Case Name: William Lovering Junior versus The Mercantile Marine Insurance Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1832-03-30
Citations: 12 Pick. 348
Docket Number: 
Parties: William Lovering Junior versus The Mercantile Marine Insurance Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 29
Pages: 353–376

Head Matter:
William Lovering Junior versus The Mercantile Marine Insurance Company.
A ship belonging to a citizen of the United States, being insured, sailed on a voyage from Buenos Ayres to China and back, with a cargo belonging to citizens of Buenos Ayres, and after entering the River La Plata on her return voyage, the master being ignorant that war had commenced between the Brazils and Buenos Ayres, she was taken by a Brazilian squadron blockading the port of Buenos Ayres and sent under a prize master to Rio Janeiro, where prize proceedings were instituted by the captors, and during the pendency of the same she was seasonably abandoned to the underwriters. It was held, that the capture was hostile 5 that the case did not come within the perils excepted in the policy, of illicit trade or trade in articles contraband of war, there being no evidence that the ship was violating any of the laws of trade of Buenos Ayres, or that she had on board articles contraband of war; that she was not violating the belligerent rights of Brazil, as she had no notice of the blockade; and consequently, that the underwriters were liable for the loss.
Under a policy of insurance containing a clause, that il in case of capture or detention the assured shall not have the right to abandon therefor until proof is exhibited of condemnation, or of the continuance of the detention for at least ninety days,” although the detention may in reality have continued for that period, yet the assured cannot abandon therefor until he has intelligence of that fact.
But a premature offer to abandon for such detention may, in consequence of the acts of the parties, operate as a continuing notice of abandonment, which will become effectual so soon as the assured shall receive and communicate to the underwriters evidence of the detention’s having continued ninety days. Thus, where the offer was never countermanded, but the assured, as well in furnishing the requisite proof of the continuance of the detention as in other transactions witli the underwriters, acted upon it, from time to time, with their knowledge, as a subsisting notice, it was held to have become a valid abandonment.
The kind or degree of proof necessary to be furnished, on the offer to abandon, of the continuance of the detention, is not that which would be required to sustain an action on the policy, but such as is usually produced to underwriters as preliminary proof of loss, is sufficient.
The redelivery of the vessel to the assured, by order of the prize court, upon his giving bond either to return the vessel in specie or pay her value in case of a condemnation, is no determination of the hostile detention.
The delivery of the vessel on bail to an agent appointed by the master after the capture, is not a waiver of the abandonment; for if the abandonment was valid, such agent was the agent of the underwriters themselves, and not of the assured.
So if the master appoints an unsuitable person (for example, the agent of the captors) to protect the property, it will not affect an abandonment valid in other respects; for such agent is the agent of the underwriters.
Where the assured, in making an abandonment in consequence of information contained in a letter, communicates so much of the letter as he deems material, expressly designating it as an extract, and the underwriters do not call for the whole of the letter, the omission to communicate the whole will not affect the validity of the abandonment.
Where a vessel, insured in a valued policy, is captured as prize and abandoned to the underwriters, and is redelivered on bail upon a valuation made by order of the prize court, the amount of damages in a recovery for a total loss is accord ing to the valuation in the policy, and not according to that made in the prise court.
A ship was insured for twelve months or until her arrival, at the premium of four and a half per cent, per annum and at that rate for a longer or shorter period, but warranting two and a half per cent, for six months, and the assured was not entitled to abandon for capture or detention until proof should be exhibited of the detention having continued ninety days. The ship was captured just before the expiration of the six months, and after proof exhibited of detention for ninety days, was abandoned. It was held, that the abandonment had relation back to the time of the capture, the result showing a total loss at that time, and that the underwriters were entitled to a premium for only six months.
This was assumpsit on a policy of insurance, dated October 31, 1825, and underwritten by the defendants, for the sum of 11,000 dollars, on the brig Leonidas, valued at that sum, to, at and from all ports and places to which she might proceed, for and during the term of twelve months, (commencing on December 29, 1825,) or until her arrival at a port of discharge in the United States, at the rate of 4| per cent, per annum, warranting 2| per cent, for six months ; additional or return premium to be pro rata as 4| per cent, is for twelve months. In the policy, “ it is also agreed, that in case of capture or detention, the assured shall not have the right to abandon therefor, until proof is exhibited of condemnation, or of the continuance of the detention (by capture or other arrest) for at least ninety days ; and the assured shall not abandon in consequence of the port of destination being blockaded, but the vessel shall, in such case, have liberty to proceed to another port not blockaded, and there end the voyage, or wait a reasonable time for the blockade of the original port of destination to be raised.” “It is also agreed, that the assurers shall not be answerable for any charge, damage or loss which may arise in consequence of seizure or detention for or on account of illicit or prohibited trade, or trade in articles contraband of war.”
The action was commenced in May 1827.
It was proved on the trial, that the brig was the property of the plaintiff. On June 8, 1825, being then at the city of Buenos Ayres, under the government of the United Provinces of the .River La Plata, she was chartered by certain citizens of those provinces, for a voyage from Buenos Ayres to Whampoa in China and back to Buenos Ayres. She sailed from Buenos Ayres in August 1825, on that voyage, the United Provinces of the River La Plata then being at peace with the government of the Brazils. She arrived at Whampoa, there took in a lawful cargo, and proceeded thence in February 1826, on her return voyage for Buenos Ayres. On her arrival in the River La Plata, and while proceeding for her port of destination, ignorant of the war then subsisting between the government of the United Provinces of the River La Plata and the government of the Brazils, and ignorant also of the blockade of Buenos Ayres, to wit, on June 13, 1826, she was captured by the Brazilian ships of war then blockading Buenos Ayres, because she was proceeding to a blockaded port. A prize crew was put on board, and she was ordered to Monte Video, then under the government of the Brazils, where she arrived on the 17th of June. On her arrival there, all her men were taken out by the captors, except her first and second mates and cook, and were put on board a Brazilian ship of war. While the master of the brig was gone on shore to enter his protest, she was got under weigh by the prize crew, for Rio Janeiro. The master afterwards proceeded to Rio Janeiro, where he arrived on the 20th of July and made protest. He there found the Leonidas in possession of the prize crew. Her cargo was taken out by the officers of the Brazilian government, in the course of the month of July, and placed in the public storehouses. After the arrival of the brig at Rio Janeiro, the mate, considering it for the interest of all concerned, appointed Samuel Clapp & Co., merchants at that place, to be agents for the brig, and the master, upon his arrival there, confirmed the appointment. Proceedings were immediately commenced by the captors, in the Admiralty Court at Rio Janeiro, for the condemnation of the brig, for alleged breach of the blockade, and because a part of her cargo was the property of an enemy. The plaintiff, as owner of the brig, defended against her condemnation, and made claim for her restoration; which was obtained by sentence of the lower court on February 5, 1827. An appeal was then interposed by the captors, but by a final judgment of the Court of Appeals, which was passed on July 9, 1827, the decree of the lower cour was affirmed, with costs against the captors.
A government valuation of the Leonidas was made at Rio Janeiro, dated August 21, 1826, in which she was estimated at 5425 mil, 760 reas.
For the benefit of all concerned, Clapp & Co. petitioned the court to receive their bond, payable on condition that the lawsuit then pending should terminate in the condemnation of the brig, as prize to the captors. This petition being granted, Clapp & Co. gave bond of the same amount as the government valuation, and bearing even date therewith, which bond was filed on September 14, 1826. In pursuance thereof the brig was on that day delivered to Clapp Si Co., and the prize crew was thereupon discharged from her by order of the court. The bond continued in force till the final decision on July 9, 1827.
On September 11, 1826, the plaintiff wrote to the defendants as follows : — “ Having received intelligence of the capture or detention of brig Leonidas on the 13th June last, on her voyage from Canton to Buenos Ayres, by the Brazilian squadron, of her being sent to Rio Janeiro and of her arrival there, as per extract of a letter herewith submitted, and ninety days having elapsed since said capture and detention, I hereby abandon to the Mercantile Marine Insurance Company all my right, title and interest in and to said vessel and to her freight, as far as the same are insured by said company, and claim on and for each a total loss.”
The letter referred to in the foregoing abandonment, was from R. S. Pulsifer, the mate of the brig, dated at Rio Janeiro, July 18, 1826. In the extract he states, that the brig left Macao on February 22d, had spoken nothing on the passage and had arrived in the River La Plata, bound up to Buenos Ayres, when she was brought to by the Brazilian squadron on June 13th, that she was sent to Monte Video, and thence to Rio Janeiro, under a prize master and prize crew, that the master of the brig was left at Monte Video, that she arrived at Rio Janeiro on the 10th of July, and he (the mate) immediately made a protest and took every measure requisite on the part of the vessel, and that he hoped the master would soon come there from Monte Video. In the part not then communicated to the defendants, the mate says that he has employed as agents Samuel Clapp & Co. to transact the business for all who may be concerned in the voyage, that the vessel was visited by the government officers and sealed up the day after she arrived at Rio Janeiro and had remained sealed ever since, that he was endeavouring to get permission to land the cargo and put it into the government storehouses, to clear the brig as soon as possible, that he does not think there will be any trouble with the part of the cargo owned by Englishmen, that what he has done has been sanctioned by his agents and by the United States charge d’affaires, and that the United States ship of war Cyane is at Rio Janeiro, the captain of which has offered the assistance in his power.
The defendants refused to accept the abandonment.
The plaintiff did not receive any further intelligence subsequently to September 11, 1826, until December 1, 1826, when the brig arrived in Boston under the command of another master. On that day the plaintiff requested the defendants to authorize him to instruct and empower agents for the benefit of whom it might concern, it being understood that any thing contained in the application or any authority that might be granted in consequence thereof, should not be construed to the prejudice of the rights of either party.
On the same day the defendants authorize the plaintiff to appoint suitable agents for the benefit of whomsoever it may concern, “ without prejudice to any rights you may have by reason of your abandonment; it being expressly declared however, that this assent is not to be taken as implying any acceptance of that abandonment on the part of the company, which was and still is refused, nor as admitting on their part any liability on account thereof.”
On the same day the defendants wrote another letter to the plaintiff, in which they say, “ we stipulate with you, that any act or thing done and performed by you in the premises, shall not in any wise be deemed or construed in any manner to prejudice any claim you have or think you may have upon the company, by virtue of your abandonment or otherwise ; and it is also to be distinctly understood, that we do not by this act intend to commit the rights of the company, nor is the same to be construed into an acceptance of your abandonment or the admission of your claim, but this letter is granted with the v‘ew °f protecting the property from greater expenses which might be incurred ; and it is to be understood that it shall not affect or prejudice the rights of either party, and shall not be used, in case of controversy concerning the right of abandonment, excepting as evidence of your authority to act for all whom it may concern.”
This last clause was repeated substantially, in a letter of the 5th of December, in which the defendants empowered the plaintiff to sell the brig.
In the early part of April 1827, the former master of the brig having arrived in Boston, a statement of the claim of the plaintiff as ftir a total loss, embracing all the items of disbursement and claim on the part of the plaintiff, was made out by an insurance broker, at the request of the plaintiff, and presented to the defendants about the 25th of April, and was examined by the president of the company and the broker together, and the subject of the claim for a total loss was discussed by them at divers times at or about the same period.
At the several conferences between the. president and the broker, on the subject of the claim for a total loss, the president never objected to the payment of the loss for insufficiency of the preliminary proofs ; the main objection was, that the loss did not continue total after the giving of the bond. The broker, in a written opinion exhibited to the president in April 1827, maintained the contrary position, and that the abandonment on the 11th of September 1826 was valid.
A nonsuit was entered, subject to the opinion of the whole Court.
March 9th, 1831"
J. Pickering and W. Phillips for the plaintiff.
The assured had a right to abandon on the 11th of September, the vessel having then been ninety days under detention. It was not requisite that he should have had intelligence of the detention’s having continued for that period of time. Policies of insurance are to receive a liberal construction. In Ogden v. Columbian Ins. Co., 10 Johns. R. 273, where there was a warranty that the assured should not abandon, if the vessel were detained or captured, until six months after notice thereof to the insurers, and the vessel was condemned in a month after capture, it was held that he might abandon immediately after condemnation. By an abandonment the assured intends that the vessel shall be at the risk of the underwriters. The general rule is, that he must abandon as soon as he has information that the peril has fixed upon the subject of the insurance. The clause in this policy, that the assured shall not have the right to abandon until proof is exhibited of the continuance of the detention, by capture or other arrest, for at least ninety days, is of recent origin and has not yet received a judicial construction, although there is a dictum on the subject ; Dorr v. Union Ins. Co. 8 Mass. R. 504; Delano v. Bedford Ins. Co. 10 Mass. R. 347 ; but it is apprehended that this clause does not overrule the common principle above stated. According to the decisions of this Court, the validity of an abandonment depends, not on the state of information, but on the state of the facts existing at the time. Lee v. Bordman, 3 Mass. R. 238. The proof therefore at the time of an abandonment, is generally incomplete in the case of a constructive total loss, where the vessel is in a remote country. Suppose a clause that the assured shall not abandon for a stranding, without proof that the damage amounts to fifty per cent. ; still he must abandon as soon as he is informed of the accident, without full proof of the amount of damage, if he would claim for a total loss. Hudson v. Harrison, 6 B. Moore, 288. It was more equal for both parties, that the plaintiff should abandon when he did, on the lllh of September, and exhibit the preliminary proof, rather than wait for evidence of the detention’s having continued ninety days.
The foregoing remarks proceed upon the supposition that the loss ceased to be total on the 14th of September, 1826, when the bond was filed ; but we insist that it continued total until the 9th of July, 1827, the date of the final decision. The bond was a substitute for the ship itself. 2 Wheat. (Appendix) 52, 53 ; Mulleti v. Shedden, 13 East, 304 ; Smart v. Wolf, 3 T. R. 341 ; The Alligator, 1 Gallison, 149; Mey v. Tunno, 2 Bay, 307 ; The Palmyra, 12 Wheat. 1. Clapp & Co., as bailees, had a right to retain possession of the vessel for their security ; as in cases of ransom, the master has a lien on the ship for the ransom money. Tranter v. Watson, 2 Ld. Raym. 931 ; Wilson v. Bird, 1 Ld. Raym 22; Hope v. Winter, Molloy, bk. 2, c. 6, § 13 ; Bainbridge v. Neilson, 10 East, 329 ; M'Iver v. Henderson, 4 Maule & Selw. 576 ; Loekyer v. Offley, 1 T. R. 252. If the bond was not a substitute for the vessel, then in case there had been a condemnation, and the vessel had also been lost by the perils of the seas on her voyage from Rio Janeiro to Boston, the defendants must have been liable for two total losses on the same vessel.
March 14 th, 1831.
Assuming that the loss continued total until the final decree in July 1827, and that the abandonment on September 11, 1826, was premature, there was an abandonment in December 1826, and again in April 1827 ; in other words, the communication made to the defendants on the 11th of September was a continuing notice of abandonment, available at both of those periods. Columbian Ins. Co. v. Catlett, 12 Wheat. 391; Cassedy v. Louisiana State Ins. Co. 18 Martin, 421.
Welsh, contra, contended that the defendants were discharged, 1. because they were not to be liable for a loss occasioned by illicit trade. The brig, having enemy’s goods on board, was lawfully taken by the Brazilian blockading squadron. It was not a hostile capture.
2. The plaintiff had no right to abandon on account of the blockade of the port of destination. Having enemy’s property on board and being bound to a blockaded port, the vessel should have gone to a neighbouring port, and there endeL the voyage, or waited a reasonable time for the blockade to be raised.
3. The intention of the contract was, that the plaintiff should not abandon until he had evidence of ninety days’ detention of the vessel. The abandonment of the 11th of September was therefore premature ; and being originally void, 'it could not operate afterwards as a continuing notice of abandonment. The communications between the parties in December 1826, were not a waiver on the part of the defendants, of the necessity of a new abandonment; on the contrary, they show that the defendants intended to stand upon their rights as then existing.

Opinion:
Shaw C. J.
delivered the opinion of the Court. This is an action upon a policy of insurance, in which the plaintiff claims to recover for a total loss. It is not the intention of the Court now to give a final and definitive opinion upon the whole case, the facts reported not being sufficiently full and complete for that purpose ; but having formed opinions upon several of the questions raised in the report and discussed in the argument, on those points the Court will now state the result.
The main question is upon the plaintiff's right to recover for a total loss. The policy was on the brig Leonidas, to and from all ports and places, during the term of twelve months from the 29th of December 1825, and until her arrival at a port of discharge in the United States. At the time this policy attached, the brig Leonidas was prosecuting a voyage from Buenos Ayres to China and back, the same having commenced the June preceding. On her return to the river La Plata in June 1826, war in the mean time having broken out between the governments of Brazil and Buenos Ayres, the port of Buenos Ayres was blockaded by a squadron of Brazilian vessels, by which the brig was captured on the 13th of June. The facts of the commencement of war and the establishment of a blockade of Buenos Ayres, were not known to the master of the Leonidas, till the time of her capture. The vessel was sent by the captors first to Monte Video, where the master and most of the crew were taken out, and thence,' under a prize crew, to Rio Janeiro, where she arrived about the 10th of July, and where prize proceedings were instituted by the captors. The mate of the vessel, Robert S. Pulsifer, having been left on board, soon after the arrival of the vessel at Rio Janeiro, on the 18th of July 1826, addressed a letter to the owner, stating the facts, which was received about the time of the notice of abandonment given by the plaintiff to the defendants. At the time of the capture the vessel, having been chartered for the China voyage by merchants, residents and citizens of Buenos Ayres, had on board a cargo, the property of those merchants. At Rio Janeiro, the vessel was proceeded against as prize of war, in the admiralty court, for the condemnation of the brig, as well as the cargo. A decree of restoration was obtained in the lower court, on February 5, 1827, from which an appeal was taken
by the captors, and a final decree of restoration in the court ot aPPeaL, was made July 9, 1827. By an interlocutory order, at the instance of the agents of the owner, the vessel was appraised and delivered on bond, conditioned to pay the amount of the appraised value in case of the condemnation of the vessel. Thereupon the vessel was delivered to the agents, who had given this bond, September 14, 1826. Notice of abandonment was given by the plaintiff to the defendants, September 11, 1826, and they refused to accept the abandonment. These are the material facts and dates.
Several clauses in the policy are particularly relied upon and give rise to some of the questions discussed. They are these.
" It is also agreed, that in case of capture or detention, the assured shall not have the right to abandon therefor, until proof is exhibited of condemnation, or of the continuance of the detention (by capture or other arrest), for at least ninety days." —" It is also agreed, that the assurers shall not be answerable for any charge, damage or loss, which may arise in consequence of seizure or detention for or on account of illicit or prohibited trade, or trade in articles contraband of war."
Several letters which passed between the parties, in December 1826, are referred to.
The vessel having been captured within the time covered by the insurance, several objections are taken to the plaintiff's right to recover.
First, that the loss did not happen by any one of the perils insured against, because the seizure and detention took place in consequence of illicit trade or trade in articles contraband of war, which were perils excepted from the risk by the terms of the policy. But there are no facts shown, upon which to found this objection. There is no intimation that the vessel sailed from or returned to Buenos Ayres, in violation of any of the laws of trade of that country ; and the objection is founded only upon the assumption that she was seized and detained for some supposed violation of the belligerent rights of Brazil. But this position cannot be maintained. When this vessel sailed from Buenos Ayres the preceding year, that country was in a state of peace with Brazil; when she sailed from China on her return voyage, it is found that the master had no knowledge of the commencement of the war, of course none of the blockade of his port of destination, and that he spoke nothing and received no such notice, until he was actually captured by the squadron. There was manifestly therefore no violation of the belligerent rights of Brazil, in proceeding towards a blockaded port, without actual or constructive notice of the blockade. As little ground is there in point of fact, for charging that the loss was occasioned by trading in articles contraband of war.
Had this vessel been detained for the purpose only of taking out the cargo, which as the property of citizens of Buenos Ayres the forces of Brazil had a right, by the general laws of war, to make prize of, as enemy's property, and had the brig only been sent to the nearest port under the dominion of Brazil, for the purpose of taking out such property, and then discharged, it might perhaps be successfully maintained, that under this policy, such a detention would not have been hostile, or one of the perils insured against, inasmuch as articles of merchandise, being enemy's property, bound to a blockaded port, are to many purposes deemed articles contraband of war. But the facts will not warrant us in considering the seizure of this vessel as a detention for the sole purpose of taking out and discharging the cargo as enemy's property. It is attended with all the characteristics of a hostile capture. After arriving at Monte Video, a port under the dominion of the government of the captors, the master is taken out and the vessel sent under a prize crew to Rio Janeiro, and there immediately libelled as prize ; and even after a decree of the court of first instance, for a restoration of the vessel, the captors, insisting with unwonted perseverance upon the condemnation of this vessel as prize, appeal from the decree to a higher court; and it is only upon a final decree of restoration by the appellate court that the owner obtains the discharge of his vessel from hostile detention. It seems impossible therefore not to consider this detention as a hostile capture. It seems very clear, as far as the facts appear, that there was no reasonable or probable cause for this capture and claim for condemna-ion, it being a well established right of the neutral ship-owner, that his vessel is not liable to condemnation or detention for proceeding towards a blockaded port, until an attempt to enter, after notice of the blockade. Here there having been no such notice, and there being no other ground to bring the case wifhin the excepted perils of illicit trade, or trade in articles contraband of war, and it appearing to have been manifestly a hostile capture, it is a loss within the risk taken by the policy.
This being a case not of actual, but of constructive total loss, the plaintiff cannot recover for a total loss, without a sufficient and valid abandonment ; and the defendants contend, that the notice of abandonment was given before the assured was entitled to give it, by the terms of the contract. This is founded upon the clause in the policy above cited, that in case of detention the assured shall not have a right to abandon therefor until proof is exhibited of the continuation of the detention for at least ninety days ; and here it is contended as a material fact to rebut the plaintiff's claim, that the detention had continued. but thirty-five days when Pulsifer's letter was written, and that the plaintiff could have had no later or other proof of detention, than that contained in that letter, at the time of giving notice of the abandonment. This clause in the policy, restraining the assured from abandoning for detention only, till after notice and proof of such detention having continued ninety days, is understood not to have been long in use, and has not often been the subject of judicial construction. In our view, the effect of it is, to retard and
postpone the right of abandonment for the term named, of ninety days , and as without such restraining stipulation, the assured cannot abandon until he has received intelligence of the capture, so under the clause, he cannot abandon until he has received intelligence and proof, that such detention has continued for the term of ninety days, and is in a condition to communicate such proof to the underwriter. As to the kind or degree of proof requisite to be furnished, we think it is not such as would be required to sustain an action in a court of justice, but such as is usually produced to underwriters as preliminary proof of loss ; as the protest of the master, a letter from an officer or agent having charge of the vessel, or any such evidence as will satisfy the clause in the policy, requiring notice and proof of loss sixty days before the commencement of an action.
Taking this to be the true construction, it is very clear that at the time the notice of abandonment was given, September 11, 1826, the plaintiff had no proof and no intelligence later than the 18th of July, and therefore could give the defendants no proof that the detention had continued ninety days ; and of course that notice did not operate as a valid abandonment, so as to entitle the plaintiff at that time to recover as for a total loss.
But it is then contended by the plaintiff that this notice, although in fact too soon to operate as a valid abandonment of itself, still was a continuing notice ; that as it was never countermanded, as the plaintiff, with the knowledge of the defendants, continued to act upon it from time to time as a subsisting notice, it must be deemed to be a continuing notice ; and that as the detention in fact continued long beyond the period of ninety days, and intelligence and proof of it were received here and communicated to the underwriters, when this continuing notice of a determination to abandon and the notice and proof of detention beyond the period of ninety days concurred, the abandonment became complete ; and the Court are strongly .inclined to this opinion. The notice expressed the intention and determination of the plaintiff to abandon, on account of the alleged capture and detention which were specified ; the contract fixed the time at which the assured could notify with effect. This notice not having been countermanded, the assured continuing to act upon it with the knowledge of the underwriters, until the time arrived when by proof of the continuance of the detention the assured could notify his intention with effect, we think this was in effect a renewal, revival and continuance of such notice, and sufficient to give effect to the abandonment, in the same manner as if a new notice had been given, after intelligence and proof received of detention ninety days. Columbian Ins. Co v. Catlett, 12 Wheat. 391.
It was stated by the plaintiff's counsel in the course of the argument, that the plaintiff, by his acts and communications in several different instances, after the notice of September 11, 1826, and after receipt of intelligence that the vessel had been detained more than ninety days and before the commencement of the suit, did give the defendants proof of the detention of the vessel. On looking into the report,, the Court have not been able to perceive any admission or statement of the fact, that such proof was communicated by the plaintiff to the defendants, so as to give to the plaintiff's continuing notice the effect of a valid abandonment. But as there is nothing to show that such proof was not given, and as it appears highly probable from the circumstances, that in fact it was given, or that evidence exists from which it may be inferred, the Court are of opinion, that unless the report can be so amended by agreement, as to determine that fact one way or the other, the cause should go to a jury for the purpose of determining it, and that a new trial must be had for that purpose.
There is one other point which it may be important to consider in the present stage of the cause, and that is, under the circumstances stated, to what period of time shall the detention occasioned by the capture be deemed to continue. The Court are all of opinion, that the hostile detention could not be considered as determined by the delivery of the vessel on bail, to the agents at Rio Janeiro, in the course of the proceedings against her as prize. If the vessel was in fact put into the possession of the owner, it was in consequence of an obligation having been entered into, in the event of the condemnation of the vessel, to return the vessel in specie, or to repay the full value. The jurisdiction of the prize court stands unaffected by such a delivery on bail; the security is substituted for the property itself to nearly every purpose, if not to all. The assured is in the nature of a purchaser for full value, and not restored to the free use and enjoyment of his property, under his former title. Considering therefore that hostile capture and detention, though without condemnation, is considered by the genera, law of insurance as a constructive total loss ; that under the terms of this policy it is so to be regarded if it continues for the term of ninety days, the continuing of the prize proceedings by the captors' insisting upon the condemnation of the vessel, must be legally deemed a continuation of such hostile detention, notwithstanding the delivery to the claimants' agents on bail, until the final and effective decree of restoration made in July 1827, by the appellate court.
March 20th 1882
JYew trial granted.
The cause was tried a second time, when the facts before stated were again given in evidence. It further appeared, that when the brig arrived in Boston on December 1, 1826, the plaintiff received a letter from Clapp & Co., dated September 29, 1826, in which they state that they have thought it most advisable to clear the brig by giving bond ; that they are trying to cancel their bond ; that they fear it will take a long time to get through with the process of law, and that the former master of the brig has thought it advisable to remain there till the business can be brought to a close. This letter was immediately communicated to the defendants.
It appeared that the plaintiff, on receiving information that Clapp & Co. were continued agents for the claimants, after being appointed agents for the captors, immediately gave notice of this fact to the defendants, and inquired of them if it was their wish that he should withdraw the agency from Clapp & Co., and upon their reply that the agents for the captors were not fit persons to be agents for the claimants, the plaintiff wrote to Clapp & Co. under date of May 20 and June 14, 1827, requesting them to transfer the agency to another house.
According as the opinion of the Court should be, the plaintiff was to be nonsuited, or the defendants defaulted, and judgment entered for a total or partial loss, for an amount to be determined by an assessor.
J. Pickering and W. Phillips said it appeared that sufficient proof of the continuance of the detention for ninety days, was exhibited to the defendants on the 1st of December 1826, the letter of Clapp & Co. of September 29, 1826, having then been shown to them. The defendants in effect waiyed any objection to the kind of document exhibited, contesting the loss solely on the ground that the abandonment was premature- Ocean Ins. Co. v. Francis, 2 Wendell, 64.
The defendants cannot make the objection that the same persons were agents of the captors and of the plaintiff, for the abandonment being valid, those persons were the agents of the defendants and not of the plaintiff. Idle v. Roy. Exch. Ass. Co. 3 B. Moore, 115, 150.
The bond given in the prize court is not to be taken as the measure of damages. If it were, the underwriters would be . affected by the fluctuation of the market. The bond was res inter alios, and was taken without any reference to insurance. The valuation in the policy is the real value as between the parties to this action.
S. Hubbard for the defendants. The abandonment on the 11th of September was invalid, because the plaintiff did not communicate to the defendants the whole of the letter received from the mate. The part not communicated contained facts, the knowledge of which was important to the defendants, in determining whether they should accept or refuse the abandonment.
Clapp & Co. being agents of the captors, as well as of the plaintiff, and having given their own bond on an appraisal of the vessel, we contend that she was released by agreement between the captors and assured. And this was in August within the ninety days. As the same persons were agents of the captors and of the plaintiff, all peril as to a delivery was over, and the plaintiff had legal constructive possession in August though an actual delivery was not made until the 14th of September. Marshall v. Delaware Ins. Co. 4 Cranch, 202.
So too the assured and the captors came to an agreement by which the utmost amount of the loss,was fixed, the bond being intended to cover that amount. The master had elected to take the vessel within the ninety days, and no more was at risk than the amount of this bond, and there.was no total loss. The Betsey, 5 Rob. Adm. Rep. 295 ; Humphreys v. Union Ins. Co 3 Mason, 429.
March 30th 1832
Phillips, to the point that it was not necessary to communicate to the lefendants the whole of the mate's letter, the extract being sufficient to put them upon inquiry, cited Pitney v. Learned, 1 Paige, 461 ; M'Intyre v. Bowne, 1 Johns. R. 240 ; Vos v. Robinson, 9 Johns. R. 192 ; Francis v. Ocean Ins. Co. 6 Cowen, 404.
Shaw C. J.
delivered the opinion of the Court. This cause again comes before the Court, upon a statement of facts somewhat more full and complete but in other respects not varying essentially from the former statement. The proof which was then wanting is now furnished. It appears that a letter written by the agents of the concerned for the vessel at Rio Janeiro, as late as the 29th of September, after the vessel had been detained much beyond ninety days, describing the proceedings in the court of admiralty as yet pending and undecided, was received here December 1st, and immediately communicated by the plaintiff to the defendants, as substantiating his claim to a total loss. That the defendants understood the plaintiff as still persisting in his cláim for a total loss, and relying upon his former notice of abandonment, is manifested by their reiterated refusal to accept it. The plaintiff having thus given notice of abandonment, operating as a good and valid prospective and continuing notice, and so considered by the company, and having exhibited proof of the continuance of a hostile detention for a period exceeding ninety days, the abandonment became complete and effectual, and thereupon the assured, according to the established rules of law, modified by the particular terms of this policy, became entitled to recover as for a constructive total loss. A letter under such circumstances must be considered as good preliminary proof, being that species of probable evidence upon which mercantile transactions usually proceed. Lawrence v. Ocean Ins. Co. 11 Johns. R. 260.
The Court have again been called upon to consider the question heretofore discussed and upon which an opinion was expressed, namely, whether the vessel could be considered as under detention within the meaning of the policy, after she had been delivered to the agents of the assured on bail. The Court are confirmed in their opinion, that such a delivery on bail is no determination of the hostile detention. The proceeding is merely interlocutory, adopted for the convenience of litigating parties to avoid expense, and the vessel may be delivered to either party at the discretion of the court oí prize, before whom the proceedings are pending. It determines nothing upon the question of property, the only material question, the decision of which determines the regularity of the capture, and shows whether the vessel was or was not liable to capture and condemnation. This can only be determined by a decree of restoration or condemnation ; this only decides the right of property. Ogden v. Columbian Ins. Co. 10 Johns. R. 273.
It seems to be well settled, that in the admiralty, bonds are regarded not as a mere personal security to the party claiming, but as pledges and substitutes for the vessel, and liable to the adjudication of the court, upon all points regularly before it. So if the bond be to the captors and afterwards the vessel be condemned as a droit of admiralty, or to other parties claiming, the bond will be deemed security for the performance of such a decree. The Nied Elwin, 1 Dodson, 50. So it is held here, that where a stipulation is taken for property subject to legal process, the stipulation is deemed a substitute for the thing itself. The Palmyra, 12 Wheat. 1. Property thus delivered is still regarded as subject to the jurisdiction and order of the court, and the property itself or the proceeds may be brought in for further adjudication. Smart v. Wolff, 3 T. R. 323. As the court of admiralty exercises a jurisdiction according to the principles and forms of the civil law, in the absence of positive proof to the contrary, it is reasonable to presume that the courts of Brazil, acting in pursuance of the principles and practice of the civil law, adopt the same rules. If that be so, this vessel, notwithstanding the delivery on bail, was still subject to the order and control of the court of prize ; and although after the vessel had actually sailed from that country, they could not have had the physical control, or power to enforce any specific decree, yet the legal authority would have remained ; and until the vessel actually departed from the ports of that country, the prize court retained a legal control over the vessel, with the physical power to enforce its mandates. This period continued for more than three months from the time of the capture. ,
But we do not place the decision principally upon this ground, being of opinion that after a hostile capture and detention and the institution of prize proceedings, the detention continues, until the determination of those proceedings, either by a voluntary discontinuance and a voluntary delivery of the vessel to the owner, unembarrassed by vexatious restraints, or a decree of restoration, which effectually revests the property in the owner, and places him in the same situation as before the capture.
An analogous case is, where a vessel having been plundered, seized, libelled upon a groundless claim, and delivered to the master, upon his depositing a considerable sum to abide the event of the adverse claim, it was held that notwithstanding the delivery of the vessel to the master, the assured had a right to abandon and recover for a total loss. M'Iver v Henderson, 4 Maule & Selw. 576.
But is it so clear, as contended for by the defendants, that the vessel was delivered to the owner on bail ? This depends upon the question, whether there was a good cause of abandonment, and whether the abandonment was valid. The claim to obtain the property on bail, was made by the agents, Clapp & Co., who had been appointed by the master, for the benefit of whom it might concern. If the abandonment was valid, on the ground of capture and detention, then the abandonment related back to the time of the capture, the master and the agents by him appointed were the agents of the defendants, the vessel was delivered to them as such agents, and came home under the direction of the master, as the property of the defendants. General Interest Insurance Co. v. Ruggles, 12 Wheat. 414. Had the plaintiff waived his abandonment and agreed to receive his vessel again, and affirmed the act of the agents in procuring the delivery of the vessel on bail, and that of the master in bringing the vessel home, as his act and done for his account, then the result would have been manifestly different; and in case of an after condemnation and a payment of the bond, the loss would have been in its nature a partial loss, and the amount paid on the bond, the measure of the plaintiff's indemnity. But as this was not done, their acts must ^e deemed to have been for the plaintiff or for the defendants, as they were the agents of the one or the other ; and this again depends upon the question, whether there was a valid abandonment. And if there was a good right to abandon upon other grounds, this delivery of the vessel to the agents, and her being brought home by the master, was no waiver of it.
One or two other points were made by the counsel for the defendants.
One was, that in the notice of abandonment, containing an extract from Pulsifer's letter, there was a part concealed, which would have enabled the defendants to judge better of the expediency of accepting the abandonment. We think there is little weight in this objection. The main object was to communicate notice of the capture and detention, and of the intention of the assured to abandon. The portion of Pulsifer's letter communicated was described as an extract, implying that it did not contain the whole ; if the defendants wished for the inspection of the whole, they should have called for it.
Another objection is, that Clapp & Co., the agents at Rio, were at the same time the agents for the captors ; and this leads to a suspicion of some fraud. If this were relied on as a fraud, it should have been tried. But as soon as the plaintiff heard of it, he communicated it to the defendants ; nor is there any intimation that it was done with his knowledge or approbation ; on the contrary, as soon as it was known, he took measures to counteract it. But another answer is suggested by the consideration before stated, that after capture and restraint, the master and the agents appointed by him, were the agents of the underwriters, and not of the assured.
As to the amount of damages. This is a valued policy. If the plaintiff is entitled to recover for a total loss, he must recover according to the agreed value. This necessarily re-. suits from this species of contract
Upon the foregoing opinion being given, the case was referred to an assessor to adjust the loss. The assessor reported that the excess of the premium over 2-| per ent should be returned. • To this part of the report the defendants excepted, and the question xvas presented to the Court, whether the defendants had a right to retain the premium for any time after the expiration of six months from the commencement of the risk.
March 31*1, 1834.
March 22d,
Hubbard, for the defendants, contended that the premium should continue to run from the 13th of June to the 11th of September, and perhaps until December, when the abandonment became effectual. He cited Law v. Goddard, 12 Mass. R. 112.
J. Pickering and W. Phillips, contra, referred to Stevenson v. Snow, 3 Burr. 1237 ; Gale v. Machell, 2 Marsh, on Ins. (3d edit.) 667 ; Long v. Allen, ibid. 668 ; Meyer v. Gregson, ibid. 666 ; Tyrie v. Fletcher, Cowp. 666 ; Pollock v. Donaldson, 3 Dallas, 510.
Shaw C. J.
delivered the opinion of the Court. The introduction of new clauses into policies, naturally leads to new questions in the law of insurance. The stipulation, in the policy, in the present case, that no abandonment should be made on account of hostile capture or detention, until after proof of such detention having continued three months, is one of this character, and gives rise to the question presented by the report of the assessor, in his computation of the premium. The peculiarity of the policy in this case is, that the insurance was on time, for one year, and to continue for a further time, until the vessel's arrival, if at sea at the expiration of the year, warranting a premium for at least six months. The vessel being seized and detained within the six months, the question is, whether the premium is to continue for any period beyond the six months, and if so, to what time it is to be computed.
It is obvious, that as the premium is expressly apportioned on time, it may be measured by the continuance of the risk, and must cease with it.
It may readily be admitted, that to some purposes the vessel may be considered | as the property .'of the assured at the risk of the underwriters, during the ninety days, which, by the terms of the policy, must elapse after furnishing proof of the detention, and before the assured have the right to abandon. Thus, if there had been a new damage or loss, by ®re or 0{ber peril insured against, and the hostile detention should actually cease before the expiration of the ninety days; or, if the assured should elect not to abandon upon the original ground of capture and detention, and loss should arise in the mean time from some other peril, it seems quite clear, that in either of these cases the underwriters would be responsible for such new loss. And, at first view, it seemed reasonable to hold, that if in this, or any other way, the risk could continue during the ninety days, the premium should also continue.
But upon further consideration the Court are all of opinion, that the premium must stop at the time of the hostile detention, and that the computation of the assessor in this respect was correct.
We must consider, not what "would have been the mode of adjustment in other contingencies, but how the loss arising from this particular cause is to be adjusted, upon the events as they have happened. The capture and detention took place in June, information of the fact was received here in September, and notice of an intention to abandon was then given; but at that time, as the assured could not give proof that the vessel had been detained ninety days, by the terms of the policy he had no right to abandon, and his notice could only operate prospectively. The effect therefore is to postpone the right of abandonment, for the cause of that detention, ninety days beyond the time limited by law where there is no such stipulation. But it has already been decided, that this notice, not countermanded, but acted upon as soon as the assured was in a condition to act upon it, was a continuing notice ; and as proof was received here and offered to the underwriters in December, that the ship had been detained, actually or constructively, for more than ninety days, at that time, the abandonment took effect, and vested in the assured the right to recover for a total loss by capture and detention. The right of abandonment, which would have existed at the moment of receiving information of the capture, but for the clause in the policy, was only postponed ; but when this detention had continued during the stipulated period, the right became perfect, and was exercised, and then the assured became entitied to recover in the same way and upon the same grounds as he would have been upon an immediate abandonment, under a policy in common form. The result shows that there was a total loss by the capture and detention on the 11th of June, and the abandonment refers to that cause, and relates to and takes effect from that time. The consequence is, that the underwriters, by force of the abandonment, became owners of the vessel from that time, paying all expenses and being entitled to all earnings, salvage and other benefits. If she.was discharged on bond and came home, it was for their benefit and at their own risk. It would therefore be inconsistent with the principles of abandonment, to require the former owner, upon a policy on time, to pay a premium on a vessel belonging to the underwriters, sailing for their benefit, and at their own risk, as owners.
It may seem to be a hardship, that the owner should have ninety days to speculate upon events, and determine whether he will or will not abandon, and thereby in effect to elect whether he will keep the vessel himself or relinquish her to the underwriters, according as his own interest may dictate. But this is, an advantage which the underwriters give him, and which results from his contract. But it is further to be considered, that the stipulation in question is introduced for the benefit of the underwriters, and to restrain the right of the assured to abandon upon the first notice of a hostile detention, by embargo or otherwise, which may be only temporary, and from which no serious consequences may result. It requires the assured to wait till it shall satisfactorily appear, by a detention of considerable length, that the enterprise is likely to be destroyed. But if such detention does not continue, the right to abandon is taken away, the underwriters are saved from their liability for a total loss, and the stipulation operates in fact to their benefit.
But where the detention does continue for the stipulated time, and the temporary detention assumes the aspect of hostile capture, by mutual agreement the right of abandonment takes effect, and when made it is to have the same effect as if made in the ordinary way where there is no such stipulation. There must he a good subsisting and continuing cause ; die abandonment relates to that cause ; and when the right is establi'shed and exercised, it connects the abandonment with the cause of loss, and transfers the property to the underwriters as and from that time. It is the same thing in effect as if the detention or other cause of abandonment had happened in á remote part of the world, so that an unusual time had elapsed after the happening of the event, and before notice of abandonment could be given. But if notice be given seasonably after the information is received, the intermediate lapse of time makes no difference as to the effect of the abandonment in terminating the risk, ending the adventure of the assured, and transferring the property with all its incidents to the underwriters.
Exceptions overruled and judgment according to the assessor's report.
See Naylor v. Naylor, 9 Barn. & Cressw. 718 ; Harrat v. Wise, ibid. 712 Dagleish v. Hodgson, 7 Bingh. 495 ; Sperry v. Delaware Ins. Co. 2 Wash. C C. R. 243.