Poole v. Protection Insurance Co.

Storrs, J.

On the facts in this case the plaintiffs claim a right to recover as for a total loss of the whole hides insured.

The policy in question contains what is termed the common memorandum clause, by which it is stipulated, that the defendants shall not be liable for any partial loss on the articles here insured. In order to recover, it is, therefore, necessary, that a total loss should be shewn ; and the question is, whether in this case, there has been such a total loss of the property insured, within the true meaning of a policy of this description.

That the defendants would have been liable for a total loss, under the circumstances of this case, if their liability to such total loss had not been limited, by the memorandum clause, we do not think can admit of a question ; nor do we understand that any doubt has been suggested, by their counsel. The property was insured from Mobile to New-York, against all damage which it might sustain, by the perils of the seas. It is admitted, that, by such peril, the vessel, in which it was insured, was shipwrecked, in the progress of her voyage, and before her arrival at the port of destination. In consequence of such shipwreck, the hides were submerged, and so continued for several days, when, the efforts of the crew having proved unavailing for their rescue, a portion of them were recovered, by the wreckers in that vicinity, and taken by them to Nassau, where it was discovered, that, by the process of fermentation and putrefaction, which had commenced, they were rendered unfit for immediate exportation. They were, therefore, sold, with the advice of the consul at that port, and after paying from the avails the port charges and the amount , , , ,. •, , ■, due to the salvors tor recovering the property, the residue was remitted to the owners for the benefit of whomsoever it might concern. The master and crew of the vessel did not arrive at Nassau until some days after the property had been sold. On their arrival, the master made a protest, in usual form, a copy of which, with a notice of abandonment, was, on its arrival in this country, forwarded, by the plaintiffs, to the defendants, and a claim made for the amount insured, which the defendants disallowed and refused to pay. The hides not thus recovered remained with the vessel, and were lost; and the vessel became a total wreck. There is no claim that any thing was omitted, by the master and crew, which it was in their power to do, for the recovery and preservation of the property insured; nor that the hides saved were in such a state as to allow of their being forwarded, in the form of hides, to their port of destination ; nor is there any evidence that, if such had been their condition, any vessel could be procured, in which they might have been so forwarded. And it is obvious, that if it had been practicable to arrest the progress of decay which had commenced, and to forward them by another vessel at hand, the expenses, which would have attended the cure of them, and their care, storage and transportation, in addition to the salvage and port charges, would have been so large, in' comparison with their value, that it was doubtful whether any thing could be realized, by the owners, when they should finally be received by them; and the adventure, therefore, was not worth prosecuting, but was substantially destroyed.

Under these circumstances, it cannot be necessary to cite authorities to shew, that, by the principles applicable to marine insurance, the insurers would be liable as for a total loss of the whole property on a policy containing no such stipulation as is embraced in the common memorandum clause, providing for an exception in case of a partial loss only. The object of such a policy being to obtain, and the contract embraced in it to furnish, an indemnity for any loss which the assured might sustain to the property, by its being prevented, in consequence of the peril insured against, from reaching its destination ; its arrival there being prevented, by such peril, and that without any fault of the assured, or means on his Part t0 ^orwar^ ⅜ or any portion of it; there being in fact a total loss of the property, at the time of the shipwreck, of the vessel which contained it, when its restoration, in whole or Par^’ was placéd out of the power of those with whom it was entrusted ; a liability, upon every principle applicable to contracts of insurance, attached tq the insurers, to indemnify the insured as for a total loss. And in this case, the inquiry would be unnecessary, whether the loss should be deemed an absolute total loss, or one which is termed only constructively so ; and consequently, whether it was necessary that there should be a formal abandonment to the underwriters. In the present case, such abandonment took place at the earliest practicable period; and to the manner of it no exception is, or probably can be, made. Whether, in a case like this, an abandonment was indispensable to a recovery for a total loss, we should be disposed, particularly on the authority of Roux v. Salvador, 3 Bing. N. C. 266. and the principles there adopted, to hold, that it was not incumbent on the assured to abandon. When the property is absolutely and totally lost to the owner, the necessity of an abandonment does not exist. It is only where it subsists in specie, in whole or part, and there is a chance of recovery, that it is required. Here, it would seem, that the property insured was totally and absolutely lost to the owners, when it was submerged with the wreck, and that the liability of the insurers then attached. Subsequent events shewed, that it was impracticable for the owners to reclaim any portion of it. No part of it would ever have been recovered, but for the efforts of strangers, who succeeded in rescuing what was saved. That portion was retained, by the salvors ; and was by them taken away and disposed of, without the advice or consent of the owners, or their ever having possession of the property, or any controul oyer it, and the proceeds in part applied to defray the claim for salvage. And no act has taken place to indicate an intention, on the part of the insured, to avail themselves of any hope of benefit, which they might entertain from prosecuting their original adventure. That part of the property, which was recovered, was not saved to the owners. As to them, it was, for all substantial purposes, as though it had not been rescued from the wreck. And no reason appears why the conduct of the salvors, in the recovery and subsequent disposition of the property, should affect the right, which had accrued to the owners from the loss & ’ which had then happened, or why the loss, which was total,should be deemed to be turned into a partial loss, by the subsequent events, from which the insured could derive no benefit. We are strongly inclined to think, therefore, that if it were necessary to decide the point, this would be deemed a case, not of a constructive, but of an actual total loss ; and therefore, that no abandonment was necessary. Anderson & al. v. The Royal Exchange Assurance Company, 7 East 38. Parry v. Aberdein, 9 Barn. Cres. 411. This question, however, we do not intend to decide.

This, therefore, being a case in which We have no doubt that the plaintiffs would be entitled to recover for a total loss of the whole property insured, if the liability of the defendants were unrestricted by the memorandum clause, it is necessary to inquire whether their liability is varied, by that restriction. On this subject, the defendants claim, that, in older to subject them on a policy of this description, it is necessary that the whole of the property insured should, by the peril insured against, be completely and actually destroyed, so as no longer physically to exist in specie, or at least that there should be a total extinction of its value; and that it is not sufficient to prove such a technical or constructive loss, as would, by the artificial or arbitrary rules applicable to policies by which property is not insured free from particülaí average, be deemed a total loss, on an abandonment.

Upon an examination of the authorities on this subject, we do not find, that, in the mode of distinguishing a partial from a total loss, by shipwreck, or by damage to the ship, there is any difference recognized, whether the property is insured with or without the exception of particular average. The elementary writers on this subject lay down the doctrine, that the insertion of the common memorandum does not vary the rule, by which, when a loss happens from such a cause, it is to be deemed partial or total; and in this they are supported, by the cases reported. In the case of Roux v. Salvador, before mentioned, decided in the court of Exchequer Chamber, where it Was brought, by writ of error from the C. P., where hides, insured free from particular average, arriving at an intermediate port, in a state of incipient putridity, occasioned by a leak in the ship, were there sold for one fourth of their value, because, by the process of putrefaction, they would have been destroyed before their arrival at the port of destination, the counsel for the defendant resisted the claim for a total loss, on the ground of a distinction between goods insured with and without the exception of particular average, as to the mode of ascertaining whether the loss be total. But, the court most emphatically repudiates any such distinction ; and Lord Abinger, in pronouncing its opinion, says: “ It appears to us, that there is no ground for this assumed distinction between goods that are subject to a total loss unconditionally, and goods excepted by the memorandum from such a loss. The interest which the assured may have, in certain cases, to convert a partial loss into a total loss, may be a fair argument to a jury, upon a doubtful question of fact, as to the nature of the loss, or the motive for an abandonment; and in the same view that interest has been adverted to occasionally, by judges, whefe the conclusions to be drawn from facts, upon a special case, or upon a motion for a new trial, were open to discussion. But there is neither authority nor principle for the distinction in point of law i whether a loss be total or partial in its nature, must depend upon general principles. The memorandum does not vary the rules upon which a loss shall be pardal or total: it does no more than preclude the indemnity for an ascertained partial loss, except on certain conditions. It has no application whatever to a total loss, or to the principle on which a total loss is to be ascertained.” The judgment in the court of Commoti Pleas, (which was reversed in the Exchequer Chamber,) was not rendered on the ground, that, in the mode of ascertaining whether the loss is total, there is any difference between goods insured with and without the memorandum clause. On the contrary, the principle on which that court held, that there could be no recovery, is entirely inconsistent with such a distinction. They came to the conclusion, in that case, that the loss was not absolutely, but only constructively, total; and that, therefore, an abandonment must be shewn, in order to entitle the plaintiff to recover, which, not being done, judgment was rendered for the defendant. If an abandonment had been proved, there would have been no impediment to a recovery, although the loss was only constructively total. This judgment was reversed in the Exchequer Chamber, on the ground, that, in the opinion of that court, the loss was to be deemed not a constructive, but an absolute, total loss of the goods; and that, therefore, abandonment was necessary.- The two courts differed only on the question whether the loss was constructively or absolutely total; and therefore, whether an abandonment should be shewn: but that a constructive total loss, accompanied by an abandonment, would be sufficient to entitle the.plaintiff to recover, does not appear to have been doubted.

The same principle is supported, by the case of Manning v. Newnham, (Marshall 585. Park 260.) in which Lord 'Mansfield, in giving the opinion of the court, in favour of a total loss' of goods insured free from particular average, said: “The ship, has an irreparable hurt within the policy, and there ⅛ no ship to be had to take the cargo oil board by the case of Dyson v. Rowcroft, 3 Bos. & Pul. 474. where a loss of'the voyage by damage to the ship was held to be a total loss of the memorandum, articles ; and by the case of Anderson v. Wallis, 2 Man. & Selw. 240. where Lord Ellenborough, speaking of the exception in the memorandum, said: “A total íoss of the cargo may be effected, by a total arid permanent incapacity of the ship to perform the voyage ; that is a destruction of the con--templatéd adventure.” And the same judge intimated a. similar opinion in the cases of Glennie v. The London Assurance Company, 2 Mau. & Selw. 371. and Wilson v. The Royal Exchange Assurance Company, 2 Campb. 626. The same doctrine was expressed in Richardson & al. v. The Maine Insurance Company, 6 Mass. Rep. 119. by Chief Justice Parsons, who said, in reference to insurance with, the common memorandum : “ A cargo of fish may as well be abandoned, by a loss'of the voyage, as a cargo of any other description and in Murray v. Hatch, 6 Mass. Rep. 473. by Judge Sewall. The same principle prevails in New-York. Le Roy & al. v. Governeur, 1 Johns. Ca. 226. Maggrath & al. v. Church, 1 Caines, 196. Indeed, on this point there appears to be. an entire uniformity of decisions both in this country and in England. We consider it, therefore, established, that where a total loss of goods insured, with the exception of particular average, is claimed to have, taken place, by reason of shipwreck, or damage to the vessel, which is the case now before us, the same rule prevails in ascertaining whether such a loás has arisen as if the policy were free from that exception,

The objection strongly urged, by the counsel for the defend» ants, that a recovery here is precluded, because a part ot the property existed in specie, and was not physically destroyed, 0f some value at the termination of the risk, is not, in our . . . opinion, applicable to a case like the present, where the goods neither come to the hands of the owners, nor reach their port of destination, nor aré' capable of being forwarded. By the termination of the risk, in cases where, if the property exists in specie, the insurer is held to be protected, by the memorandum clause, is meant the termination of the risk as contemplated in the policy, the arrival of the goods at their place of destination, and not a forced termination of the risk, by a peril insured against, which prevents the property from being carried to its original destination. 3 Bing. N. C. 266. Indeed, it is against Such forced termination that it was the very object of the policy to furnish aii indemnity. If any of the hides had been brought in specie, however injured, to their port of destination', either in the vessel in which they were originally shipped, or in another procured after her shipwreck ; — or if it appeared that another vessel might have been procured, by which they could have been forwarded to the port of destination, and the plaintiffs did not avail themselves of such opportunity, and notwithstanding they were damaged or depreciated, and to whatever extent, provided a prudent roan, if no insurance had been effected, would have deemed it for his interest to forward the goods to their original destination ; — the claim that the defendants should be exonerated from liability might be well founded. In this case, however, by a peril provided against in the policy, the voyage is arrested; the property has received a damage, which, considering its nature, rendered it certain that, without incurring additional expense, it could not reach its original destination in specie, even if the means of re-shipping it had been af hand; and in that case, it is obvious, that it would have been, if uninsured, no object for a prudent man to forward it; if it could have been safely reshipped and forwarded, without a change of its physical character and form, there is no proof that the means of re-shipment were to be procured; and the goods, moreover, were, and had been, since their rescue from the wreck, in the hands of strangers and beyond the controul of the owners, and indeed sold and transferred, without the knowledge of themselves or their agents, and before their arrival at the place where they were to be disposed of. No case can be found, where, under •such circumstances, the loss has been held to be only partial, because a portion of the property continued to exist in specie; and on this subject we are induced to adopt the just and rational language of Lord Abinger, in the case of Roux v. Salvador, where he says: “The existence of the goods, or any part of them, in specie, is neither a conclusive, nor, in many cases, a material circumstance to the question whether the loss is total or partial.” “ If the goods, once damaged by the perils of the sea, and necessarily landed before the termination of the voyage, are, by reason of that damage, in such a state, though the species be not utterly destroyed, that they cannot, with safety, be re-shipped, in the same or any other vessel; if ⅛ be certain that, before the termination of the original voyage, the species itself would disappear, and the goods assume a new form, losing all their original character; if, though imperishable, they are in the hands of strangers, not under the controul of the assured ; if, by any circumstance over which he has no controul, they can never, or within no assignable period, be brought to their original destination ; in any of these cases, the circumstance of their existing in specie, at that forced termination of the risk, is of no importance. The loss is, in its nature, total to him, who has no means of recovering his goods, whether his inability arises from their annihilation, or from any other insuperable obstacle.” “If a prudent man, not insured, would decline any further expense in prosecuting an adventure, the termination of which will probably never be successfully accomplished, a party insured may, for his own benefit, as well as that of the underwriter, treat the case as one of a total loss, and demand the full sum insured.”

By a reference to the cases where the existence of the property in specie has been held to defeat the claim of the owners for a total loss under the common memorandum, it will be found, that it was not that circumstance merely, but combined with others, on which the claim was disallowed ; as for instance, that the property, although in a damaged state, had arrived at its port of destination, and was delivered to the consignees, as in Glennie v. London Assurance Company, 2 Mau. & Selw. 371.; or that it was in the hands of the owners’ alR‘ tor any thing that appeared, have been sent tq port of destination, as in Thompson v. Royal Exchange Insurance Company, 16 East 214.; or that the portion of the. property saved, though damaged, was restored to soundness, and might have been forwarded to its destination, but that the abandonment, if the owner ever had that right, was too late, after he had treated the property.as his own, as in Anderson v. Royal Exchange Assurance Company, 7 East 38. See also. 2 Johns. Ca. 289, Marsh. 226, 227. 232. Park 114. 181. 191. 3 Caines 108. 8 Cranch 39.

The present is not, however, a case of mere retardation of the .voyage, or where the property ultimately reaches, or could reach, its final destination, or ever comes to the hands of its owners, and is not governed by those cases, or the principle on which they were determined.

This, therefore, being a case where; if the policy did not contain the memorandum clause, the plaintiff would be entitled to recover as for a total loss of the .whole goods insured, and the rule by which such loss is to be ascertained not being varied, by such exception, thé plaintiffs are entitled to a like recovery. '

It was claimed, by the plaintiffs, in the argument, that if they could not recover for a total loss of the whole property insured, yet that they are entitled to recover as for a total loss the value of that which was-in fact totally lost; and therefore, that they must have judgment for the value of the hides which were never recovered from the wreck. :A decision of this point is rendered unnecessary, by the view which has been taken of the other question in the case. We would, however, remark,-that the principle adopted in the case of Davy v. Milford, 15 East, 599. which supports this claim of the plaintiffs, does not appear to have been followed in England, and has been rejected, by the most respectable courts in this country. Biays v. The Chesapeake Insurance Company, 7 Cranch 415. 418. Humphreys v. Union Insurance Company, 3 Mason, 429. 435. & seq. Waln v. Thompson, 9 Serg. & Rawle, 115. Morean v. The United States Insurance Company, 1 Wheat. 219. 227. & seq. n. Wadsworth v. Pacific Insurance Company, 4 Wend. 33. 2 Phill. Ins. 342.

The superior court is advised to render judgment in favour of the plaintiffs for the whole amount insured.

In this opinion the other Judges concurred.

Judgment for plaintiffs.

Case Details

Case Name: Poole v. Protection Insurance Co.

Court Name: Supreme Court of Connecticut

Date Published: Jul 15, 1840

Citation: 14 Conn. 47

Court Abbreviation: Conn.