after their denial of the right to abandon.
The law of this state, as applied to the facts of this case, being opposed to a recovery by the plaintiff, it was error in the judge to refuse to dismiss the complaint. The objection was therefore well taken. The verdict must be set aside, and there must be a new trial, with costs to the defendants, to abide the event.
Moncrief, J. concurred.