Court Opinion

ID: 5472515
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:43:19.441488+00
Date Added: 2024-06-11T08:33:22.062951
License: Public Domain

[Kent, Ch. J.
You need not argue on that point The reason appears to be too fanciful to be allowed anj weight in the cause.]
*319Again, how can it be said that the contract of assurance is dissolved by the embargo i. The defendants have received their full premium; and the policy must be .considered as valid and subsisting, as to every purpose and peril, except sailing during an embargo. The in'.sured does not undertake to sail at all events, but only in case they can lawfully depart; and the insurers engage to indemnify the insured, if they cannot'lawfully pro-ceed on the voyage insured, whereby it becomes defeated.
2. In the case of Abbot v. Broome † it was decided, that after an abandonment and refusal, the insured might sell the vessel, at public auction, for the benefit of the insurer, without being considered as waiving his right under the abandonment. The vessel was not sold until after six months, and a month’s notice of the intended sale. The plaintiffs being owners of the cargo as well as the vessel, it became necessary to unload the cargo, in order to sell the vessel. It may, perhaps, be said, that the freight of the goods ought to have been tendered to the defendants. But if the goods had belonged to third persons, instead of the plaintiffs, a tender to the insurers would not have discharged the shippers. The plaintiffs were the only persons to whom a tender of freight could have been made.
It cannot be said that the vessel violated the law by sailing, or that the plaintiffs knew of the law at the time of her sailing; for there is no evidence of that fact.
Hoffman and Emmet, contra.
After the argument of yesterday, it is unnecessary to say much on the first point. The voyage having commenced after the act lay -' *320ing an embargo had passed, and a knowledge of it had reached Neru-Tork, the sailing was illegal, and the insurers are not answerable. It makes no difference whether the plaintiffs knew of the act; for, in contempl'ition of law, it takes effect from the day it was passed, and every citizen is presumed to have knowledge of it. But admitting that the act could not have effect, until known, there is evidence that the pilot and master knew of the embargo, and the owner must be bound by the act of the pilot or master, as his agent, and whose duty it was, having heard of the law being in force, to ascertain the truth of the report. The attempt to sail, after thin information, was at his peril. Suppose the vessel, having evaded the embargo, had been, afterwards, captured, would the defendants have been liable, when the voyage had illegally commenced?* If the evasion of , „ , / , , - . , the embargo would be a good defence in such a case, Q , * - • i it is equally so m the present case.
Judge Washington, in the case of Odlin v. The Pennsylvania Insurance Company, says, “ that by a violation of the embargo, the insured would lose the benefit of the policy, as much as by a breach of an express warrant'-.” There is no hardship in this; it encourages ■ obedience to the law, at the same time that it discourages any attempt to violate it. According to principles of sound policy, as well as justice, therefore, the plaintiffs ought not to be allowed to recover.
2. The acts of the plaintiffs amount to a waiver of the abandonment. The party electing to abandon, must abide by his election, until it is waived by mutual consent. By the abandonment, the rights of the parties are .fixed; and the property in the vessel is transferred to the insurers. The defendants then became entitled to the freight. Whether the insurer accepts the abandonment or not, if the insured has a right to abandon, the insurer becomes the owner of the vessel, from the time of abandonment, and is entitled to all her earnings, *321The insured can do no act to impair the rights of the . . . , insurer.* If the insured does any act inconsistent with the abandonment, or which impairs the rights of the insurer, it amounts to a waiver of the abandonment. By taking out and selling the cargo, the plaintiffs destroyed the lien which the defendants would have had for the freight. By a voluntary delivery of the goods to the shippers, the claim for freight is relinquished. The owners of the cargo would not be entitled to demand their goods and break up the voyage, without first paying the freight.† The plaintiffs entered into an agreement for the sale of the salt, thirty days before they had any right to abandon, according to the terms of the policy, and it was delivered, afterwards, pursuant to that agreement. This was also, at least thirty days before their letter of the 25th July, in which they speak of the necessity of selling the vessel. That agreement is a very important fact, to show that the plaintiffs acted as owners and principals, and not agents.
Again, the sale of the vessel was also a waiver of the abandonment. The defendants did not consent to the sale. Their answer is a refusal of such consent; and they express their willingness to pay whatever expense may be requisite for the preservation of the vessel, for the benefit of all the concerned. The power of .the insured to sell after an abandonment, ought to be restrained and limited as much as possible, since the exercise of it may lead to great fraud and injustice. The insured, after an abandonment, becomes an agent from necessity, and can do nothing but what is absolutely necessary. He can sell only, when by keeping the property he will be involved in expense. Every act of the insured, without necessity, must be considered as an act of ownership, and waiver of the abandonment. In the present case, there was no occasion or necessity for the sale; and the insurers being on the spot, it was.the duty of the insured to consult them, and to follow their directions. They *322were willing to contribute to the expense of keeping the , r . , . 1 . % ° . property ; but refused their consent to its sale. As agents, therefore, the plaintiffs acted without necessity, an<^ without authority. The sale must be considered as the act of owners, not of agents. If the embargo was. temporary, as has been contended, the plaintiffs ought not to have sold the vessel, as they thereby prevented the defendants from proceeding on the voyage, after the embargo was removed.
In the case of Abbot v. Broome, the insurers were silent and passive. The vessel was condemned in the West Indies, as not worth the expense of repairs, and the voyage was at an end. The circumstances of that case are materially different from those of the present. Here there could be no implied assent or authority to sell, as both parties were on the spot, and the defendants refused their consent.
J. Badcliff, in reply.
It is unnecessary to add any thing further on the right of the insured to abandon, in the case of a domestic embargo. Whether this was an embargo, or a prohibition of trade, or whether the act was unconstitutional and void, can make no difference j for the plaintiffs, in either case, are entitled to recover,
A person acting without notice of a law, cannot be-punished for acting contrary to that law. This would be against the first principles of justice. A knowledge of the law by the plaintiffs, ought to have been clearly" shown. The pilot does not say that he communicated what he had heard from another pilot, to the plaintiffs, or even to the master. Such a mere rumour, or hearsay, is not legal notice. The act contained many exceptions ;• and could the pilot know the nature and extent of these exceptions, or whether the act applied to vessels which had previously obtained regular clearances ?
It does not appear that the agreement for the sale of the salt was absolute and unconditional. It may have *323keen made, cum onere. It was entered into from an expectation that the abandonment would not be accepted. The rights of the defendants could, not be prejudiced; for there was no delivery until after the abandonment; and the defendants had it in their power, by accepting the abandonment, to enforce and secure all their rights under it.
The defendants refused to accept of the abandonment. Were the plaintiffs, then, bound to keep the property for an indefinite period of time ? That would prove extremely inconvenient and injurious. It would, in a great degree, defeat the object of the contract of insurance. Being an agent for all concerned, the most that can be required of the insured is, that he acts bona fide, and. does what a reasonable man would do, under similar circumstances.
The case of Abbot v. Broome has settled the point, that the insured, after an abandonment, may sell the property, and account to the insurers for the nett proceeds.
Thompson, J.
delivered the opinion of the court. The judgment pronounced in the case of M'Bride v. The Marine Insurance Company, decides, that a detention, under the authority of the United States, by virtue of the act laying an embargo, is a peril within the policy, and authorized an abandonment; this disposes of one of the questions made in this case. Two other objections, however, have been urged against the plaintiffs’ right to recover for a total loss :
1. That the voyage was begun with a knowledge of its being illegal, and prohibited.
2. That the abandonment was waived by a sale of the ship and cargo.
These objections, I think, cannot prevail. The policy was effected the 18th of December, 1807, on the vessel, at and from New- York to Havanna. The risk had ac*324cordingly commenced before the passing of the act, and the defendants’ right to the premium had become fixed» The rumour, on the morning the ship sailed, of an embargo having taken place, as stated by the pilot, was too vague and uncertain to be obligatory upon the plaintiffs, so as to subject them to the consequences of an intentional violation of the embargo, which would have been a criminal act. But another conclusive answer to this objection is, that the plaintiffs are not chargeable with any information which the pilot might have on this subject. He was not such an agent as to make his acts the acts of the assured. He was only-employed for the specific purpose of conducting the vessel out to sea, and had no control or direction as to the time of sailing. This belonged to the master or owners $ and there is no evidence of any knowledge of the embargo being brought home to either of them.
2. The agency which the assured took in selling the ship, ought not to prejudice their claim on the underwriters. The plaintiffs had a right to abandon; and the law will charge the defendants with a knowledge of that right; they, therefore, ought to have accepted the abandonment. By an abandonment, the assured yields up to the underwriters all his right, title, and interest in the subject; it operates, in judgment of law, as a transfer of the property ; (Marsh. 509.) and puts the insurer in the place of the assured. (2 Caines, 284.) If the under writer will not accept the subject, there is no mode of compelling him to receive it. The assured then, by operation of law, becomes actually possessed of the property of the underwriters. He is necessarily left to act, quasi agent or trustee, without any instructions from his principal. What is it his duty, under such circumstances, to do i Would it be proper and discreet in him, to neglect and abandon the property altogether, and .leave it to waste and perish ? If not, he must, from the nature of his situation, have an implied authority, to do what he *325thinks most for the interest of the concerned. To consider the mere sale of the subject by the assured, for the avowed benefit of the underwriter, after a refusal to accept a rightful abandonment, a waiver of such abandonmcnt would, it appears to me, be against the principles of justice, and sound commercial policy. If this should be considered the rule of law, it must be general, and applicable to all cases; and if the subject abandoned was of a perishable nature, a total loss and destruction of the property must necessarily be the consequence. The assured being made trustee, ex necessitate,. if he executes his trust with fidelity, it is all the law requires of him. And whatever he does ought to be considered as done in the character which the law has imposed upon him, unless his conduct shows clearly, that he intended to act for his own benefit, and to waive his abandonment. The quo animo is the criterion by which his acts ought to be tested. There is nothing appearing in this case to warrant the inference, that the plaintiffs intended to act in any other character than as agents, or trustees, for the defendants.
The circumstances against the assured, in the case of Abbot v. Broome, (1 Caines, 292.) and which were held not to be a waiver of the abandonment, were much stronger than in this. In that case, the great object of the defendant’s counsel was to show, that the sale and purchase of the vessel was for the benefit of the assured ; and it seemed to be admitted, that unless this was shown, the sale would be no waiver of the abandonment. In the case before us, there is no one circumstance which looks to the conclusion, that the plaintiffs were acting for their own benefit. After the abandonment, they apprized the defendants, that the situation of the ship was such as to require something to be done with her, and proposed selling her for the benefit of those interested, without prejudice to the rights of either. On the defendants’ declining to accede to this proposition, they determined to sell the *326ship at public auction, of which they gave the defendants notice, sent them a copy of the advertisement, and particularly requested their attendance, to prevent the property being sold at an under price. The purchaser was a person in the employment of the defendants. The auctioneer called at their office for the purchase-money. The president of the company made out a check for the amount; but, on reflection, said he had rather, for certain reasons, that the purchaser would pay the money himself. All this certainly looks more like a purchase for the account and benefit of the defendants than the plaintiffs. The plaintiffs’ letter, of the 26th of July, 1808, by a fair construction, contains no proposition, except to sell the ship for the benefit of whoever it might concern. And if the defendants wished any other measures taken for her preservation, it was incumbent on them, at least to make some specific proposition. The plaintiffs had confidence in their legal right to abandon; and, relying on that, they were not bound to make advances for the preservation of the ship, until the result of a lawsuit should enforce their claim upon the underwriters. Under the existing state of things, the selling of the vessel showed no disposition in the assured, either to sacrifice the property, or to benefit themselves. They appear to have acted in good faith, as agents or trustees for the defendants, without any intention of waiving their abandonment. I do not see on what possible ground it can be pretended, that the plaintiffs were bound to keep the cargo. This was a distinct subject, with which the defendants, from any thing that appears, had no concern. The voyage being broken up, and ship abandoned, the owners of the cargo, whether they were the plaintiffs or other persons, would not be bound to leave that to perish. Had the underwriters on the ship accepted the abandonment, and been entitled to any lien on the cargo, they could have had the benefit of *327that lien, for the cargo remained on board, for á considerable time after the abandonment.
I am, therefore, of opinion, that the plaintiffs are •entitled to recover, as for a total loss»
Judgment for the plaintiffs.