Case Name: The American Insurance Company v. Ogden and Macomb, 20 Wend. 287-322
Court: New York Court for the Correction of Errors
Jurisdiction: New York
Decision Date: 1799
Citations: 1 Lock. Rev. Cas. 263
Docket Number: 
Parties: The American Insurance Company v. Ogden and Macomb, 20 Wend. 287-322.
Judges: 
Reporter: Lockwood's Reversed Cases
Volume: 1
Pages: 263–292

Head Matter:
The American Insurance Company v. Ogden and Macomb, 20 Wend. 287-322.
In S. Ct. 15 id. 535.
Sea Worthiness ; Abandonment for Total Technical Loss ; Deduction of One-Third Neto for Old.
This was an action on a policy of insurance originally brought by Ogden and Macomb, in the New York Superior Court, against the defendants, as underwriters on three-fourths of a schooner, in the names of Ogden and Macomb, as the agents of the owner, loss payable to them. The policy was for six months from, the 17th of November, 1829; sum insured, $1,800. The vessel sailed on the 26th of November, on a voyage from New York to Charleston, thence to Norfolk, and thence to St. Thomas in the West Indies. While going into Charleston harbor, and while the vessel was in charge of a pilot, the small bower anchor was lost on the outward bar. The schooner did not go up to the city; but discharged her cargo, which consisted of stone, about a mile and a half from the city. The vessel remained five or six days in the harbor; the pilot engaged to get up the anchor but did not; and the wind being fair, the schooner sailed for Norfolk, where she arrived in safety. On her arrival there, the master made inquiries for an anchor, but could not procure one of a suitable size ; those he saw, were too heavy or too light. He remained there nine or ten days, took in a cargo of shingles, and sailed for St. Thomas, on the 7th of January. Three days afterward, the schooner sprung a leak in consequence of a heavy cross sea, and in three days more she encountered a heavy gale, with a heavy sea; her sails were split, and her mainmast sprung, and she became very leaky. She, however, succeeded in reaching St. Thomas, on the 25th of January. The master, after making inquiries of mechanics, made an estimate that the vessel could not be repaired and rendered sea worthy for less than $1,700. The cargo was discharged, and a survey was taken of the vessel by three surveyors, appointed by the U. S. consul, who reported that the repairs might be made for $800 or $900. The master was wholly destitute of funds; the con signees of the cargo refused to make advances, the freight having been previously drawn for, and they holding a protested draft for the samé ; and money could not be obtained on bottomry, although the master attempted to raise money in that way for the purpose of making repairs. Under these circumstances, the vessel was sold at auction and brought only the sum of $388. The plaintiffs abandoned as for a total loss. The insurance company offered to pay the loss, as estimated by the surveyors at St. Thomas ; which offer the plaintiffs refused, and brought their suit.
On the trial in the New York Superior Court, the defendants requested the judge to charge the jury, 1. That St. Thomas being the port of destination, the inability of the master to procure there, the necessary funds for repairing the vessel, was not a sufficient ground of abandonment. 2. That the policy being on time, the warranty of seaworthiness attached as a condition precedent at the commencement of each voyage, during the period which it covered, and that it being admitted that the vessel was unseaworthy, from the want of an anchor, when she left Charleston, and also when she left Norfolk, the defendants were discharged from all subsequent perils; or, if the judge was of a different opinion, that then he should charge that the evidence was not sufficient to excuse the laches of the master, in not recovering the anchor, or obtaining a new one at Charleston, and that therefore the defendants were discharged from all subsequent liability; and 3. That if the judge should be of opinion the laches of the master at Charleston was sufficiently excused, then that he should charge the jury that it was the duty of the master after his arrival at Norfolk, if an anchor could not be there obtained, to procure one from a neighboring port; and if the jury should be of opinión that by sending to Baltimore or New York, or any other neighboring port, the master could have obtained one without unreasonable delay of the voyage, then that the defendants were entitled to their verdict. The judge charged the jury that the inability of the master to procure the necessary funds at St. Thomas was a valid cause of abandonment; and further Instructed them that the vessel continued to be covered by the policy during the voyage, and that the plaintffs were entitled to recover, if the negligence and laches imputed to the master were sufficiently excused, and that the material question of fact on that point was, whether the master made use of due diligence at Norfolk to obtain an anchor. The defendants excepted to the charge. Verdict for the plaintiffs for $2,161; on which judgment having been rendered, the defendants brought error to the Supreme Court.

Opinion:
Á majority of that court, Savage, Ch. J., and Nelson, J., (Bronson, J., dissenting,) held, Savage, Ch. J., delivering the opinion:
1. " That the seaworthiness, implied in a policy of insurance, related only to the commencement of the risk; if then broken, the insurer was discharged; but that a breach of this warranty after the risk has begun, does not discharge the insuree, unless the loss be the consequence of such unseaworthiness."
2. " That it is not necessary that the injury to a vessel by the perils insured against, should, in all cases, exceed one-half the value to justify an abandonment as for a total loss; the inability of the master to procure the necessary funds to make repairs, is a valid cause of abandonment, although the vessel be in the port of destination, and not an intermediate one, or one of necessity."
After disposing of the question of seaworthiness, as above stated, Ch. Savage says: " The next point urged in behalf of the insurers is, that the want of funds wherewith to make repairs is not a good ground of abandonment." " The right is as perfect, under the construction which has long been given to policies of insurance, to recover for a technical total loss, as for an actual total loss, or a partial loss. In the case of Peele v. The Merchants Ins. Co., 3 Mason 65, Mr. Justice Story after a very elaborate review of most, if not all the cases on this point, comes to the conclusion that the right of abandonment exists, in the five cases, which he enumerates, the fifth and last of which is " Where the injury is so extensive, that by reason of it the ship is useless, and yet the necessary repairs would exceed her present value," He further remarks: " If there be any general principle that pervades and governs them, it seems to be this; that the right to abandon exists, whenever, from the circumstances of the case, the ship, for all the useful purposes of a ship for the voyage, is, for the present, gone from the control of the owner, and the time when she will be restored to him in a state to resume the voyage, is uncertain, or unreasonably distant, or the risk and expense are disproporlioned to the expected benefit and objects of the voyage. In such a case, the law deems the ship, though having a physical existence, as ceasing to exist for purposes of utility, and therefore subjects her to be treated as lost." The conclusion here drawn from the case, has received the approbation of Chancellor Kent. In his commentaries, 3 Kent, 322, he says; " The conclusion is, that the right of abandonment is to be judged of by all the circumstances of each particular case, and that there is no general rule ; that the injury to the ship by the perils insured against, must, in all cases, exceed the one-half her value, to justify an abandonment." The case of the Patapsco Ins. Co. v. Southgate and others, 5 Peters R., 604, exemplifies this principle. The opinion of the court was delivered by Thompson, J. He states that the court below had instructed the jury that if the vessel could not have been repaired without an expenditure exceeding half her value at the port of Garthagena, after such repairs, it constituted a total loss. " This direction," says the learned judge (Thompson,) " we certainly think correct."
Ch. J. Savage continues :
"In the case under consideration, the defendants below raised no question of fact for the jury upon the bona fideo or discretion of the master." "This presents the point whether the inability to repair the vessel, which must be admitted to have been a real inability, was a good cause of abandonment. These facts conceded, it seems to me to come precisely within the case of The Patapsco Ins. Go. v. Southgate, where a sale of the ship had become necessary for the interest of all concerned."
" In this case, the master had all the means of acquiring credit which the control of the ship gave him, which in this action I think is sufficient."