Morean v. United States Insurance Company/Opinion of the Court
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
In addition to the cases above referred to, the cases of Biays v. the Chesapeake Insurance Company,l
This rule had received some countenance from more recent elementary writers; and from its public convenience and certainty, had been adopted as the governing principle in some of the most respectable commercial states in the union, and was now so generally established as not easily to be shaken. 1 Johns. Cas. 141. 1 Johns. Rep. 335. 406. Marshall on Insurance, 562. note 92. Condy's edit. Park, 194. 6th edit. But this rule has been deemed not to extend to a cargo consisting wholly of memorandum articles. The legal effect of the memorandum is to protect the underwriters from all partial losses; and, if a loss by deterioration, exceeding a moiety in value, would authorize an abandonment, the great object of the stipulation would be completely evaded. It seems, therefore, to be the settled doctrine, that nothing short of a total extinction, either physical or in value, of memorandum articles, at an intermediate port, would entitle the insured to turn the case into a total loss, where the voyage is capable of being performed. And, perhaps, even as to an extinction in value, where the commodity specifically remains, it might yet be deemed not quite settled, whether, under the like circumstances, it would authorize an abandonment for a total loss. as that the insured might at one time have treated it as total, it continues to be so, unless at the time
The case before the court was of a mixed character. It embraced articles of both descriptions; some within, and some without, the purview of the memorandum. If, in such a case, a deterioration exceeding a moiety in value, be a proper case of technical total loss, it will follow, that, in many cases, the underwriter will indirectly be rendered responsible for partial losses on the memorandum articles. Suppose, in such a case, the damage to the memorandum articles were 40 per cent., and to the other articles 10 per cent., in the whole amounting to half the value of the cargo, the underwriter would be responsible for a technical total loss, and thereby made to bear the whole damage, from which the memorandum meant to exempt him. Indeed, cases might arise in which the damage might exclusively fall on memorandum articles; and, if it exceeded the moiety in value of the whole cargo, might load him with the burthen of a partial loss, in manifest contravention of the intention of the parties. A construction leading to such a consequence could not be admitted unless it be unavoidable; and the court were entirely satisfied that such construction ought not to prevail. The underwriter is, in all cases of deterioration, entitled to an exemption from partial losses on the memorandum articles; and, in order to effectuate this right, it was necessary, where a technical total loss is sought to be maintained, upon the mere ground of deterioration of the cargo, at an intermediate port, to a moiety of its value, to exclude from that estimate all deterioration of the memorandum articles. Upon this principle, in a cargo of a mixed character, no abandonment for mere deterioration in value, during the voyage, could be valid, unless the damage on the nonmemorandum articles exceeded a moiety of the whole cargo, including the memorandum articles. The case was considered, as to the underwriter, the same as though the memorandum articles should exist in their original sound state. In this way, full effect was given to the contract of the parties. The underwriter would never be made responsible for partial losses on memorandum articles, however great; and the technical total losses for which alone he could be liable, were such as stood unaffected by the perishable nature of the commodity which he insures. Admitting, therefore, the rule to be correct, that the party has a right to abandon when the depreciation exceeds a moiety of the value, the plaintiff had not brought himself within that rule, as applied to a cargo of a mixed nature, and there was, consequently, no total loss proved by the perils of the seas. when the offer to abandon is made clear of the effects of the peril, and in a condition to prosecute the voyage, it is restored to his possession. Now, this is certainly not the condition of property, which, at the time of the offer to abandon, is in the possession of a recaptor, who has a right to retain it until he is paid his salvage. But, in the present case, the corn never was out of the possession of the agents of the insured, who exercised every act of ownership over it, subject, nevertheless, to the laws and customs of the country to which it was sent, with which the insurer and insured are supposed to have been acquainted at the time they entered into this contract, and to which they impliedly agreed to submit. The cargo which was landed, not only continued in the possession, and under the direction, of the agents of the insured, but it was relieved from the effects of the peril, as between the insurer and insured, and it was not only in a condition to prosecute the voyage, but it did in reality complete it. Upon the whole, it is the opinion of the court that this is not such a loss as the defendants engaged to indemnify against. and that judgment should be given in their favour.