Insurance Company v. Gossler

ERROR to the Circuit Court of the United States for the District of Massachusetts.

The plaintiff, the Delaware Mutual Safety Insurance Company, was insurer of a cargo of sugar on board the 'Frances,' from Java to Boston. After leaving her port of departure, the vessel encountered a hurricane, which compelled her to proceed to Singapore, where she was repaired and fitted to continue the voyage.

To meet the expenses of repairs, the master was obliged to borrow at Singapore the sum of $26,055.43, Singapore currency, and to execute, on the twelfth day of July, 1872, a bottomry bond for that sum, with marine interest at twenty-seven and a half per cent, upon the vessel and freight.

The bond contained the following stipulation:--

'Provided, nevertheless, and it is hereby agreed, that if, in the course of the said voyage, an utter loss of the said vessel by fire, lightning, enemies, men-of-war, or any other perils, dangers, accidents, or casualties of the seas or navigation, shall unavoidably happen, then the said loan and interest shall not be payable, and all parties liable therefor shall be wholly discharged therefrom, and the loss shall be wholly borne by the said lenders or bondholders, and every thing herein contained for payment thereof shall be void and determined; save and except only, and provided in such case, that the said lenders or bondholders shall be entitled to such average as can be hereby lawfully secured to them on all salvage recoverable in respect to the said vessel, freight, and goods, or any of them.'

The vessel sailed from Singapore for Boston, encountered a storm in the month of December following, and was cast ashore on Cape Cod, Mass.

The defendants, Gossler & Co., who were agents of the bondholders and assignees of the bond, succeeded in saving somewhat less than half the sugar on board, and forwarded it to Boston.

The vessel, as she lay upon the beach, was surveyed, and, having been found incapable of repair, was broken up, and her materials were sold. When she was sold, she lay 'on the beach, full of water, as high as she could, but so low as to be submerged at high-water.' The chains and anchors, sails and rigging and hull, were sold separately, at auction, by the underwriter, in January, 1873: the chains, anchors, and other utensils bringing $1,494.75; the sails and rigging, $2,323.70; and the hull, $2,000.

Upon learning of the disaster, the owners of the cargo made abandonments in writing to the plaintiff as the underwriter thereon, and claimed payment for a total loss under their respective policies.

The letters of abandonment were dated, respectively, Dec. 28, 30, and 31, 1872.

In March, 1873, the plaintiff paid to each owner the amount of a total loss under his policy; and received on the same date, from them so insured and paid, an assignment and transfer in writing of 'the sugar of said owners, and all their right, title, interest, trusts, claim, and demand therein and thereto.'The defendants, as agents of the bondholders, with the consent of the owners of the cargo, proceeded to sell the sugar saved; and now hold the proceeds, claiming them on account of said bond, such proceeds not being sufficient to satisfy it. The plaintiff having, at all times, claimed them, as the underwriter who accepted abandonments and paid a total loss thereon, brought this action to recover them.

The case was tried by the court below; and, judgment having been rendered for the defendants, the company brought the case here.

The facts show an 'utter loss' of the vessel. Thompson v. The Royal Exchange Assurance Co., 1 M. & S. 30; The Elephanta, 9 Eng. L. & Eq. 553; Joyce v. Williamson, 3 Doug. 164; Pope et al. v. Nickerson et al., 3 Story, 465; Murray v. Hatch, 6 Mass. 464; Cambridge v. Anderton, 2 Barn. & Cress. 691; Roux v. Salvador, 3 Bing. N. C. 266; 2 Arnould, Ins., sect. 364, 365; Marshall, Ins. 446; 2 Parsons, Mar. Ins. 73; 2 Phillips, Ins., sect. 1485; Barker v. Janson, Law Rep. 3 C. P. 303; Walker v. Protection Insurance Co., 29 Me. 317; Gardner v. Salvador, 1 Moo. & R. 116; Irving v. Manning, 1 H. L. Rep. Cas. 287; Mullett v. Shedden, 13 East, 303; Cambridge v. Anderson, Ry. & M. 60; Poole v. The Protection Insurance Co., 14 Conn. 46; Tudor v. New England Mutual Marine Insurance Co., 12 Cush. (Mass.) 554; Hugg v. Augusta Insurance & Banking Co., 7 How. 595; Dyson v. Rowcroft, 3 Bos. & Pul. 474; Appleton v. Crowninshield, 3 Mass. 443; Peele v. Suffolk Insurance Co., 7 Pick. (Mass.) 254; Peele et al. v. Merchants' Insurance Co., 3 Mason, 27; Crosby v. New York Mutual Insurance Co., 5 Bosw. (N. Y.) 369; Stagg v. United Insurance Co., 3 Johns. (N. Y.) Cas. 34; Coit v. Smith, id. 16.

The utter loss of the vessel having avoided the bond, the holders of it had no right, under its terms, to the proceeds of the cargo saved from the wreck. 1 Parsons, Mar. Ins. 221; 2 Park, Ins. 628, 629; 2 Phillips, Ins., sect. 1488; Joyce v. Williamson, 3 Doug. 164; Robertson & Brown v. United Insurance Co., 2 Johns. (N. Y.) Cas. 250; Appleton v. Crowninshield, 8 Mass. 340; Thorndike v. Stone, 11 Pick. (Mass.) 183; Bray v. Bates and Another, 9 Metc. (Mass.) 237; The Insurance Company of Pennsylvania v. Duval and Another, 8 Serg. & R. (Pa.) 138; The Virgin, 8 Pet. 538; The Hunter, 1 Ware, 251; Parsons, Mar. Law, 420, and cases cited; Marshall, Ins., c. 13, sect. 7; Stephen v. Broomfield, L. R. 2 P. C. 516; Columbian Insurance Co. v. Ashby, 13 Pet. 331; Gray v. Waln, 2 Serg. & R. (Pa.) 229.

Mr. Charles A. Welch, contra, cited The Virgin, 8 Pet. 538; 3 Kent, Com. 359, 360; 2 Arnould, Ins., sect. 392; 1 Phillips, Ins., sect. 1170; Abbott, Shipp., p. 126; Maude & Pollock, Shipp., p. 440; Maclachlan, Shipp., p. 57; Hopkins' Hand-Book of Average, p. 93; Crump, Mar. Ins., sect. 147; Thompson v. The Royal Exchange Assurance Co., 1 M. & S. 30; The Great Pacific, Law Rep. 2 Ad. & Ec. 381; S.C.. Law Rep. 2 P. C. 516; Broomfield v. Southern Insurance Co., Law Rep. 5 Ex. 192; The Insurance Company of Pennsylvania v. Duval and Another, 8 Serg. & R. (Pa.) 138; Delaware Insurance Co. v. Archer, 3 Rawle (Pa.), 216; The Catherine, 1 Eng. L. & Eq. 679; The Elephanta, 9 id. 553; Bynkershoek, Quaest. Pub., lib. 3, ch. 16; The Dante, 2 W. Rob. 427; Stephen v. Broomfield, Law Rep. 2 P. C. 516.

Mr. William G. Russell and Mr. Charles M. Reed for the plaintiff in error.

MR. JUSTICE CLIFFORD delivered the opinion of the court.