Lapsley and Ikin against Pleasants, President of the United States Insurance Company

[Philadelphia, Saturday, July 18, 1812.] *Lapsley and Ikin against Pleasants, President of the United States Insurance Company. The owner of goods lost by jettison, is not entitled to abandon to his underwriters, and to turn over to them the claim for contribution upon the other proprietors of the cargo, &c., but must in the first instance resort to the other proprietors himself. Case for the opinion of the Court. “The plaintiffs insured with the defendant 12,000 dollars on goods on board the ship Herkimer, at and from London to New York, in an open policy. They had laden on board the said ship two hundred and three cases, seven trunks, and two bales of merchandise, the invoice value whereof was 23,882i. 12s. id. sterling, being at par of exchange equal to 103,819 dollars 63 cents. On the voyage insured, the ship encountered very severe gales and weather, in consequence of which, and for the preservation of the remainder of the cargo, and of the lives of the crew, a great part of the cargo was thrown overboard, and of that which remained much was damaged. The ship put into New London, and afterwards arrived at New York, where she delivered that part of her cargo which remained on board. Of the plaintiffs’ goods, 169 cases, the invoice value of which was 18,805i. 17s. 7d. stei’ling, being at par of exchange equal to 83,498 dollars and 10 cents, were thrown overboard; forty-four cases only arrived at New York. Of the forty-four which arrived at New York, seventeen were damaged, and the whole were sold at auction under the inspection of the wardens of the port. The invoice value of the twenty-seven sound cases which arrived, was 26091. 18s. 7d. sterling, being at par of exchange equal to 11,588 dollars and 11 cents. The invoice value of the seventeen damaged cases was 19661. 16s. 2d. sterling, being at par of exchange equal to 8732 dollars and 64 cents. The net amount of sales at auction of the twenty-sevexx sound cases was 12,287 dollars 63 cents, and of the seventeen damaged cases 8298 dollars and 30 cents. “ At New York an adjustment of the general average was made by John Eerrers and John Delafield, by which the goods of the plaintiffs were stated to pay 41,320 dollars and 75 cents. (About 36-J per cent.) *“ ^Pon jettison the plaintiffs, after the arrival at New York, made their abandonment to the defendant, and claim to recover for a total loss. “ The question now submitted to the Court is, whether the plaintiffs are entitled to recover from the defendant as for a total loss. “ If the Court shall be of opinion that the plaintiffs are entitled to recover for a total loss, judgment is to be entered for the plaintiffs, and the amouut to be adjusted by the attorneys. “ If the Court shall be of opinion that the plaintiffs are-, not entitled to recover for a total loss, it is then submitted to them to decide, whether in the adjustment of a partial loss, the plaintiffs, upon the facts stated, are entitled to recover for the loss sustained upon the damaged goods; in other words, whether the five per centum, to which by the policy the loss must amount in order to charge the defendant, must be five per centum of the whole adventure insured, or whether it is sufficient in this case if it amounts to five per centum upon the forty-four packages landed at New York. If the Court shall be of opinion that the plaintiffs ax*e entitled to recover for the loss sustained upon the damaged goods, judgment to be entered for the plaintiffs, and the amount to be settled by the attorneys. But if the Court shall be of opinion that the plaintiffs are not entitled to recover more than the amount of the general average, judgment to be entered for the defendant, reserving a right to the plaintiffs to any balance due for the general average, which the attorneys may on examination of the accounts find to be just.” Ghauncey and Ingersoll for the plaintiffs. The only question for the Coui’t, is whether upon a jettison of between seventy and eighty per cent.' of the. plaintiffs’ goods, they were entitled to abandon and recover as for a total loss. The general principle cannot be contested, and if more than a moiety of the goods insured are lost, the adventure is in ^contemplation of law frustrated and broken up, and the assured may substitute the insurer in his place by abandonment. It is necessary then to raise some distinction between this and the common case. This is a case of jettison. Jettison is a peril in the policy, and its effects being precisely the same upon the adventure, as any peril of the sea operating to the same extent, so must they be the same upon the contract, and upon the rights of the assured under it. Jettison at least physically destroys the property insured. It mutilates the adventure, so that what is left loses its value. It defeats all those calculations upon the market, which the assured has a right to make, and which the insurer guarantees, so far as he guarantees the safe arrival of the whole adventure. Certainly if the whole adventure were lost by jettison, it would be an actual total loss; it follows necessarily then that there is nothing in the peril that creates a difference, and that there may be a technical total loss by jettison and a proper abandonment, as well as an actual total loss. But an objection is raised upon the ground, that the assured has a remedy from the other shippers for all above the amount of his own contribution, and therefore that he must look to them. There are many reasons against this. In the first place he has no efficient remedy. He has not even a lien upon the goods, for a lien depends upon possession of the party who claims it, and the person whose goods are thrown overboard, has no possession. It is the master and owner of the ship, that have the lien; and although the latter is bound by the maritime law to adjust the contribution, and to hold the goods until it is satisfied, 2 Marsh. 544, 5, yet where is the remedy of the assured if he does not? The power even of the master is a very imperfect one; for it is no where stated, that he has authority to sell if the contribution is not paid. The only remedy which the assured personally has, is a bill in equity or an action at law, as in Birkley v. Presgrave, 1 East 220, against all the other shippers, or against each separately; and before the suit is terminated, the parties may be insolvent. But if he had a remedy, this does not deprive him of recourse to his underwriter. He is ^'entitled to have his capital restored promptly; and all that the underwriter can ask of him in return, is to cede his rights of action against the other shippers. There is no principle which renders it necessary for the assured to make even a demand of those shippers in the first instance, that will not, if properly followed up, compel him to prosecute a suit against them to its final conclusion; nay, that will not deprive him of recourse to the underwriter even then; -for how can it be contended that he is bound to sue for the underwriter? And it is but suing for the underwriter, if in the end the latter must answer. If then the question were now to depend upon reason merely, it would be impossible to suggest a sound distinction between a loss by jettison and any other peril, or to prevent the application of the common rule. Roccus it is true thinks it is not a cause of abandonment; but his reason, that the assured has another remedy, we have shown to be fallacious. Roccus 125, note 62. In opposition to this too, is the decisions of the Supreme Court of New York, in Magrath v. Church, 1 Caines 196, confirmed in Judah v. Randal, 2 Caines in Er. 324 ; Vandenheuvle v. United Insurance Company, 1 Johns. 406 ; Moses v. The Columbian Insurance Company, 6 Johns. 219; and Watson v. The Marine Insurance Company, 7 Johns. 57. So that in that state the law is completely settled. In the same way is the law received in the state of Massachusetts. Amory v. Jones, 6 Mass. Rep. 318, 321. The authority of two such courts’ must be of great weight under any circumstances; but supported by so much reason as they obviously are, their effect upon this case must be decisive. So great moreover is the convenience of uniformity of decision among the states, that this alone should have some influence upon the deliberations of the Court. In fact the argument of the opposite side, must be, that the loss of the plaintiffs was not 70 or 80 per cent., but only the amount of the general average, namely 36J per cent. But this is not a practical but a metaphysical az’gument; it goes upon the supposition that the goods thrown overboard, *or all above 36J per cent, of the invoice insured, continued in point of law to l’emain in the vessel, becanse the owner might look to the other goods for an indemnity. This is not enough. The owner of the goods loses them in fact, and gets a right in law in the place of them. The contract of insurance guarantees to him the arrival of his goods in fact, and if they are taken, and a mere right substituted in their place, he may as in many other cases abandon the right, and call for an indemnity in consequence of not having his goods. JBinney for the defendant. The material facts are, that more than 50 per cent, of the plaintiffs’ goods were thrown overboard, and the rest arrived at the port of destination, part damaged and part sound, but the damage not amounting to 5 per cent.; the plaintiffs’ contribution to general average was only 36J per cent., and he has received the difference between that amount and the jettison without prejudice. The question is, had he a right to abandon ? There is no doubt that he will get a complete indemnity by payment of a partial loss; but he claims a right to throw a bad market upon us, by forcing us to become the purchasers of the goods. I contend that the abandonment is not good, 1. Because where the goods or a part have arrived at the port of destination, a damage of 50 and more per cent, does not justify abandonment. 2. Because where a part of the goods have arrived in a sound state at the port of destination, there can be no abandonment. 3. Because in a case of jettison, the assured must look in the first instance to the other shippers, for the difference between his own contribution, and the whole jettison, and cannot abandon to the underwriters. 1. A policy of insurance is not a contract of gain, or speculation, but of indemnity; all its rules are rules of indemnity; and the insurer ought never to pay less upon such a contract, nor to gain- more, than an indemnity. Lewis v. Rucker, 2. Burr. 1214; Park 195, 211. What then will'give an indemnity in the present case ? Certainly a partial loss; that is, it will put the assured precisely in the same state, as if all had *arrived sound. If part has so arrived, he will get the difference between this and the whole arriving sound. If part are damaged, he will get the difference between this, and the value of a like part had it arrived sound. In both cases the proportion of loss must be applied to the invoice price, or value in the policy, and then whether the market is high or low, and whether the loss be 50 or 70 per cent, it is the same thing. This therefore is all that the assured is entitled to ask, when the goods have arrived at the port of delivery before abandonment. If however the goods are at an intermediate port where the damage is ascertained, this mode of settlement may not be an indemnity. They are not yet arrived where it is the business of the underwriter to carry them, and before they get there the average may very much increase. The prosecution of a damaged adventure also may not be worth the trouble of the assured; and in such a case he is entitled to say to the underwriter, pay me the loss; if you choose to prosecute a damaged adventure, it is in your power by my abandonment. The original vessel or another may be had to carry it on. In a common case it would be my duty to send it on; but the adventure is damaged so much, and the issue of it is so uncertain, that I turn it over to you. It is to such a case that the rule of the Guidon applies; not to a loss exceeding 50 per cent, ascertained at the port of destination ; and although no case precisely in point can be found, yet wherever this rule is spoken of, such qualifications are added, as show that a defeat of the adventure is the effect of the damage to which it refers. Park evidently applies it to the case of a voyage not performed. Park 194. “The right to abandon must arise upon the object of the insured being so far defeated, that it is not worth while to pursue it; such a loss as is equally inconvenient to him, as if it had been total.” Emerigon takes the same view of it. 2 Emerig. 173, 4. Lord Mansfield’s reasoning upon the rule in Goss v. Withers, 2 Burr. 683, is founded upon the same state of things. He refers to the rule of the Guidon, as authorizing an abandonment upon a capture, or any other such disturbance as defeats the voyage, or makes it not worth while, *or worth the freight to pursue it; and among such disturbances the Guidon mentions damage exceeding 50 per cent. His reasoning in Mills v. Fletcher, Doug. 219, is the same. Marshall understands it in the same manner. 2 Marsh. 571. In fact it is impossible that any one should ask for the application of the rule at the port of destination, but for one of two reasons, that he has valued too high, or has come to a bad market; and these, as was said in Lewis v. Rucker, are conclusive to show that he should not be permitted to abandon. 2. The interpretation of this rule on the second point, has the sanction of express authority. If part of the goods arrive in a sound state, there can be no abandonment. “ This rule,” says Yalin, speaking of that branch of the rule of Le Guidon which permits abandonment where the damage exceeds a moiety, “ applies only to merchandise really damaged by water, or other peril of the sea, and which has either remained in the ship, or been saved upon the waves, and not where a part has been lost by jettison, fire, pillage or otherwise, and the residue has been saved without any damage.” 2 Valin 101; Seton v. The Delaware Insurance Company, 2 Condy’s Marsh. 562, and Hart v. The Delaware, 2 Condy’s Marsh. 562, are to the same point. 8. But no abandonment can be made in case of jettison.The question is what is the loss according to the maritime law, and the law of insurance. In the policy, jettison is the generic name for loss by general average, and does not merely include the goods thrown overboard. No argument therefore can be drawn from the use of the words. Interpret it as you may, still the question recurs, what is the loss by jettison; and no doubt according to the maritime law, the loss is what the owner himself has to pay or absolutely lose, that is, his contribution. Marshall is in point. 2 Marsh. 546. An ancient authority is explicit to the very question before the Court. “ "Where goods are thrown overboard to lighten a vessel in a storm, are the insurers bound to indemnify the owners for the loss of such goods ? They are not; because among all those who have property in the ship, a contribution is made to pay the value of the goods thrown *overboard to their owner. But the insurers are bound to make good that rate ox proportion, which has fallen upon the assured in the contribution among all the owners of property in the ship.” Roecus 126 ; note 62,148 note 92. Marshall recognizes, and adopts this doctrine. 2 Marsh. 547. Park does the same, and says it is agreeable to the laws of all the trading powers on the continent of Europe, as well as to those of England. Park 179. In law all the goods owned by the assured are deemed to arrive, and are paid for accordingly by the other shippers, except his proportion of the general average. Abbot 228. The goods are pledged for the payment, in the same manner as the freight. Abbot 296; Molloy 8. And it would be most inconvenient, if the assured could devolve in the first instance upon the underwriter, the duty of obtaining this payment,.under the inconvenience, when to him the inconvenience would comparatively be little. The cases in New York are the only authority against us; and those cases all flow from Magrath v. Church, in which there is no notice taken of the authorities now cited, and there is apparently some misapprehension of the practice in England, in consequence of misunderstanding a remark of Mr. Abbot in page 296. I understand him to say, that the average is paid in the first instance by the underwriter, that is to say the contribution, not the jettison as is now contended. The case from 6 Massachusetts Reports, is a case in which the point was not made. In reply, it was said that the remark of Valin applied only to a case in which insurance was effected upon distinct bales or boxes of a cargo, where some were lost, and the rest saved ; not to a case of an entire insurance like the present, upon many bales; and in opposition to Roccus, Park, and Marshall, was cited Pothier h. t. n. 52, 165, who was said to outweigh them all. This question it became necessary to decide, as it was found upon calculation that the damage did not amount to five per cent, on the forty-four packages. [MAJORITY — Tilghmaít O. J.] Tilghmaít O. J. This is an insurance on goods on board the ship Herkimer at and from London to New York. In the course of the voyage, the ship being in distress, part of the plaintiffs’ goods, to the amount of more than one half, were thrown overboard for the preservation of the remainder °^' *^e carg°5 an(l of the lives of the crew. Of the residue of the plaintiffs’ goods, part was found to be in a good condition on the arrival of the ship at New York, and part damaged, but not to the amount of five per cent., in which case, by the terms of the policy, the underwriters are not liable. On the adjustment of the general average, the loss was about 36J per cent. The plaintiffs abandoned, and claimed for a total loss, and the question is whether they are entitled to recover for a total loss. There is no doubt but a loss occasioned by jettison, is within the words and meaning of the policy. But what is the loss? The plaintiffs answer the whole amount of the goods thrown over. The defendants say, no; the real loss is, that part of the value of the goods thrown over, which is not restored to the plaintiffs by a contribution from those persons whose property was saved by the jettison. The argument on the part of the plaintiffs is, that as the loss has happened by one of the perils insured against, they have a a right to look immediately to the defendants, who after having paid the whole loss, may place themselves in their situation, and recover the contribution to which they were entitled. I am not satisfied with this course of proceeding, which seems i’ather to invert the natural order of things. The defendants are undoubtedly answerable for the loss occasioned by the jettison, and it is equally clear that the plaintiffs have a right to receive contribution from the other persons whose property was saved. If the value of the plaintiffs’ goods is one hundred dollars, and they receive seventy dollars by way of contribution, the loss is only thirty dollars. It seems reasonable, that he who is entitled to receive the contribution, should in the first instance apply for it. If it should be lost, without any fault of his, the underwriter is answerable. It does not appear that the plaintiffs ever applied to the persons hound to contribute, or that there was the least difficulty in procuring payment from them. One cannot help asking then, why the plaintiffs should so pertinaciously insist on resorting to the defendants in the first instance. If indemnification for their loss is the object, what is the difference whether they receive it from the defendants or other persons? I can find no satisfactory answer to this question, but by supposing *that bare indemnification will not satisfy the plaintiffs. Their object must be to make gain by abandoning-to the defend*ants, and thus producing a constructive total loss, whereby the defendants will be involved in the state of the market at New York. I am not disposed to assist them in this attempt, unless it can be clearly shown, that they have the law in their favor. Let us see then how the authorities stand on this subject. Ve have the decided opinion of Roccus, that the insurers are not to be resorted to in the first instance. This opinion is cited and asserted to be the law by Park and Marshall, the two best of the English elementary writers. It would seem to be Pothierls opinion, that if the contribution is not paid at the end of the voyage, whatever may have been the cause of non-payment, the underwriter is liable for the whole value of the jettison. Marshall having mentioned this opinion, makes the following remark. “ I cannot approve of this practice, as it permits an abandonment in a case where there can only be a partial loss.” It is not always easy to determine, whether the opinions of the French authors is founded on principles of general law, or on their own law, particularly the ordinances of Lewis the fourteenth. If this case however were to be decided by those ordinances, the plaintiffs would gain nothing by it; for Valin, vol. 2, p. 101, lays it down that the insured cannot abandon, where part of his goods is lost by jettison, and part preserved without any damage. The counsel for the plaintiffs have cited and relied upon the cases of Amory and Co. v. Jones, 6 Mass. Rep. 318, and Magrath v. Church, 1 Caines New York Term Rep. 196. In the first of those cases, it does not appear that this point was brought distinctly before the court. There was a general average of small amount. Chief Justice Parsons says, “the plaintiffs may recover this small average loss,”—the reporter adds, “ after this opinion was given, the general average was compromised by the parties.” I cannot perceive that a question was made in that case, whether thé plaintiff was entitled to recover the whole amount of the jettison from the defendants. It is not touched either by the counsel or the court. The case of Magrath v. Church is to the point, and I should have been glad if I could have seen clear reason for agreeing with if- I am *sensible of the convenience of uniformity of decision in the United States, and no man has a higher respect than myself, for Chief Justice Kent, and the Supreme Court of New York. But it does appear to me, that a departure from the ancient rule may be attended with inconveniences greater than those which will result from an adherence to it. I observe that Chief Justiee Kent grounds his opinion in part on the English practice, for which he cites Abbot 296. With great deference, I rather think that according to Abbot, it is not the practice to apply to the insurer’s of the goods lost by the jettison, for the whole amount of that loss, but that the custom is, for the different underwriters on the goods subject to the average, to pay the amount of the respective contributions. His expressions are these, “ it is usual for the broker who has procured the policy of insurance, to draw up an adjustment of the average, which is commonly paid in the first instance by the insurers without dispute. In case of dispute, the contribution may be recovered either by a suit in equity, or an action at law, instituted by each individual entitled to receive, against each party that ought to pay, for the amount of his share.” If my construction of Abbott is right, the practice in England is, according to the law as laid down by Roccus, Park and Marshall; that is to say, the first resort is had to the persons liable to contribution, or what is the same thing, to their insurers. It is unnecessary to decide, what steps are to be taken by the assured to recover the contribution before the underwriters shall be liable for the whole loss, or whether on refusal to pay the contribution, the demand against the underwriters is to be suspended, until the end of the suits brought for the recovery of it. It is sufficient for the present to say, that there should be a demand made from the persons bound to contribute, and some reasonable endeavor to procure payment, and that the insured has not a right in the first instance to make an election, whereby a loss partial in its nature, is by construction rendered total. .1 give no opinion on some other points ingeniously suggested by the counsel for the defendants, and well worthy of serious consideration. Judgment for the defendant. [The other judges concurred for the reason assigned by the Chief Justice.]