In marine insurance, the general rule is firmly established in
this Court that the insurers are not liable upon memorandum
articles except in case of actual total loss, and that there can be
no actual total loss when a cargo of such articles has arrived in
whole or in part, in specie at the port of destination, but only
when it is physically destroyed, or its value extinguished by a
loss of identity.
In this case, the entire cargo was warranted by the memorandum
clause free from average unless general, and by a rider, free from
particular average, but liable for absolute total loss of a part.
Under these provisions, the insurers were not liable for a
constructive total loss, but only for an actual total loss of the
whole or of a distinct part.
The carrying vessel was stranded, and, having been got off in a
shattered condition, was subsequently condemned and sold on libels
for salvage; most of the cargo was saved, and reached the port of
destination in specie, a portion damaged, and a substantial part
wholly uninjured.
Held that the owner could not recover
for a constructive total loss, nor for an actual total loss of the
whole.
No right to abandon existed, and the insurers explicitly refused
to accept
Page 179 U. S. 2
the abandonment tendered. If the cargo saved was carried from
the port of distress to the port of destination by the insurers,
which was denied, this was no more than, by the terms of the
policy, they had the right to do without prejudice, and could not
be held to amount to an acceptance. The circuit court did not err
in declining to leave the question of actual total loss of the
entire cargo, or the question of acceptance, to the jury.
This was an action at law brought in the Superior Court of
Massachusetts for the County of Suffolk, and thence removed into
the Circuit Court of the United States for the District of
Massachusetts, by the Washburn & Moen Manufacturing Company
against the Reliance Marine Insurance Company (Limited) of London,
England, on a policy of marine insurance taken out, March 15, 1893,
in the sum of $48,800, on a cargo of wire shipped from Boston to
Velasco, Texas, on the schooner
Benjamin Hale, John Hall,
master.
The memorandum clause of the policy ran thus:
"Memorandum. It is also agreed that bar, bundle, rod, hoop, and
sheet iron, wire of all kinds, tin plates, steel, madder, sumac,
wickerware, and willow (manufactured or otherwise), salt, grain of
all kinds. tobacco, Indian meal, fruits (whether preserved or
otherwise), cheese, dry fish, hay, vegetables and roots, rags,
hempen yarn, bags, cotton bagging, and other articles used for bags
or bagging, pleasure carriages, household furniture, skins and
hides, musical instruments, looking-glasses, and all other articles
that are perishable in their own nature, are warranted by the
assured free from average, unless general; hemp, tobacco stems,
matting, and cassia, except in boxes, free from average under
twenty percent unless general, and sugar, flax, flaxseed, and bread
are warranted by the assured free from average under seven percent
unless general, and coffee in bags or bulk, pepper in bags or bulk,
and rice, free from average under ten percent unless general."
And on the margin the following was stamped or written: "Free of
particular average, but liable for absolute total loss of a part if
amounting to five (5%) percent"
It was also provided:
"And in case of any loss or misfortune, it shall be lawful and
necessary to and for the assured, their factors, servants, and
assigns, to sue, labor, and travel for, in,
Page 179 U. S. 3
and about the defense, safeguard, and recovery of the said goods
and merchandise, or any part thereof, without prejudice to this
insurance; nor shall the acts of the insured or insurers in
recovering, saving, and preserving the property insured, in case of
disaster, be considered a waiver or an acceptance of an
abandonment, to the charges whereof the said assurers will
contribute according to the rate and quantity of the sum herein
insured."
The
Benjamin Hale sailed for Velasco, March 31, 1893,
and on April 15 ran ashore on Bahama Banks, but, after throwing
overboard 200 reels of barbed wire, floated and proceeded. On the
night of April 19, the schooner again ran ashore, on Bird Key, near
Dry Tortugas, and largely filled with water. Wreckers came on board
April 21. The master went to Key West, and from thence telegraphed
the Washburn & Moen Company, April 24, that the vessel was
ashore, and he thought the loss was total. April 24, 25, or 26 the
agent of that company told the agent of the insurance company, in
Boston, "what he knew in regard to the troubles, and said that he
wished to abandon the cargo to the underwriters." April 29 a
written notice of abandonment was given, which the insurance
company explicitly declined to accept. The master returned at once
with further assistance, reaching the wreck the morning of April
25, and the vessel was floated April 29, and finally taken to Key
West, arriving May 4. The captain testified that
"from the time the vessel went ashore until she came off they
were taking the cargo out as they could so as to get her off. . . .
Think about one-half of cargo was discharged on the reef, of which
he thinks about 1,300 reels were dry."
This was substantially all carried to Key West, where the
unloading was completed May 10.
Captain Hall made a memorandum at Key West as to the condition
of the cargo when landed there. From this it appeared that out of
13,051 reels of barbed wire, shipped from Boston, 12,277 (or
12,625) were landed at Key West, of which 989 were perfectly dry,
and 10,448 had received "hardly perceptible" damage. Of plain wire,
1,102 bundles were shipped, and all landed at Key West, and 464
were stated to be nearly
Page 179 U. S. 4
dry. Five reels of salamander wire and a wire rope were all
landed and transshipped dry and unimpaired; also 243 kegs of
staples out of 249, and 478 bundles of hay bands out of 1,050.
Libels for salvage were filed against vessel and cargo at Key
West, and the schooner condemned and sold, but the cargo was
released and the amount decreed in respect thereof paid by the
insurance company.
The goods were forwarded from Key West to Velasco on the
schooner
Cactus, where they were tendered to the Washburn
& Moen Company, which refused to receive them. That company
again abandoned, and the insurance company again declined to accept
abandonment.
At this time, a very large part of the goods existed in specie,
and a considerable part was practically uninjured. There were no
facilities for handling, and no market for, barbed wire at Key
West, but there were at Velasco, which was also but sixty miles by
rail from Houston, the headquarters of the general agent of the
manufacturing company in Texas.
The goods were afterwards sold by order of court on the libel of
the master of the
Cactus for freight, demurrage, and
expenses, and realized $10,000. Plaintiff was not present and made
no bid at the sale.
As the cost of saving the cargo and bringing it to Key West and
expenses there exceeded the sum realized at forced sale, and the
freight to Velasco added some hundreds of dollars to that,
plaintiff contended that the cost was more than the value at Key
West and at Velasco.
In respect of the forwarding of the cargo from Key West to
Velasco, the charter party was signed by Captain Hall as master of
the
Benjamin Hale. This was in Boston several days after
Hall had left Key West, but there was evidence that he had
previously authorized the agents of the vessel at Key West, and who
paid for the discharge of the cargo there, to charter the
Cactus, and the second bill of lading was signed by one of
them as attorney in fact for Captain Hall, and stated that the
goods were shipped by him.
The agent for the board of underwriters testified that he
instructed the agent at Key West to see that a vessel was
secured
Page 179 U. S. 5
and the cargo properly shipped to Velasco according to the
original bill of lading; that Hall authorized the
Cactus
to be chartered, and that he always insisted that Hall should
forward the cargo, while Hall said that he received a request from
defendant's agent to so forward.
The circuit court ruled that the defendant was not liable for a
constructive total loss; that the transshipment of the cargo at Key
West, though made by the underwriters as he thought it was, did
not, under the circumstances, make them liable for the property as
underwriters, and that,
"inasmuch as a portion of this cargo -- a considerable portion,
including the staples and a very large percentage of the fencing
wire -- was at Key West in a condition to be transshipped, and did
in fact arrive at Velasco in specie, and suitable for the purposes
for which it was intended, although not so suitable as it would
have been if it had not been submerged in the sea,"
there was no absolute total loss of the whole.
It was agreed that there was an actual total loss of parts of
the cargo to the amount of $2,500 and that, under the views
expressed by the court, plaintiff was entitled to a finding that
there was a constructive total loss.
Accordingly, a verdict was directed for $2,500, and a special
verdict "that there was a constructive total loss."
Judgment was rendered in favor of plaintiff, and each party
prosecuted a writ of error from the circuit court of appeals.
That court concurred in the rulings of the circuit court, but
was of opinion that the cargo was forwarded from Key West to
Velasco under authority of the captain of the
Benjamin
Hale. 82 F. 296.
Judgment having been affirmed, the Washburn & Moen
Manufacturing Company applied for and obtained a writ of certiorari
from this Court.
Errors were relied on by petitioner, in substance, that the
circuit court erred in not ruling that plaintiff was entitled to
recover for a constructive total loss under the policy and in not
allowing the question whether there was an absolute total loss to
go to the jury, or the question whether defendant had accepted
plaintiff's abandonment of the cargo.
Page 179 U. S. 8
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
By the memorandum, wire of all kinds was expressly "warranted by
the assured free from average unless general," and by the rider,
"free of particular average, but liable for absolute total loss of
a part if amounting to five percent"
The memorandum and marginal clauses were
in pari
materia, and to be read together. They were not contradictory,
and the rider merely operated to qualify the memorandum by allowing
recovery for an actual total loss in part, which could not
otherwise be had. In other words, the qualification was manifestly
inserted so that, while conceding that, under the memorandum clause
no liability was undertaken for a constructive total loss, but only
a liability for an actual total loss, the insurers might be held
for an actual total loss of a part.
The contracting parties thus recognized the rule that articles
warranted free of particular average, or free from average unless
general, are insured only against an actual total loss.
The warranty or memorandum clause was introduced into policies
for the protection of the insurer from liability for any partial
loss whatever on certain enumerated articles regarded as perishable
in their nature, and upon certain others none under a given rate
percent. This was about 1749, and since then, in the growth of
commerce, the list of articles freed by the stipulation from
particular average has been enlarged so as to embrace
Page 179 U. S. 9
many, which, though they may not be inherently perishable, are
in their nature peculiarly susceptible to damage.
The early form ran as follows:
"Corn, fish, salt, fruit, flour, and seed are warranted free
from average, unless general or the ship be stranded; sugar,
tobacco, hemp, flax, hides, and skins are warranted free from
average under five pounds percent, and all other goods, and also
the ship and freight, are warranted free from average under three
pounds percent unless general or the ship be stranded."
In 1764, Lord Mansfield, in
Wilson v. Smith, 3 Burr.
1550, held that the word "unless" meant the same as "except," and
that "the words
free from average unless general' can
never mean to leave the insurers liable to any particular
average."
In
Cocking v. Fraser, 4 Douglas 295 (1785), the Court
of King's Bench held, Lord Mansfield and Mr. Justice Buller
speaking, that the insurer was secured against all damage to
memorandum articles unless they were completely and actually
destroyed so as no longer physically to exist.
Chancellor Kent, in his Commentaries, commended this rule as
"very salutary, by reason of its simplicity and certainty, . . .
considering the difficulty of ascertaining how much of the loss
arose by the perils of the sea, and how much by the perishable
nature of the commodity, and the impositions to which insurers
would be liable in consequence of that difficulty,"
and declared that, notwithstanding the authority of
Cocking
v. Fraser had been shaken in England, the weight of authority
in this country was
"in favor of the doctrine that, in order to charge the insurer,
the memorandum articles must be specifically and physically
destroyed, and must not exist in specie."
He added, however, that it had been
"frequently a vexed point in the discussions whether the insurer
was holden, if the memorandum articles physically existed, though
they were absolutely of no value."
3 Kent (1st ed. 1828) 244; 12th ed. *296.
The general rule is firmly established in this Court that the
insurers are not liable on memorandum articles except in case of
actual total loss, and that there can be no actual total loss
Page 179 U. S. 10
where a cargo of such articles has arrived, in whole or in part,
in specie at the port of destination, but only when it is
physically destroyed, or its value extinguished by a loss of
identity.
Biays v. Chesapeake Ins.
Co. (1813), 7 Cranch 415;
Marcardier
v. Chesapeake Ins. Co. (1814), 8 Cranch 39;
Morean v. United States Ins.
Co. (1816), 1 Wheat. 219;
Hugg v.
Augusta Ins. &c. Co. (1849), 7 How. 595;
Insurance Co. v.
Fogarty (1873), 19 Wall. 640.
And see Robinson
v. Commonwealth Ins. Co., 3 Sumner 220;
Marean v. United
States Insurance Co., 3 Wash. C.C. 256.
Biays v. Chesapeake Ins. Co. was a case of insurance
upon hides, of which some were totally lost; some were saved in a
damaged condition, and some were uninjured. This Court overruled
the contention that there could be a total loss as to some of them
notwithstanding the memorandum clause, and Mr. Justice Livingston
said:
"Whatever may have been the motive to the introduction of this
clause into policies of insurance, which was done as early as the
year 1749, and most probably with the intention of protecting
insurers against losses arising solely from a deterioration of the
article by its own perishable quality, or whatever ambiguity may
once have existed from the term
average being used in
different senses -- that is, as signifying
a contribution to a
general loss and also a
particular or partial injury
falling on the subject insured -- it is well understood at the
present day, with respect to such [memorandum] articles that
underwriters are free from all partial losses of every kind, which
do not arise from a contribution towards a general average. It only
remains, then, to examine, and so the question has properly been
treated at bar, whether the hides, which were sunk, and not
reclaimed, constituted a total or partial loss within the meaning
of this policy. It has been considered as total by the counsel of
the assured, but the court cannot perceive any ground for treating
it in that way, inasmuch as out of many thousand hides which were
on board, not quite eight hundred were lost, making in point of
value somewhat less than one-sixth part of the sum insured by this
policy. If there were no memorandum in the way, and the plaintiff
had gone on to recover, as
Page 179 U. S. 11
in that case he might have done, it is perceived at once that he
must have had judgment only for a partial loss, which would have
been equivalent to the injury actually sustained. But without
having recourse to any reasoning on the subject, the proposition
appears too self-evident not to command universal assent that when
only a part of a cargo, consisting all of the same kind of articles
is lost in any way whatever, and the residue (which in this case
amounts to much the greatest part) arrives in safety at its port of
destination, the loss cannot but be partial, and that this must
forever be so so long as a part continues to be less than the
whole. This loss, then, being a particular loss only, and not
resulting from a general average, the court is of opinion that the
defendants are not liable for it."
In
Marcardier v. Chesapeake Ins. Co., some of the goods
insured were warranted "free from average unless general," and
damages were claimed for a constructive total loss of these goods,
but the claim was disallowed. After stating the American rule that
a damage of ordinary goods exceeding fifty percent entitles the
insured to recover for a constructive total loss, Mr. Justice Story
continued:
"But this rule has never been deemed to extend to a cargo
consisting wholly of memorandum articles. The legal effect of the
memorandum is to protect the underwriter from all partial losses,
and if a loss by deterioration, exceeding a moiety of value, would
authorize an abandonment, the great object of the stipulation would
be completely evaded. It seems, therefore, to be the settled
doctrine that nothing short of a total extinction, either physical
or in value, of memorandum articles at an intermediate port, would
entitle the insured to turn the case into a total loss where the
voyage is capable of being performed."
In
Robinson v. Commonwealth Ins. Co., 3 Sumner 220,
where a clause in the policy exempted the insurers from liability
for any partial loss on goods esteemed perishable in their own
nature, and the goods insured were held to be perishable, the same
eminent judge charged the jury:
"The principle of law is very clear that, as this is an
insurance on a perishable cargo, the plaintiff is not entitled to
recover
Page 179 U. S. 12
unless there has been a total loss of the cargo by some peril
insured against. If the schooner had arrived at the port of
destination with the cargo on board, physically in existence, the
plaintiff would not have been entitled to recover, however great
the damage might have been by a peril insured against, even if it
had been ninety-nine percent or, in truth, even if the cargo had
there been of no real value."
Part of the cargo in
Morean v. United States Ins. Co.
was warranted free from average unless general, and Mr. Justice
Washington said:
"All considerations connected with the loss of the cargo in
respect to quantity or value may at once be dismissed from the
case. As to memorandum articles, the insurer agrees to pay for a
total loss only, the insured taking upon himself all partial losses
without exception."
"If the property arrive at the port of discharge reduced in
quantity or value to any amount, the loss cannot be said to be
total in reality, and the insured cannot treat it as a total, and
demand an indemnity for a partial, loss. There is no instance where
the insured can demand as for a total loss, that he might not have
declined an abandonment, and demand a partial loss. But if the
property insured be included within the memorandum, he cannot under
any circumstances call upon the insurer for a partial loss, and,
consequently he cannot elect to turn it into a total loss. . . .
The only question that can possibly arise in relation to memorandum
articles is whether the loss was total or not, and this can never
happen where the cargo or a part of it has been sent on by the
insured and reaches the original port of its destination. Being
there specifically, the insurer has complied with his engagements,
everything like a promise of indemnity against loss or damage to
the cargo being excluded from the policy."
In
Hugg v. Augusta Ins. Co., the insurance was upon
freight on a cargo of jerked beef, perishable articles being
warranted free from average, and it was held that defendant was not
liable for a total loss of freight unless it appeared that the
entire cargo was destroyed in specie. The memorandum clause is
Page 179 U. S. 13
given in the margin.
* Mr. Justice
Nelson, delivering the opinion of the Court, made these, among
other, observations:
"What constitutes a total loss of a memorandum article has been
the subject of frequent discussion both in the courts of England
and this country, and in the former of some diversity of opinion;
but in most of the cases, the decisions have been uniform, and the
principle governing the question regarded as settled, and that is,
so long as the goods have not lost their original character, but
remain in specie, and in that condition are capable of being
shipped to the destined port, there cannot be a total loss of the
article, whatever may be the extent of the damage, so as to subject
the underwriter. The loss is but partial. . . ."
"The only doubt that has been expressed in respect to the
soundness of this rule is whether a destruction in value for all
the purposes of the adventure, so that the objects of the voyage
were no longer worth pursuing, should not be regarded as a total
loss within the memorandum clause, as well as a destruction in
specie. . . . In this country, the rule has been uniform that there
must be a destruction of the article in specie, as will be seen by
a reference to the following authorities. . . ."
"Whether the test of liability is made to depend upon the
destruction in specie or in value would, we are inclined to think,
as a general rule make practically very little, if any, difference,
for while the goods remain in specie and are capable of being
carried on in that condition to the destined port, it will rarely
happen that, on their arrival, they will be of no value to the
owner or consignee. The proposition assumes a complete
destruction
Page 179 U. S. 14
in value, otherwise the uncertainty attending it would be an
insuperable objection, and in that view it may be a question even
if the degree of deterioration would not be greater to constitute a
total loss than is required under the present rule."
"The rule as settled seems preferable for its certainty and
simplicity and as affording the best security to the underwriter
against the strong temptation that may frequently exist on the part
of the master and shipper to convert a partial into a total
loss."
The case came up on a certificate of division, and the answer to
the first question certified was:
"That, if the jury find that the jerked beef was a perishable
article within the meaning of the policy, the defendants are not
liable as for a total loss of the freight unless it appears that
there was a destruction in specie of the entire cargo, so that it
had lost its original character at Nassau, the port of distress, or
that a total destruction would have been inevitable from the damage
received if it had been reshipped before it could have arrived at
Matanzas, the port of destination."
The cases in this Court are reviewed and applied by Mr. Justice
Miller in
Great Western Insurance Co. v. Fogarty, in which
it was ruled that, where certain machinery had been so injured as
to have lost its identity as such, recovery for total loss might be
sustained.
The same conclusion has been announced in many of the state
courts.
Brooke v. Louisiana Ins. Co., 5 Mart.N.S. 530,
535;
Skinner v. Western Ins. Co., 19 La. 273;
Gould v.
Louisiana Mut. Ins. Co., 20 La.Ann. 259;
Williams v.
Kennebec Ins. Co., 31 Me. 455;
Waln v. Thompson, 9
Serg. & R. 115;
Willard v. Manufacturers' Ins. Co., 24
Mo. 561;
Wadsworth v. Pacific Ins. Co., 4 Wend. 33;
De
Peyster v. Sun Ins. Co., 19 N.Y. 272;
Burt v. Brewers'
Ins. Co., 9 Hun, 383,
s.c., 78 N.Y. 400;
Chadsey
v. Guion, 97 N.Y. 333;
Merchants' S.S. Co. v. Commercial
Mut. Ins. Co., 19 Jones & S. 444;
Carr v. Security
Ins. Co., 109 N.Y. 504.
It is said that a different rule has been laid down in
Massachusetts by the Supreme Judicial Court of that commonwealth.
Kettell v. Alliance Ins. Co., 10 Gray, 144;
Mayo v.
India Mut. Ins. Co., 152 Mass. 172.
Page 179 U. S. 15
Even if this were absolutely so, we should not feel constrained,
though regretting the difference of opinion, to depart from our own
rule. The policy was a Massachusetts contract, it is true, but its
construction depended on questions of general commercial law, in
respect of which the courts of the United States are at liberty to
exercise their own judgment, and are not bound to accept the state
decisions as in matters of purely local law.
We are not, however, persuaded that the cases cited justify the
asserted conclusion as respects articles specifically included in
the memorandum.
In
Kettell v. Alliance Ins. Co., the memorandum clause
of the policy provided that the insurers should not be liable for
any partial loss on, among other articles,
"salt, grain, fish, fruit, hides, skins, or other goods that are
esteemed perishable in their own nature, unless it amount to seven
percent on the whole aggregate value of such articles, and happen
by stranding."
At the end of the last paragraph of the policy, next before the
formal conclusion, were printed these words: "Partial loss on sheet
iron, iron wire, brazier's rods, iron hoops and tin plates is
excepted."
The shipment consisted of five hundred boxes of tin plates,
invoiced and valued together at one sum. The vessel was wrecked,
all the plates damaged more or less, and some of them totally
destroyed. Chief Justice Shaw ruled for the court that the
exception did not come under the memorandum clause; that it
recognized a distinction between tin and brass goods liable to
tarnish and memorandum articles liable to decay, and that the
natural construction of the exception was
"that it leaves the insurer liable for all total losses, but it
makes no distinction between absolute and constructive total
losses, and in case of a constructive total loss, which gives the
assured a right to abandon, and he exercises the right, it becomes
a legal total loss, as if absolute in its nature."
The insurers were held liable for a constructive total loss
under the fifty percent rule.
In the case before us, wire of all kinds was specifically
exempted by the memorandum clause, and the exemption was relaxed by
the rider in respect of absolute -- that is, actual -- loss of a
part.
Page 179 U. S. 16
If the contract in that case had been in terms and arrangement
the same as the contract in this, it does not follow that the same
result would have been reached.
But we must not be understood as accepting the views expressed
in
Kettell's case, great as is the weight attaching to the
utterances of the distinguished judge who delivered the opinion. We
do not think the words "partial loss excepted" had any other
meaning, as applied to tin plates, than if applied to articles
having an inherent tendency to decay. Tin plates may not be
perishable in their nature in the sense of liability to corporeal
destruction, but their original character as tin plates is
perishable by reason of liability to corrosion and rust. And this
may explain why the words "and happen by stranding" were omitted
from the exception. It appears to us that the natural meaning of
the exception was to exempt the underwriters from liability for an
actual partial loss, and therefore for a constructive total loss,
which involves an actual partial loss and a remainder transferred
by abandonment.
Mayo v. India Ins. Co., 152 Mass. 172, follows the
prior case, but the court expressly refused to decide "whether in
this commonwealth there can be no total loss of a memorandum
article if any part of it arrives at the port of discharge in
specie."
It would subserve no useful purpose to attempt a review of the
English cases on this subject. If in England a plaintiff may
recover for a constructive total loss of memorandum articles, it is
when they are so injured as to be of no substantial value when
brought to the port of destination.
In the United States (and herein is a material difference
between the jurisprudence of the two countries), the general rule
is that a damage exceeding fifty percent justifies abandonment and
recovery as for constructive total loss.
Marcardier
v. Chesapeake Ins. Co., 8 Cranch 39; Le Guidon
(Paris, 1831) c. VII art. I; c. V, art. VIII. But this principle is
not applicable to memorandum articles in respect of which the
exception of particular average excludes a constructive total
loss.
There is no pretense here that this wire, with some small
exceptions duly allowed for, did not exist at Key West, and did not
arrive at Velasco in specie, and, as to a large part, with its
Page 179 U. S. 17
original character unimpaired. Abandonment is necessary when the
loss is only constructively total, and under this policy, no right
of abandonment existed at the time of the disaster or afterwards by
the exercise of which the assured could turn this partial loss in
fact into a total loss by construction.
The salvage charges at Key West were paid by the underwriters as
incurred to avert an impending actual total loss of the whole
subject of the insurance. It was to their particular interest, as
well as to the general public interest, that the goods should be
saved, and it is apparent that plaintiff could not injure their
market by refusing to receive them and then claim that their value
was determined by the price they brought at forced sale.
Counsel conceded that the cargo was damaged to an amount
exceeding fifty percent, and that therefore there was a
constructive total loss according to the American rule applicable
to nonmemorandum articles. But there was not an actual loss of the
whole, and by the memorandum and rider the insurance company was
exempted from liability, except for the actual loss of a specific
part, and for that plaintiff has duly recovered.
The circuit court correctly ruled that, under the terms of the
policy, plaintiff could not recover for a constructive total loss
of the goods insured; and, inasmuch as a large part of the goods
reached Velasco in specie, a substantial part of them being wholly
uninjured, was right in declining to permit the jury to pass on the
question of actual total loss.
There is nothing taking the case out of the general rule. The
forced sale certainly does not affect it.
After some previous jettison, the cargo passed through the
wreck, and the bulk of the wire, some damaged and much uninjured,
arrived at the port of destination.
The consignee, which was also the manufacturer, refused to
accept it, and declined to put an end to the proceedings which were
instituted to its knowledge. If there had been a constructive total
loss and a sufficient abandonment prior to the sale, defendant was
then liable. As there was not, and no right to abandon or
acceptance of abandonment, the goods were at
Page 179 U. S. 18
plaintiff's risk, and defendant was not responsible for any loss
plaintiff sustained by the sale.
But although, as we have seen, plaintiff had no right to
abandon, and although defendant specifically refused to accept an
abandonment, it is contended that defendant transshipped the wire,
and that such transshipment amounted to an acceptance of
abandonment.
The circuit court of appeals was of opinion that the forwarding
from Key West to Velasco was done under the authority and with the
approval of the captain of the
Benjamin Hale. As the cargo
was in a condition for transshipment, and there was opportunity to
effect it, defendant rightfully insisted that it was the duty of
the master to forward it to the destined port.
Yet even if the underwriters chartered the
Cactus and
forwarded the cargo, we agree with both courts that neither that
nor any other act disclosed by the evidence would have authorized
the jury to find that defendant had accepted the attempted cession
of the cargo.
The sue and labor clause expressly provided that acts of the
insurer in recovering, saving, and preserving the property insured
in case of disaster were not to be considered an acceptance of
abandonment. Whether regarded as embodying a common law principle
or as new in itself, the clause must receive a liberal application,
for the public interest requires both insured and insurer to labor
for the preservation of the property. And to that end, provision is
made that this may be done without prejudice.
The circuit court of appeals well points out that, at Key West,
there was no agent of the assured, no adequate means of protection,
and no market, while at Velasco there were excellent facilities for
protection and handling of cargo, easy access to the company's head
agency, and a good market, and it was the port of destination.
If, then, it was the insurer that carried the property, to be
preserved and carried, to Velasco, where it was offered to the
consignees, such labor and care rendered in good faith did not
operate as an acceptance of abandonment, and especially as there
was no right to abandon and a distinct refusal to accept.
Page 179 U. S. 19
Acts of the insurer are sometimes construed as an acceptance,
when the intention to accept is fairly deducible from particular
conduct, in the absence of explicit refusal. Silence may give rise
to ambiguity solvable by acts performed. Here, however, defendant
refused to accept, and there was no ambiguity in its attitude, and
what was done, if done by it, was no more than it had the right to
do without incurring a liability, expressly disavowed. There was
nothing to be left to the jury on this branch of the case.
Some further suggestions are made, but they call for no
particular consideration.
Judgment affirmed.
*
"It is also agreed that bar and sheet iron, wire, tin plates,
salt, grain of all kinds, tobacco, Indian meal, fruits (whether
preserved or otherwise), cheese, dry fish, vegetables and roots,
hempen yarn, cotton bagging, pleasure carriages, household
furniture, furs, skins, and hides, musical instruments, looking
glasses, and all other articles that are perishable in their own
nature, are warranted by the assured free from average, unless
general; hemp free from average under twenty percent, unless
general, and sugar, flax, flaxseed, and bread are warranted by the
assured free from average under seven percent, unless general, and
coffee in bags or bulk, and pepper in bags or bulk, free from
average under ten percent, unless general."
