CHAPTER XVII. fined. TOTAL LOSS AND ABANDONMENT. Section 1. In what cases Abandonment is necessary in order to give a Claim for a Total Loss. A TOTAL LOSS is one by which the underwriter is liable to pay Total loss de- for as much of the subject as he insures, at its value in the policy. In adjusting the amount of a total loss, the only question is, what is the value of the subject in the policy. In a partial loss the underwriter is not liable to pay the entire value, as such, at which the subject is insured, and to the amount insured. In adjusting a partial loss it is always necessary to inquire, not merely what is the value of the subject in the policy, but also what is the rate or degree of damage. Abandonment may be made in case of to tal loss. (1) Park, 228. n. ; 8 Johns. 246. (2)2 Johns. 155. Technical or constructive total loss. A total loss gives the assured a right to abandon. An abandonment is an act on the part of the assured, by which he relinquishes and transfers to the underwriters his insurable interest, as far as it is a subject of the policy, or the proceeds of it, or the claims arising from it. In considering what circumstances give the assured a right to abandon, we shall necessarily consider what constitutes a partial, and what a total loss. Where the assured has no right of property, as in the life of a person on whom he depended for support; and where the subject is so completely destroyed and lost, that the assured has no rights, or claims, or advantages, in consequence of his property in it, as in the case of goods consumed by fire, or a lottery ticket that has drawn a blank, it is not requisite that he should go through with any form of transferring his interest to the insurers, or make any offer to this effect.(1) In case of the 'destruction of the whole subject, the ceremony of abandonment would be idle.'(2) The thing insured being irretrievably lost, the assured has a right to recover the value at which the whole or any part of it was insured; and the amount recovered will be the same whether the loss be treated as partial or total,-whether the inquiry be what value was insured merely, or that, and also what is the amount of damage, for they are both the same amount. But if the property or any part of it survives the peril, as in case of shipwreck, without a total destruction of the thing insured, or of detention or capture before condemnation; or if any rights or claims remain to the assured as owner of the property, as in case of a claim for remuneration of damage against those who have seized the property, it is just that he should transfer to the underwriters the remains of the property, or the rights accruing to him as owner, in case of his receiving of them 608. See also the amount insured. Losses of this description are called technical or constructive total losses, in which an abandonment ought (1) 1 T. R. to be made, in order to give the assured the right of recovering Martin v. the entire value insured. Where any part of the property has Crockatt, 14 been saved, the assured cannot recover as for a total loss, unless East, 465; he abandon.'(1) Tunno v. Edwards, 12 Mr. Justice Buller intimates a doubt, whether abandonment East, 491. should have been permitted at all, and says, that about the Whether the year 1745 that question was determined, after much delibera- right of aban tion."(2) But in cases of capture and detention, insurance would donment is to afford a very inadequate indemnity to the assured, without the be favoured. right to abandon, and in many cases of sea-damage, the indem- (2) Mitchell nity would be long delayed and very difficult to adjust. Lord. Edie, 1 T. Mansfield said, 'in late times the privilege of abandonment has been restrained for fear of letting in frauds.'(3) R. 608. (3) Goss v. Withers, 2 Burr. 683. Mr. Justice Story says, on the contrary, It has been said, that abandonments are not to be favoured; that they have been liable to great abuses; and that courts of law are not disposed (4) Peele v. to enlarge the practice. I am very much inclined to believe Merch. Ins. that of late years this consideration has had quite as much weight S. Mass. Oct. as it deserved.'(4) Co. C. C. U. 1822. 2 Ma not. The assured has his election in all cases, whether or not to son. ** make abandonment; ' all the books agree that he is never obliged The assured to abandon.'(5) The object of abandonment is to turn that has an elecinto a total loss which would otherwise not be so;'(6) and the tion whether assured may choose whether he will change the character of to abandon or his claim against the insurers by making an abandonment. In some cases however, he will have no claim against the insurers unless he makes an abandonment; in others he may recover for a partial loss, without abandonment, or abandon and recover for a total loss. abandonment In a case of seizure of the vessel of which freight was insu- The ship bered, and an action brought by the assured without any abandon- ing stranded ment, Chancellor Lansing said, 'The assured, by his delay, has and sold no waived his right of abandoning, so far as might operate to con- of freight is vert a partial into a total loss, and has left the insurer the chance considered of enjoying any advantage, arising from the restoration, before necessary. the time of bringing his action.' But as the loss continued to be (5) 8 Johns. total at the time of bringing the action, he thought the assured 244; Allwood might recover.(7) v. Henckell, Park, 280; 1 Burr. 1211. In case of the insurance of freight from Quebec to London, Johns. Cas. the ship, before leaving the river St. Lawrence, was stranded 313; 2 Johns. about 90 miles below Quebec, in so dangerous a situation that Cas. 250; 2 the captain was held to be justified in selling the ship and car- (6) Gracie v. go, without making any attempt to get the ship off for the pur- N. Y. Ins. Co. pose of prosecuting the voyage. On receiving intelligence of 8 Johns. 183. the disaster the assured communicated it to the underwriters, Smith v. Steinback, 2 and claimed a total loss, but did no act which was considered Caines' Cas. by the court as amounting to an abandonment of the freight. 174. And the court said, 'We do not think it was necessary to aban- (8) Idle v. don.'(8) There seemed to be nothing in this case upon which Co. 3 Moore, Roy. Ex. Ass. an abandonment might operate. 115. The ship being disabled and broken up, an aban necessary. 423. A ship having sailed on a voyage from Hull to Quebec, and received considerable damage, was compelled by bad weather to put into Limerick, where she could not be repaired for want donment held of materials and docks, and she was too much disabled to be removed to another port suitable for making repairs. She was accordingly broken up there. Upon the question, whether the assured could recover for a total loss without abandonment, Dallas, J. said, ' In some cases he may claim a total loss without abandonment. But, if the case be doubtful, the assured ought not to take upon himself to determine for the underwriters-to break up the ship, and to call upon them for a total loss. I think he should have communicated to them the state of the low v. Oswin, vessel.'(1) The whole court were afterwards of opinion that an 2 Camp. 85; abandonment was necessary to entitle the assured to a total loss.(2) (2) Ib. 426. n. (3) Green v. Brown, 2 Str. 1199; Newby v. Read, Park, 106; Twem Brown v. Neilson, 1 Caines, 525. Whether in case a vessel is not heard from, a total loss may be recovered for without abandonment. (4) Cambreling v. M'Call, 2 Dall. 280; S. C. 2 Yeates, 281. (5) Gordon v. Bowne, 2 Johns. 150. Whether in case of capture a total loss may be recovered for If the vessel is not heard from for a long time it is considered to be totally lost by perils of the seas.(3) A vessel that sailed from N. Carolina for St. Thomas's, was not heard from for six years after the time of sailing, and it was held that an abandonment was not necessary in order to entitle the assured to recover the amount insured. Chief Justice M'Kean said, 'We cannot see that, where there is nothing left to give up, there can be any thing to abandon. It would be useless to insist on a formal act of abandonment."(4) In the case of a vessel that sailed from N. Carolina to New York, and was not afterwards heard from; Chief Justice Kent said, that, after the lapse of a year, considering the voyage, the presumption that the vessel had perished was reasonable.' And considering it as proved that the whole subject had perished, the time of the trial of the action being four or five years after the sailing of the vessel, he said the ceremony of an abandonment would have been idle."(5) So in a case of capture and condemnation of the property, the assured brought a suit to recover the loss without having made any abandonment; Chief Justice Shippen said, 'Where any part of the thing insured is left, the assured is bound to without aban- abandon in order to enable him to recover as for a total loss; donment. the only penalty for not abandoning, is, that the assured must be satisfied with an average loss.' And the court was of opinion that the assured might recover, leaving it to the jury to esti mate the value of the chance of the reversal of the sentence of condemnation, and the restoration of the property. Mr. Justice Brackenridge, however, thought that if there had been any reasonable probability of recovering the property,-if the chance was worth any thing; the assured ought not to recover the loss without abandonment.(6) (6) Watson v. Ins. Co. of N. A. 1 Bin. 47. (7) Brown v. Phoen. Ins. Co. 4 Bin. 445. In a subsequent case, Chief Justice Shippen seems to have changed his opinion, and considered an abandonment requisite in such case. And Mr. Justice Brackenridge said, if abandonment was not necessary in such a case, in order to enable the assured to recover, he did not see that it was so in any case whatever.(7) It seems to have been the opinion of one of the judges in England, that abandonment was necessary though the ship and cargo had been sold and converted into money, when (1) Hodgson notice of the loss was received.(1) v. Blackiston, Park, 281. n. vernment. But in a case of the seizure of the property, by officers act- Property seizing under the Swedish government, Lord Ellenborough said, ed by a 'The general convenience of making an abandonment has led foreign goto an opinion that it is more necessary than it really is. A party is not in any case obliged to abandon, neither will the want of abandonment oust him of his claim for that which is, in fact, either an average or a total loss, as the case may be. Where there is an abandonment, the risk is thrown on the underwriters; where there is no abandonment, the party takes the chance of recovering according to his actual loss. And the court was of opinion that the assured in this case might recover according to his actual loss.(2) (2) Mellish v. Andrews, 15 East, 13. demnation Under a policy upon salt-petre imported from India, which The cargo was condemned at the Cape of Good Hope, and sold in pursu- sold under a ance of the sentence of condemnation, which sentence was re- decree of conversed on appeal, Lord Ellenborough said, 'As to abandonment, and the deif instead of the salt-petre having been taken out of the ship cree reversed. and sold, and the property devested, and the subject matter lost to the owner, it had remained on board, and been restored at last to the owner, I should have thought there was much in the argument that, in order to make it a total loss, there should have been notice of abandonment, but here the property itself was wholly lost, and the necessity of abandonment was altogether Shedden, 15 (3) Mullett r. done away."(3) East, 304. Chief Justice Kent says, 'This court has repeatedly decided that abandonment is not essential to enable the assured to recover a total loss, if the loss be actually total, and continue so (4) 2 Caines, to the bringing of the suit.'(4) But Mr. Justice Livingston, of 208. the same court, speaking of a case in which the master was compelled to sell the cargo at a reduced price, said, though it be settled with us that an abandonment is never too late while the loss continues total; yet we have not said that a suit can be (5) 1 Johns. maintained without any abandonment at all.'(5) But this posi- 191. tion seems not to be strictly accurate, since some of the preceding cases show that the assured may recover for a total loss without making any abandonment. It accordingly appears to be the opinion of all the judges of the different courts, that in case of the destruction of the property, the assured may recover the value insured without any abandonment. But what circumstances, short of the absolute destruction of the property, will constitute such a loss of it as will entitle the assured to recover the whole value without abandonment, seems to be a matter of some uncertainty. Where the only thing remaining to the assured, is the chance of recovering property captured or arrested, where there is any probability at all of recovering it, it seems reasonable to require an abandonment, or that the assured should claim only for a total loss; since, as Mr. Justice Brackenridge remarks, an estimate by the jury of the value of the chance of recovering the (1) 4 Bin. 472. In what cases property must be very vague and unsatisfactory.(1) And if such an inquiry were permitted it would not render abandonment the less expedient on the part of the assured, since all the doubt and uncertainty would justly operate to his prejudice, both because he is entitled to recover no more than he can satisfactorily prove to be the amount of his loss, and also because he might prevent the embarrassment by making an abandonment. In regard to freight, as far as the freight insured has been abandonment earned, and become absolutely due, the contract of insurance is must be made satisfied. If freights between different ports successively, and of freight to becoming absolutely due at the several ports of delivery, are insured in one policy, and after one or more of the freights is earned, a total loss upon this interest takes place, an abandonment can have relation only to the freight pending at the time of the loss. In respect to the freights previously earned, they have either been paid to the assured, or his claim for them is become absolute, and thus have ceased to be exposed to the perils insured against. In respect to such freights, therefore, the insurers are discharged, since all that they agreed, in the policy, to be answerable for, has been accomplished. An abandonment accordingly has no operation upon freight earned. recover for a total loss. (2) Green . (3) M'Carty v. Abel, 5 East, 393. See also Coolidge v. Glouc. Mar. Ins. Co. 15 Mass. Rep. 341. Under a policy upon freight, an abandonment can only transfer certain rights and advantages in relation to freight which is pending; in which an interest has accrued, on account of a contract respecting it, and something done towards earning it. Accordingly, if the ship and cargo are both entirely lost, though the loss happen after a greater part of the voyage is performed, no abandonment is requisite in order to recover for a total loss of freight, there being nothing to abandon, since the assured has not, in consequence of what has been done under the contract for freight, acquired any rights which can be of any value to the underwriters, it having become utterly impossible to earn any part of the freight insured. Freight being insured, the ship put back and was sold on account of damage; and the cargo was also sold. It was objected, to a claim for a total loss of the freight, that no abandonment had been made. Gibbs, C. J. was of opinion that there was no foundation for this objection. He said, he could not understand what there was to be abandoned.' And the court were of opinion that there was no ground for saying that there should have been an abandonment.(2) An abandonment of freight does not transfer to the underwriters the right of using the ship to complete the earning of freight. This would be to make the contract of affreightment or charterparty run with the vessel; so that if the ship were at the same time abandoned to a different underwriter, it would pass to him encumbered with an obligation to carry on the cargo to the port of destination; in regard to which Lord Ellenborough says, ' Was it ever heard of that a contract should run with a chattel? Put the case of a man purchasing a wagon as it is going on the road laden with goods, he is not bound to carry the goods to their journey's end.'(3) |