Morean v. the United States Insurance Company

• Decision Date: 11 March 1816
• Citation: 4 L.Ed. 75,1 Wheat. 219,14 U.S. 219
• Parties: MOREAN v. THE UNITED STATES INSURANCE COMPANY
• Court: U.S. Supreme Court

14 U.S. 219

4 L.Ed. 75

1 Wheat. 219

MOREAN v. THE UNITED STATES INSURANCE COMPANY.

March 11, 1816

ERROR to the circuit court for the district of Pennsylvania. This was an action commenced by the plaintiff in error, upon a policy of insurance dated the 14th of December, 1812, on goods on board the brig Betsey, at and from Cape Henry to Lisbon, at a premium of six per cent., on which 5,000 dollars were underwritten by the defendants, and valued at that sum, declared to be against all risks, except British capture, warranted American property. The jury found a verdict for the plaintiff, subject to the opinion of the court upon the following facts agreed by the parties. The cargo consisted of 4,406 bushels of indian corn, 100 barrels of navy bread, and 20 barrels of corn meal. The brig sailed from Baltimore on the 11th of November, 1812, and from Cape Henry on the 13th of the same month. She experienced, on the voyage, many and severe gales of wind. On the 18th of December, she passed the rock of Lisbon, and came to anchor about four miles below Belem Castle. She leaked considerably in consequence of the injury she had sustained from the severe gales to which she had been exposed. After passing the rock the wind died away, and the current being adverse, she came to anchor. The master and supercargo landed, went through the customary forms at Belem to obtain a permit to pass the castle, and then proceeded to Lisbon. The health boat visited the brig, and ordered her to get above the castle as soon as possible. On the 19th, she was again exposed to a heavy and fatal gale, and drove ashore near to Belem Castle, the sea breaking over her, and the crew hanging by the rigging to preserve their lives. The supercargo considered both vessel and cargo as totally lost. By directions of the custom house, as much of the cargo as could be got out, was unladen by a number of French prisoners who were employed for that purpose. The cargo was all wet, and the part of it which was then taken out was carried to the fort, where it was spread and dried. From thence it was carried to Lisbon in lighters, and was sold in the corn market by the consignee of the cargo. The quantity so saved and sold amounted to about 1,988 bushels, which was sold at 50 cents a bushel, whereas the price of sound corn was 2 dollars and 25 cents a bushel. The supercargo petitioned for liberty to sell the corn at the place where it was first deposited and dried, which could not be granted, and he was obliged to submit to the custom of the place, and allow it to be sold at the corn market.

The brig was so completely wrecked, that she was sold, with her materials, where she lay, in lots. Had the supercargo been left to the free exercise of his own judgment, he would not have attempted to save any part of the cargo, in consequence of the total damage, and the great expense of saving it. The net proceeds of the cargo were not much more than the expenses of saving it, including those of the supercargo. The port of Lisbon commences above Belem Castle, and the custom of the place is to discharge cargoes of corn between that castle and Cantara, which latter place is from one to two miles below Lisbon. The vessel never arrived at her port of discharge. On the 22d of December she was entered at the custom house by the American vice consul, which he said was necessary; but port dues do not attach to vessels till they pass the castle. Still, as part of the cargo was carried to Lisbon, the entry was made by the consul, and the dues were paid. On the 11th of March, 1813, the plaintiff, having received notice of the shipwreck, offered to abandon, which was refused. Upon these facts, the circuit court gave judgment for the defendants, and the cause was brought by writ of error into this court.

Pinkney, for the plaintiff. By the shipwreck, and breaking up of the voyage, the plaintiff was entitled to abandon; and there is no distinction in law in this respect between memorandum articles and general articles. The wreck disabled the ship from transporting the commodity, and the insured was not obliged to find another vehicle to carry it on. Here more than a moiety of the thing insured was annihilated, to say nothing of the deterioration of the rest. By the contract, it became the duty of the agent of the insured, to labour about the thing; and, if the wreck and consequent damage justified the right of abandonment, what effect can the conduct of the supercargo have? The subsequent transportation can have no effect on the right of abandonment: the supercargo was compelled to carry it on by the Portuguese government for the supply of the capital. The law holds, that the insured shall not abandon in the case of memorandum articles upon deterioration merely. This is not a mere technical total loss; it is the same thing as if the waves of the sea had washed this portion of the cargo up to Lisbon. The usage of the government, in compelling a sale in such cases, must have been equally known to both parties, and ought to operate equally on both.

Harper, contra. 1. A distinction is here attempted to be taken, on account of the nature of the peril by which the loss was occasioned. But the law prescribes, that the insured must carry on memorandum articles, if possible, in another vehicle. No degree of injury, short of total destruction, will justify the insured in abandoning without making an effort to carry on the articles; and their actual arrival at the port of destination, no matter how, prevents abandonment.^a Our policies contain no stipulation similar

^aMarshall on Insurance, Condy's ed. 223. and the cases there cited to those in the English, as to 'stranding of the ship,' in the case of memorandum articles. Wreck cannot help the insured, where the consequence is the destruction of the voyage only, without the actual destruction of the thing. The right of abandonment exists, while the peril of total loss exists; but when the article is saved from that peril, the right no longer exists.^b 2. The right of abandonment was not exercised in due time; not until after the peril had ceased. Memorandum articles may be abandoned while they are submerged, or the hand of the enemy is upon them; but here the loss of the voyage was repaired by other means found to carry on the goods before the abandonment is made.^c They were transported, not by violence, but according to the usage of the country; and the parties must be considered in law as having assented to this usage.

Pinkney, in reply. If the insured was not obliged to carry on the commondities, and he would have had a right to abandon at the time, nothing subsequent has devested it. The sole object of the memorandum clause is to exempt the insurer from liability for deterioration only, and the reason was the inherent tendency of these articles to decay. The destruction of the vehicle, and the destruction of the greater part of the things transported, justified

^b Sheiffelin v. The New-York Insurance Co. 2 Camp. N. P. Cases, 623. Wilson v. The Royal Insurance Co. 7 East, 88. Anderson et al. v. The Royal Insurance Co.

^c Ibid. the abandonment. None of the cases cited apply to this case; and the insurer knew of the usage as well as the insured. If this case be determined not to be a case justifying abandonment, on account of the saving of so small a part, what case of abandonment of memorandum articles can exist? The abandonment was in time, because made in good faith, and as soon as the insured knew of the peril.

March 11th.

WASHINGTON, J., delivered the opinion of the court, and, after stating the facts, proceeded as follows:

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. These principles are clearly established by the case of Mason v. Skurray,^d Neilson

^dAt. N. P. 1780. Park, 116, Marshall, Condy's ed. 223 v. The Columbian Insurance Company,^e Cocking v. Frazer,^f M'Andrews v. Vaughan,^g Dyson v. Rowcroft,^h and Magrath and Huggins v. Church.ⁱ 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; every thing like a promise of indemnity against loss or damage to the cargo being excluded from the policy. If the question turn upon the totality of the loss, unconnected with the subject of loss by deterioration of the cargo in value, or reduction in quantity, there is no difference between memorandum and other articles. If the loss be total in reality, or is such as the insured is permitted to treat as such, he is entitled to abandon and recover as for a total loss in the case of memorandum articles, but always with this exception, that he is not permitted to turn a partial, into a total loss. Keeping this distinction in view, the loss of the voyage by capture, shipwreck, or otherwise, may be treated as a total loss. This is the doctrine in the case of Dyson v. Rowcroft, in which the right to abandon was placed, not upon the ground of deterioration of the cargo, but...