Bradlie v. Maryland Insurance Company

by Joseph Story

United States Supreme Court

37 U.S. 378

Bradlie  v.  Maryland Insurance Company

In error to the circuit court of the United States for the district of Marryland.

The case, as stated in the opinion of the Court, was as follows:

The original action was upon a policy of insurance, dated the 22d of November, 1832, whereby the defendants, the Maryland Insurance Company, caused the plaintiffs, by their agents, (William Howell & Son,) to be insured, lost or not lost, ten thousand dollars, at a premium of four per cent., on the brig Gracchus, Snow, master, (valued at that sum,) at and from Baltimore, for six calendar months, commencing that day at noon; and if she be on a passage at the expiration of the time, the risk to continue; at the same rate of premium, until her arrival at the port of destination. The declaration alleged a total loss by the casting ashore and stranding of the brig, on the 23d of March, 1833, in the river Mississippi. Upon the trial of the cause, it appeared in evidence that the brig sailed from Baltimore on a voyage to New Orleans, and safely arrived there, and took on board part of cargo, (pork and sugar) at that port, on a voyage for Baltimore; and about the middle of the 23d day of March, 1833, sailed from New Orleans, intending to proceed to Sheppard's plantation, on the river Mississippi, about thirty-three miles below New Orleans, to take in the residue of her cargo for the same voyage. At the English Turn, about twenty-two miles from New Orleans, the brig attempted to come to anchor, and in so doing lost the small bower anchor; and then dropped the best bower anchor, which brought her up. The next morning, while the brig was proceeding on her voyage, she struck on a log, broke the rudder pintles, when she fell off and went on shore. A signal was then made for a steamboat in sight, which came to the assistance of the brig, and in attempting to haul her off, the hauser parted. It was then found that the brig was making water very fast; help was obtained from a neighbouring plantation. They commenced pumping and discharging the cargo on board of the steamboat; and after discharging all the pork, and a part of the sugar, they succeeded in freeing the ship on the afternoon of the same day. She was then got off, and proceeded to New Orleans, where she arrived the same night; she continuing to leak, and both pumps being kept going all the time. The next day, the master understood that the steamboat claimed a salvage of fifty per cent., and intended to libel for it. On the 27th of the same month, the brig was taken across the river for repairs. On the same day the brig was libelled for the salvage, in the district court of Louisiana.

On the 25th of March, Snow, the master, wrote a letter to one of the owners, containing an account of the loss and state of the brig; and also of the claim by the salvors of fifty per cent., which the underwriters on the cargo and himself had objected to; adding, that they should hold the steamboat liable for any damage that might be incurred on account of the detention.

The following is a copy of the letter.

'New Orleans, 25th March, 1833.

'ISAAC BRADLIE, Esq., Seaford, Delaware.

'Dear Sir:-I left here on the 23d inst., to go thirty-six miles below, to complete loading the brig with sugars, for Baltimore; on the evening of the same day in coming to in the English Turn, in a heavy blow from the S. E., parted the small bower cable, and lost the anchor. I then let go the best bower, which brought her up, where we lay during the night; in the morning of the 24th, got under way and proceeded down the river; at 7 A. M., struck on a log, broke the rudder pintles, the brig fell off and went on shore. I then made a signal for a steamboat which was in sight; she came to our assistance and attempted to pull us off, but the hauser parted; we then found that the brig was making water very fast, and that she would soon fill; got thirty odd negroes from a plantation, and commenced pumping, and discharging the cargo on board of the steamboat; after discharging all of the pork and the greater part of the sugar, we succeeded in freeing of her, at 5 P. M.; we then got her off and proceeded up to town, where we arrived at 11 P. M. The owners of the steamboat claim a salvage of fifty per cent. on vessel and cargo, which the underwriters of the cargo, with myself, have objected to: we have not been able to discharge the balance of the cargo to-day; what the consequence will be I cannot say. We hold the owners of the steamboat liable for any damage that may occur on account of the detention; the brig continues to leak so as to keep both pumps going almost constantly. About one-half of the sugar is damaged. I have noted a protest and had a survey, and shall proceed to have every thing done in the most careful manner, as the survey may direct, for the interest of all concerned: as soon as I am able to inform you of what will be done, I will do so by the first opportunity.'

On the 22d of April, Messrs. Howell & Son addressed a letter to the company, submitting the letter of the 25th of March to the company; and say therein, 'In consequence of the damage, together with the detention that must grow out of a lawsuit, (in which it appears that the vessel is involved,) the voyage being broken up, we do hereby abaudon to you the brig Gracchus, as insured in your office per policy No. 13,703, and claim for a total loss.' On the same day, the company returned an answer, saying, 'We cannot accept the abandonment tendered in your letter of this date; but expect you to do what is necessary in the case for the safety and relief of the vessel.'

On the 9th of the ensuing May, the district court decreed onequarter of the value of the vessel and cargo, (estimated at seven thousand dollars) as salvage; the brig being valued at twenty-five hundred dollars. On the 14th of the same month, the master got possession again of the brig, the salvage having been paid. On the 3d of June, 1833, the brig was repaired and ready for a freight; and early in July she sailed for Baltimore, with a partial cargo on board, on freight; and duly arrived there in the latter part of the same month. The repairs at New Orleans amounted to the sum of one thousand six hundred and ninety dollars and fifteen cents; in the share of the brig, at the general average or salvage, to the sum of one thousand two hundred and forty-five dollars and seven cents; in the whole amounting to two thousand nine hundred and thirty-five dollars and twenty-two cents. To meet this sum, and some other expenses, the master obtained an advance from Messrs. Harrison, Brown & Co., of New Orleans, of three thousand seven hundred and fifteen dollars and forty-one cents, and gave them as security therefor, a bottomry bond on the Gracchus, for the principal sum, and five per cent. maritime premium, payable on the safe arrival of the brig at Baltimore.

On this bottomry bond, the brig was libelled in Baltimore, and no claim being interposed by any person, she was, by a decree of the district court of Maryland, on the 5th of September, 1833, ordered to be sold to satisfy the bottomry bond; and she was accordingly sold by the marshal, about the 20th of the same month, to John B. Howell, for four thousand seven hundred and fifty dollars; who, on the 24th of the same month, paid to the attorney of the libellant the full amount due under the decree of the court. On the same day the president of the company addressed a letter to Messrs. Howell & Son, in which they say, 'We have examined the statements of general and particular average, and the accounts relating thereto, which you handed us some days ago, respecting the expenses incurred on the brig Gracchus, at New Orleans. Although some of the charges are of a description for which the company is not liable by the terms of their policy; yet wishing to act liberally in the case, we have agreed to admit every item in the accounts, and the different amounts will be as follows.' Here follows a statement, deducting from the repairs one-third new for old, and admitting the sum of two thousand four hundred and nine dollars and eleven cents to be due to the plaintiffs, and enclosing the premium note and a check for the amount. The letter then adds, 'If you find any other charge, &c. has been paid at New Orleans, in order to raise the funds on bottomry; we will pay our full proportion of the same, upon being made acquainted with the amount.' On the same day Messrs. Howell & Son returned an answer, refusing to receive the premium note and check, adding, 'We should do them (the owners) great injustice to make such a settlement. Our opinion is, that in law and equity, they have a claim for a total loss.'

These are the principal facts material to be mentioned; though much other evidence was introduced into the cause upon collateral points, by the parties.

The counsel for the defendants, after the evidence on each side was closed, moved the court to instruct the jury as follows:

Defendants' 1st Prayer.-The defendants, by their counsel, pray the court to instruct the jury that the notice of abandonment of the 22d April, 1833, and the accompanying letter from captain Snow, of the 25th of March, as given in evidence by the plaintiffs, do not show or disclose facts which in law justifies the offer to abandon then made; and therefore, that in the absence of all evidence that said abandonment was accepted by the defendants, the plaintiffs are entitled to recover only for a partial loss.

2. That if the said notice of abandonment was sufficient, still the jury ought to find a verdict for a partial loss only; unless they shall believe from the evidence, that the Gracchus suffered damage from the accident that befel her on the 24th March, 1833, to more than one-half the sum at which she was valued in the policy: and that in estimating said damage, the jury ought to take the cost of her repairs only, deducting one-third therefrom, as in the case of adjusting a partial loss.

3. That if the said abandonment was sufficient, as is assumed in the preceding prayer, still the jury ought to find a verdict for a partial loss only; unless they shall believe upon the evidence, that the damage so sustained by said brig exceeded in amount one-half the sum at which she was valued in the policy; and that in estimating the cost of her repairs for the purpose of ascertaining the amount of such damage, the jury are bound to deduct one-third therefrom, as in the case of a partial loss.

4. That if said abandonment was sufficient, still the jury ought to find a partial loss only, unless they shall believe that the damage as aforesaid was more than one-half the value of the said brig at the time the accident happened, according to the proof of such value as given in evidence: and that in estimating the amount of such damage, the jury are to take the amounts of the general and particular averages as adjusted at New Orleans, deducting one-third from the actual cost of repairs.

But the court refused to give the instructions prayed for, and gave to the jury the following instruction: If the jury find from the evidence, that the Gracchus was so damaged by the disaster mentioned in the letter of captain Snow, of March 25th, 1833, that she could not be got off and repaired without an expenditure of money to an amount exceeding half her value, at the port of New Orleans, after such repairs were made, then the plaintiffs are entitled to recover for a total loss, under the abandonment made on the 22d day of April, 1833; and in ascertaining the amount of such expenditure, the jury must include the sum for which the brig was liable to the salvors, according to the decree of the district court of Louisiana, stated in the evidence: but if the jury find that the vessel could have been got off and repaired, without an expenditure of money to the amount of more than half her value; then, upon the evidence offered, the plaintiffs are not entitled to recover for a total loss, on the ground that the voyage was retarded or lost, nor on account of the arrest and detention of the vessel by the admiralty process, issued at the instance of the salvors.

The defendants excepted to the refusal of the court to give the instructions prayed; and also to the opinion actually given by the court in their instructions to the jury. The plaintiffs also excepted to the same opinion given by the court.

The plaintiffs also prayed 'the court to direct the jury, that in this cause the insured, by their letter of the 22d April, authorized and required the proper expenditures to be made upon the vessel, for which said underwriters are liable under their policy: that no funds being supplied by them in New Orleans to meet this loss; and the salvage and repairs having been paid for by money raised upon respondentia upon the vessel; if the jury shall find that said vessel, under the lien of this bond, came to Baltimore, and the defendants were then apprized of the existence of such respondentia, and were also informed of the existence of the proceedings thereupon against said vessel, and they neglected to pay so much thereof as they ought to have paid to relieve said vessel, and omitted to place her in the hands of the owners, discharged of so much of such bottomry as the underwriters were liable for, and in consequence thereof, said vessel was libelled and condemned and sold, and thereby wholly lost to the plaintiffs; then the plaintiffs are entitled to recover for the whole value of the vessel.'

The court refused to give this instruction, and the plaintiffs excepted to the refusal; and the court signed a bill of exceptions upon both exceptions. The jury found a verdict for the plaintiffs for three thousand four hundred and eighty-nine dollars and twenty-two cents; upon which judgment passed for the plaintiffs. And the present writ of error is brought by the plaintiffs for the purpose of reviewing the instructions above stated, so far as they excepted thereto.

Although the prayers for the instructions by the defendants are not before the Court for the purpose of direct consideration, as the defendants have brought no writ of error; yet it is impossible completely to understand the nature and extent and proper construction of the opinion given by the court, without adverting to the propositions contained in them; for to them, and to them only was the opinion of the court given as a response.

The second instruction asked by the defendants, in substance insisted, that to entitle the plaintiffs to recover for a total loss the damage to the Gracchus from the accident should be more than one-half the sum at which she was valued in the policy; and that in estimating the damage, the costs of the repairs only were to be taken, deducting one-third new for old. In effect, therefore, it excluded all consideration of the salvage, in the ascertainment of the loss.

The third instruction was, in substance, similar to the second, except that it did not insist upon the exclusion of the salvage. In effect, therefore, it insisted upon the valuation in the policy, as the standard by which to ascertain whether the damage was half the value of the Gracchus, or not.

The fourth instruction insisted, that to entitle the plaintiffs to recover for a total loss, the damage must exceed one-half the value of the Gracchus at the time of the accident; and that in estimating the damage, the general and particular averages, as adjusted at New Orleans, were to be taken, deducting one-third new for old. In effect, therefore, it insisted that nothing but these adjustments were to be taken into consideration, in ascertaining the totality of the loss at the time of the abandonment; (admitting the abandonment to be sufficient;) however imminent might be the dangers, or great the losses then actually impending over the Gracchus. And all three of these prayers further insisted, that the deduction of one-third new for old should be made from the amount of the repairs, as in the case of a partial loss; in ascertaining whether there was a right to abandon for a total loss, upon the ground that the damage exceeded a moiety of the value of the vessel.

The jury found a verdict for the plaintiffs for a partial loss, assessing the damages at three thousand four hundred and eighty-nine dollars and twenty-two cents, upon which the court gave a judgment: on this judgment the plaintiffs entered a credit for four hundred and eighty-five dollars and twenty-two cents, the amount of the premium note, and interest. The plaintiffs prosecuted this writ of error.

The case was argued by Mr. Johnson for the plaintiffs in error: and by Mr. Meredith and Mr. Stewart for the defendants.

Mr. Johnson contended that the judgment of the circuit court should be reversed, on the following grounds:

First. That, under the circumstances of the case, the loss of the voyage in which the Gracchus was engaged, by the peril she sustained, entitled the plaintiffs to recover for a total loss.

Second. That the claim for salvage, and the arrest and detention of the brig consequent thereon, entitled plaintiffs to recover for such loss; and,

Third. That the court erred in not granting the prayer in plaintiffs second exception.

It is assumed that the abandonment was sufficient. The defendants objected to its form; that no cause, or a sufficient cause for it was not assigned: but the court decided against these objections.

The instructions of the court, by which the jury were authorized to allow, in the estimate of the loss, one-third of the cost of the new for old, were altogether erroneous. The plaintiffs claimed for a technical total loss, on the state of things at the time of the abandonment. The validity of such a claim cannot be denied, if at that time the state of the facts was such as to justify the abandonment. This was in truth such as to induce the plaintiffs to consider a total loss as inevitable. The letter of captain Snow, of 25th March, upon which the abandonment was made on the 22d of April, 1833; showed that the salvors were about to proceed against the vessel; and stated that they claimed fifty per cent. as their salvage. In 3 Kent's Commentaries, 308, the authorities on the subject of abandonment are summed up.

The value of the vessel was ten thousand dollars; for this sum she was insured. The whole sum received for her was but about four thousand dollars. This is the best evidence of the character of the loss sustained by the assured.

What was the situation of the vessel, from all the information which had been received, on the 23d of April, 1833, when she was abandoned? Was there not imminent danger of actual total loss: attached for salvage, and fifty per cent. claimed; and the voyage broken up and destroyed? The instructions of the court, that the actual amount of salvage ultimately paid, was to furnish the rule to estimate the loss, were erroneous. The probable loss, at the time of the abandonment, is to fix the rule for abandonment. In this the law of insurance in this country, and in England, differ.

The loss of the voyage, by the happening of one of the perils insured against, was a good foundation for abandonment, and for a recovery for a total loss. The vessel was on her home voyage from New Orleans; and was obliged to return to New Orleans by reason of the accident, and the course of the salvors. The voyage was thus broken up. The libel for salvage, and the detention of the vessel for repairs, were destructive of the voyage.

The voyage insured terminated on the 22d of May; and all the injury to the vessel, and the detention consequent to it, were within the period of her protection by the insurance. Had the fifty per cent. claimed by the salvors been paid, no doubt of a technical total loss would have existed; but the master remained at New Orleans, as it was his duty, and to which he was bound by his obligations to the underwriters, to contest this claim; and this detention kept the vessel beyond the six months covered by the policy. Thus the detention was within the policy. Cited 3 Kent's Commentaries; 11 John. 293; 2 Starkie's Rep. 571.

The insurance having been on time makes no difference in estimating her loss. It was an insurance of the vessel on ther voyage, and during the time; and a guaranty that the vessel should have the physical ability, during that time, to continue the voyage.

The detention of the vessel after the accident, gave a full and legal right to abandon. The detention was one of the sea risks insured against, and all legal detentions were within the policy.

It is also contended that the underwriters were bound to pay the bottomry bond executed at New Orleans, for the repairs of the vessel, the salvage, and the expenses. The underwriters were certainly liable to pay the whole of these charges; and by neglecting to do so, the vessel has been sold and taken from her owners. Thus a total loss has resulted.

It is admitted that a detention of a vessel insured, by admiralty process is not a cause of abandonment, when such detention is for some cause not coming within any of the risks of the policy; but in this case, the detention was on account of one of the perils insured against. Thus the loss of the voyage has resulted from one of the perils insured against.

Mr. Stewart and Mr. Meredith for the defendants, denied that there was any error in the instructions of the circuit court.

Insurance is a contract for indemnity; and this contract is fully carried out by the verdict of the jury. The jury have given the plaintiffs all they paid as salvage, and all the costs and expenses of the repairs consequent to the injury sustained by the vessel. But it is contended, by the plaintiffs, that the adventure in which the vessel is engaged, the voyage, and its results, upon which the vessel is proceeding, is a part of the contract for protection by the underwriters. This is not the nature of insurance. The underwriters are only liable for the perils insured.

Assuming the principle to be, in the United States, that underwriters are liable for the state of the loss at the time of the abandonment; there was no ground for the abandonment when the letter from captain Snow was received. The circumstances stated in that letter do not warrant the allegation that technical total loss had occurred. The vessel had suffered injury; she had been rescued from greater loss by the steamboat; she had been carried to New Orleans, and fifty per cent. was claimed as salvage; but the justice of this claim was denied, and it was to be contested.

With this letter, the insured and the underwriters were in possession of all the facts, and the claim of fifty per cent. as salvage, must have been seen to be unreasonable and unjust. It exceeded the usual charge for the use of a steamboat on the Mississippi, which was known to be at the rate of ten dollars per day. There was not then, a probability that a technical total loss existed at that time; and subsequent circumstances showed that no loss, for which the assurers were liable, had occurred to the extent of fifty per cent. on the value of the vessel. If the appearance of events, when the letter from captain Snow was received, authorized the expectation that the loss would amount to fifty per cent.; the underwriters have a right to look at subsequent circumstances, to decide what was the real condition of the vessel at that time.

The Court will find, by a reference to the whole of the facts in the case, there was no foundation for the claim for a technical total loss. No damage had been sustained, which would support such a claim.

The whole cost of the repairs of the vessel, and the amount of salvage allowed by the court, amounted together to two thousand nine hundred and thirty-five dollars. The orders for insurance show that the Gracchus was valued at ten or twelve thousand dollars. At New Orleans, the Gracchus was worth eight thousand five hundred dollars. The captain was offered that sum for her; and he said he would take nine thousand dollars. Thus she was worth at New Orleans and at Baltimore nearly the same sum, and there was no approximation to half of her value by the actual loss.

To proceed to the points made for the defendants in the circuit court.

The court instructed the jury, on the points submitted by the defendants.

If the jury find from the evidence that the Gracchus was so-damaged by the disaster mentioned in the letter of captain Snow, of March 25th, 1833, that she could not be got off and repaired without an expenditure of money to an amount exceeding half her value, at the port of New Orleans, after such repairs were made; then the plaintiffs are entitled to recover for a total loss, under the abandonment made on the 22d day of April, 1833; and in ascertaining the amount of such expenditure, the jury must include the sum for which the brig was liable to the salvors, according to the decree of the district court of Louisiana, stated in the evidence; but if the jury find that the vessel could have been got off and repaired without an expenditure of money to the amount of more than half her value, then upon the evidence offered the plaintiffs are not entitled to recover for a total loss, on the ground that the voyage was retarded or lost, nor on account of the arrest and detention of the vessel by the admiralty process issued at the instance of the salvors.

The question was whether the amount of repairs, and the salvage was half the value of the vessel at New Orleans, giving the assured the benefit in the estimate of the amount of the salvage. Is this an open question in this Court? The policy expired on the 22d of May, 1833. How far is this point settled in the case of Alexander v. The Baltimore Insurance Company? 9 Cranch, 370; 2 Cond. Rep. 143.

In that case Mr. Chief Justice Marshall says, that it has been decided that the state of the fact must concur with the information to make the abandonment for a technical total loss effectual. Cited, also, Ambler's Rep. 214; Ch. Justice Wills' Reports, 641, 644.

As to how this question has been considered in England, cited 2 Maule & Selwyn, 240, 247; Idem. 278, 286, 290, 293; 4 Maule & Selwyn, 393; 5 Maule & Selwyn, 47; Goss v. Withers, 2 Burrows, 67; Hamilton v. Mendes, Burrows, 1212.

The perils in the policy do not include the loss now set up by the plaintiffs; and there is no express assumption to insure against the kind of detention for which the loss is now claimed. It must be derived from implication, and must be a consequence of the contract between the parties to the policy of insurance.

There was no evidence in the case that the underwriters had been called upon to pay the bottomry bond and prevent the sale of the vessel; nor was any demand made on the underwriters to pay for the repairs of the vessel. The assured claimed a total loss, and did not proceed as if they held the underwriters liable to any thing but the whole amount of the policy. Cited, Da Costa v. Newnham, 2 Term Rep. 407; 2 Barnwell & Ald. 513; 3 Mason's C. C. R. 429.

It is denied that the assured have a right to abandon as for a total loss upon a mere probability of a loss which will exceed fifty per cent. This view of the rights of the assured rests only on the suggestion of Lord Ellenborough. There must be a certain subsisting loss when the abandonment is made, exceeding fifty per cent.

It is not admitted that the right to abandon for breaking up of a voyage applies to an insurance on time: Hughes on Insurance, 300, 311, 314: Smith on Mercantile Law, 17 vol. of the Law Library, 143. The insurance on time is that the vessel shall be able to prodeed on the voyage during the time, and to pay the damage she may sustain during that time. It is no contract for the voyage, or against interruptions which rest upon it, other than such as are wihin the perils insured against. 1 Johns. Cases, 293, 294; 5 Serg. & Rawle, 501; 2 Taunton, 362.

This voyage was not broken up or defeated: and the jury have found that the injury sustained by the vessel did not amount to fifty per cent. of her value. The finding of the jury is conclusive on this matter.

The arrest and detention of the vessel by admiralty process for salvage, did not furnish grounds for the abandonment. The vessel remained in the possession of the captain. It was a mere obstruction of the voyage, or a detention of the vessel, which might have been removed, and for which the captain was bound to relieve her. He had, as has been stated, the means to do this; there was no evidence to show that he made any exertions to do this. Cited 2 Wash. C. C. R. 331; 3 Kent's Commentaries, 304. There is no special claims in the policy which includes the loss, and it must then come within that which proceeds against perils of the sea. But by no reasoning can the loss be made to amount to fifty per cent. from perils of the sea. Cited 5 Maule & Selw. 434; 3 Mason, 437. Cited, also, 21 Serg. & Lowber's English Com. Law Rep. 41.

Mr. Justice STORY delivered the opinion of the Court:

Notes