Court Opinion

ID: 3618721
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:01:08.030724+00
Date Added: 2024-06-11T14:07:35.555204
License: Public Domain

Freight, which is the compensation which the owner of the vessel is to receive for carrying the goods, is, by the law of England, and of this state, a distinct subject of insurance. In adjusting the indemnity under contracts for insurance, a diversity has arisen between the courts of the two countries. In England freight is considered so far an incident of the ownership of the vessel that where the latter is lost, or so much damaged as to warrant an abandonment in the course of the voyage, the insurers are entitled upon abandonment to the benefit of the contract for carrying the goods, and if freight is subsequently earned for carrying property taken on board at the commencement of the voyage, they can claim it as an incidental advantage acquired by them by means of the abandonment. As where a vessel has been stranded, and in that state abandoned to the insurers, and is afterwards gotten off, repaired and sent on her voyage, and delivers the cargo, thus earning the *Page 253 
freight, it belongs to the underwriters on the ship and not to the insurers of freight. (Case v. Davidson, 5 Maule  Selw. 79; affirmed in the Exchequer Chamber, S.C. 2 Brod.  Bing. 379.) The rule has been settled otherwise in this country, where it is held that the insurers of the vessel are entitled only to what the ship may actually earn subsequently to the abandonment. (TheUnited Insurance Company v. Lenox, 1 John. Ca. 377, and note in the edition of 1846 — affirmed in error, 2d id. 443; 3 Kent's Com. 333.) The rule thus established has been subsequently adhered to in this and in other states, as will be seen by the foregoing references. Upon the loss and abandonment of the ship in this case, the underwriters upon it acquired title to nothing except the debris of the wrecked vessel. If the incipient freight, or any part of it, has been saved by the acts of the owners of the cargo, or their transferees, the insurers of cargo, by their receiving it at the place where the vessel went ashore, or by its being taken to its destination in another vessel, the abandonees of the schooner have no concern with it, and the abandonees of freight are deprived of nothing. It is argued that the defendant ought not to pay the full sum insured because thepro rata amount which the owner of the cargo ought to pay would have been saved to Bruce, as the ship owner, if he had not abandoned the vessel. This might have been secured if the abandonees of the vessel fully represented Bruce in all his rights concerning it; but we have seen that they did not, for they had no concern with the incipient freight, and, as the vessel did not contribute to the earning of freight after the abandonment, if any was earned, these abandonees obtained no interest in the freight whatever.
Nor did the abandonment of the cargo to the underwriters upon it affect the present question. They took the part of the wheat which was saved subject to any claims upon it for pro rata
freight, if there were any such claims. (United Ins. Co. v.Lenox, supra — per RADCLIFF. J., at p. 379.) It is said that the abandonment of cargo by Bruce *Page 254 
was not one of the things which the defendants insured against, which is very true; but the winds and waves which caused the vessel to go ashore, and which produced the injury to the cargo and justified its abandonment, and thus prevented the earning of freight was the very peril which the defendants undertook to indemnify Bruce against. It was the occurrence of the storm which gave rise to the state of things which authorized Bruce to abandon all the several subjects insured to the respective insurers. These insurers, by force of the abandonment, took whatever property or interest remained in the subjects insured, but they did not otherwise represent Bruce. For example, the insurers upon the vessel acquired title to the broken planks, spars and iron which could be collected from the wreck. The insurers upon cargo took title to the damaged wheat subject to the payment of any freight which under the circumstances it ought to bear, and the defendants as insurers of freight succeeded to all claims for freight which Bruce would have had against the owners and the cargo, if it had been owned by another person.
It is further urged that the loss of freight was not so great as to entitle Bruce to abandon it to the defendant. The judge has, however, found that the abandonment was accepted. This divested Bruce of the right to proportionate freight, and conferred that right, if it existed in any one, upon the defendant. But I think there was a just occasion for abandonment. The vessel had become a total wreck at an intermediate point which was not a port, and vessel, cargo and the right to freight were prima facie lost. No freight had been earned, and the vessel which was to have earned it was broken to pieces. If any could have ever been earned it would not have been in any natural, but in an exceptional, way, as by the owner of the cargo accepting it where it then was, or by the abandonee of the ship getting it to port in some other way. An abandonment is said to be justifiable for anything which, in the course of the voyage, constitutes at that time a total loss. *Page 255 
If anything subsequently occurs, as a recapture in the case of a vessel captured, or getting a cargo to port in another vessel, it is the good fortune of the underwriters, but does not affect the legality of the abandonment. (Holdsworth v. Wise, 7 Barn. 
Cress. 794; 14 Eng. C.L. 129.)
I conclude, therefore, that the judgment of the superior court of Buffalo was right.