Patapsco Insurance Company v. Southgate
30 U.S. 604

Annotate this Case

U.S. Supreme Court

Patapsco Insurance Company v. Southgate, 30 U.S. 5 Pet. 604 604 (1831)

Patapsco Insurance Company v. Southgate

30 U.S. (5 Pet.) 604

ERROR TO THE CIRCUIT COURT

OF THE DISTRICT OF MARYLAND

Syllabus

In the caption of a deposition, taken before the Mayor of Norfolk, to be used in a cause depending and afterwards tried in the Circuit Court of the United States held in Baltimore, the mayor stated the witness "to be a resident in Norfolk," and in his certificate he states that the reason for taking the deposition is "that the witness lives at a greater distance than 100 miles from the place of trial, to-wit, in the Borough of Norfolk." It was sufficiently shown by the certificate, at least prima facie, that the witness lived at a greater distance than 100 miles from the place of trial.

The provisions of the thirteenth section of the act of Congress, entitled "An act to establish the judicial courts of the United States," which relate to the taking of depositions of witnesses whose testimony shall be necessary in any civil cause depending in any district in the courts of the United States who reside at a greater distance than 100 miles from the place of trial are not confined to depositions taken within the district where the court is held.

In all cases where, under the authority of the act of Congress, a deposition of a witness is taken de bene esse except where the witness lives at a greater distance from the place of trial than 100 miles, it is incumbent on the party for whom the deposition is taken to show that the disability of the witness to attend continues, the disability being supposed temporary and the only impediment to a compulsory attendance. The act declares expressly that unless this disability shall be made to appear on the trial, such deposition shall not be admitted or used on the trial. This inhibition does not extend to the deposition of a witness living at a greater distance from the place of trial than 100 miles, he being considered beyond a compulsory attendance.

The deposition of a witness living beyond 100 miles from the place of trial may not always be absolute, for the party against whom it is to be used may prove the witness has removed within the reach of a subpoena, after the deposition was taken, and if that fact was known to the party, he would be bound to procure his personal attendance. The onus probandi thus would rest upon the party opposing the admission of the deposition in evidence. For a witness whose deposition is taken under such circumstances, it is not necessary to issue a subpoena. It would be a useless act; the witness could not be compelled to attend personally.

By the Act of 2 March, 1793, subpoenas for witnesses may run into districts other than where the court is sitting, provided the witness does not live at a greater distance than 100 miles from the place of holding the court.

Damages to a vessel by any of the perils of the sea on the voyage insured, which could not be repaired at the port to which such vessel proceeded after the injury without an expenditure of money to an amount exceeding half the value of the vessel at that port after such repairs, constitute a total loss.

The rule laid down in the books is general that the value of the vessel at the time of the accident is the true basis of calculation, and if so, it necessarily follows that it must be the value at the place where the accident occurs. The

Page 30 U. S. 605

sale is not conclusive with respect to such value. The question is open for other evidence if any suspicion of fraud or misconduct rests upon the transaction.

As a general proposition, there can be no doubt that the injury to the vessel may be so great as to justify a sale by the master. There must be this implied authority in the master from the nature of the case. He, from necessity, becomes the agent of both parties, and is bound in good faith to act for the benefit of all concerned, and the underwriter must answer for the consequences, because it is within his contract of indemnity.

There must be a necessity for a sale of the vessel and good faith in the master in making it, and the necessity is not to be inferred from the fact of the sale in good faith, but must be determined from the circumstances. The professional skill, the due and proper diligence of the master, his opinion of the necessity, and the benefit that would result from the sale to all concerned would not justify it unless the circumstances under which the vessel was placed rendered the sale necessary in the opinion of the jury.

There is some diversity of opinion among the elementary writers and in the adjudged cases as to what will constitute a valid abandonment. It seems, however, agreed that no particular form is necessary, nor is it indispensable that it should be in writing. But in whatever form it is made, it ought to be explicit, and not heft open as matter of inference from some equivocal acts. The assured must yield up to the underwriter all his right, title, and interest in the subject insured, for the abandonment, when properly made, operates as a transfer of the property to the underwriters, and gives them a title to it, or what remains of it, as far as it was covered by the policy.

The consul of the United States at the port where a vessel was sold in consequence of her having, in the opinion of the master, sustained damages, the repairs of which would have cost more than half her value at that port, declared in the protest of the captain, made at his request, that the captain abandoned the vessel, &c., to the underwriters. This protest, as soon as it was received by the assured, the owners of the vessel, was sent to the underwriters, and the owners wrote at the same time that they would forward a statement of the loss with the necessary vouchers, and they soon afterwards did forward the further proofs and a statement of the loss to them. This constituted a valid abandonment.

The defendants in error instituted an action against the Patapsco Insurance Company in the circuit Court of Maryland on a policy of insurance on the schooner Frances, Seaward, master, from Curacoa or a port of departure in the West Indies or on the main to a port in the United States. On her voyage from Carthagena to Norfolk, the Frances encountered a severe gale and sustained such injuries as made it necessary for her, after two days, to put back to Carthagena. On entering that port, she struck several times on a sand bar, and on examination it was found that she required considerable repairs in her hull and rigging. She was placed by the

Page 30 U. S. 606

captain under the care of the American consul at Carthagena, and was sold by him at private sale to Evans for $140, with the consent of the captain. Evans afterwards sold the Frances to Palmer for $200. She was repaired by Palmer and returned to the United States. The plaintiffs claimed a total loss from the underwriters.

On the trial in the circuit court, the defendants took exceptions to the opinions of the court, on points submitted by the plaintiffs and by the defendants, for instructions to the jury, which, with the facts of the case, are fully stated in the opinion of the Court.

The deposition of Thomas Evans was offered in evidence by the plaintiffs below, and after exceptions to its legality by the defendants, was admitted by this Court. The deposition was taken ex parte at Norfolk before the mayor of that place. In the caption, the mayor states the witness to be a resident in Norfolk; and in his certificate declares the reason for taking it to be that the witness "lives at a greater distance than 100 miles from the place of trial, to-wit: at the Borough Norfolk." No subpoena was issued for Evans, and no other evidence was offered of the place of his residence, than the caption of the deposition in the handwriting of the Mayor of Norfolk.

The jury having found a verdict for the plaintiff in the circuit court, the defendants prosecuted this writ of error.

Page 30 U. S. 615

MR. JUSTICE THOMPSON delivered the opinion of the Court.

The action is on a policy of insurance, dated 20 March, 1824, upon the schooner Frances, Seaward, master, valued at $2,500, lost or not lost, on a voyage from Curacoa or a port of departure in the West Indies or on the main to a port in the United States.

The schooner sailed from Norfolk on the outward voyage in January, 1824, and arrived and remained at Curacoa six or seven days, and proceeded thence to Carthagena, where she arrived on 15 February following, and having taken in a return cargo, proceeded on her return voyage to Norfolk, and after being at sea about twenty hours, she encountered a very heavy gale of wind and received such injury that it was deemed necessary to return to Carthagena. The captain reported the vessel to the American consul, who ordered a survey to be held upon her, and she was afterwards sold by the consul to Thomas Evans for $140, who purchased the schooner in his own name; but it was understood that Captain Seaward was to be concerned with him, and he furnished the money to buy her, and Seaward afterwards sold her to Ralmer for upwards of $200, who repaired her and returned with her to the United States.

Upon the trial, several bills of exceptions were taken on the part of the defendants in the court below and who are the plaintiffs here, upon which bills of exceptions are presented the questions brought into this Court for review. The first question relates to the admissibility, as evidence, of the

Page 30 U. S. 616

deposition of Thomas Evans, taken ex parte before the Mayor of Norfolk. In the caption of the deposition the witness is stated to be a resident of the Borough of Norfolk. And the mayor in his certificate states that the reason for taking his deposition is that the witness lives at a greater distance than 100 miles from the place of trial, to-wit, "in the said Borough of Norfolk." It was admitted that the Borough of Norfolk is more than 100 miles from the place of trial, but the objection was that no subpoena for this witness had been issued, nor any evidence out of the deposition produced at the trial to show his residence or inability personally to attend the trial. These were the particular objections taken at the trial, but on the argument here, a broader ground has been assumed: that no ex parte deposition taken out of the district where the trial is had is admissible, but that the testimony should be taken on a commission issued for that purpose. We think neither of these exceptions sufficient to exclude the deposition.

In support of the latter objection the case of Evans v. Hettick, 3 Wash.C.C. 417, has been relied on, and which would seem to sustain the objection. Mr. Justice Washington does there say that the act of Congress must be so construed as to confine its operations to depositions taken within the district when the witness lives more than 100 miles from the place of trial, but when a witness lives out of the district and more than 100 miles from the place of trial, his deposition, if taken, must be under a commission.

We think, however, that this is not the true construction of the act of Congress, 2 L.U.S. 68. It declares that when the testimony of any person shall be necessary in any civil cause depending in any district in any court of the United States who shall live at a greater distance from the place of trial than 100 miles, &c., the deposition of such person may be taken de bene esse, &c. The language here used is general, and is not certainly, in terms, confined to depositions taken within the district where the court is held. And if the provision was intended for the convenience of parties, it applies equally to depositions of witnesses living without as to those living within the district at a greater distance than 100 miles from the place of trial, and all the

Page 30 U. S. 617

dangers supposed to arise from the taking of ex parte evidence, apply with equal force to the one case as to the other. It is said, however, that the act declares the deposition may be taken de bene esse, and if allowed in cases when the witness lives out of the district, it necessarily becomes absolute, as the law stood in the year 1789, because a subpoena could not be issued into a district other than where the court was sitting. But no such consequence is perceived by the court to follow. The permission to take the deposition of a witness on account of his distant residence is connected with a number of other cases where the deposition may be taken, as when the witness is bound on a voyage to sea, or about to go out of the United States, or out of such district and to a greater distance from the place of trial than as aforesaid before the time of trial, or is ancient or very infirm, the deposition may be taken de bene esse. In all these cases, except where the witness lives at a greater distance than 100 miles, it will be incumbent on the party for whom the deposition is taken to show at the trial, that the disability of the witness to attend personally continues, the disability being supposed temporary, and the only impediment to a compulsory attendance. The act declares expressly that unless the same (that is, the disability) shall be made to appear on the trial, such deposition shall not be admitted or used in the cause. This inhibition does not extend to the deposition of a witness living at a greater distance from the place of trial than 100 miles, he being considered permanently beyond a compulsory attendance. The deposition in such case may not always be absolute, for the party against whom it is to be used may prove the witness has removed within the reach of a subpoena after the deposition was taken, and if that fact was known to the party, he would be bound to procure his personal attendance. The onus, however, of proving this would rest upon the party opposing the admission of the deposition in evidence. It is therefore a deposition taken de bene esse.

It was sufficiently shown, at least prima facie, that the witness lived at a greater distance than 100 miles from the place of trial. This was a fact proper for the inquiry by the officer who took the deposition, and he has certified that such is the residence of the witness. In the case of Bell v.

Page 30 U. S. 618

Morrison, 1 Pet. 356, it is decided that the certificate of the magistrate is good evidence of the facts therein stated, so as to entitle the deposition to be read to the jury.

It was not necessary to issue a subpoena. It would have been a useless act. The witness could not have been compelled to attend personally. By the Act of March 2, 1793, 2 L.U.S. 365, subpoenas for witnesses may run into districts other than where the court is sitting, provided the witness does not live at a greater distance than 100 miles from the place of holding the court.

The other exceptions arise upon the instructions given by the court upon the prayers of the parties respectively. After the testimony had been closed, each party submitted to the court several prayers upon which the instruction of the court was requested, and the record then states as follows.

"Upon which prayers of the plaintiffs and defendants, respectively, the court gave the opinions and instructions and directions to the jury, following: "

" 1. That if the jury find from the evidence that the damage done to the schooner Frances by any perils of the sea on the voyage insured could not be repaired without an expenditure of money to an amount exceeding half her value at the port of Carthagena, after such repairs, then such damage constitutes a total loss, and the plaintiffs are entitled to recover."

" 2. That if the jury finds from the evidence that Captain Seaward was a man of competent skill in his profession and that before he sold the schooner Frances to Palmer in the manner stated in the testimony, he used due and proper diligence to ascertain whether a sale was necessary and for the interest of the concerned, and if upon the information so obtained and the circumstances known to him at the time, after due and diligent inquiry, it was absolutely necessary and for the interest of the concerned that the vessel should be sold, and that a prudent and discreet owner, placed in like circumstances, would have come to the same conclusion and sold the vessel in like manner, and if from all the circumstances of the case the jury should be of the opinion that the sale was justifiable, that then the plaintiffs are entitled to recover."

"On the prayers of the defendants, the court's directions were as follows: "

" 1.

Page 30 U. S. 619

That the plaintiffs are not entitled to recover for a total loss unless the sale at Carthagena was in consequence of urgent and inevitable necessity; that no necessity will justify a sale by the master unless it be urgent and inevitable -- in other words, justifiable."

" 2. That in weighing this necessity, the fact of the sale's having been made as disclosed by the testimony is not to be conclusive, but the necessity is to be tested by a consideration of all the circumstances."

" 3. That if the jury shall find from the evidence that the damage which had been sustained by the vessel at the time she put back to Carthagena was of trivial amount, that this damage could have been repaired at Carthagena for a small sum, and the vessel thus enabled, after a short delay, to proceed on the voyage insured, and that the master had the funds to make the necessary repairs, and if it shall be of opinion that it was not such a case of urgent necessity as to justify the sale, then the plaintiffs are not entitled to recover for a total loss, but can recover only for a partial loss according to the circumstances of the case."

" 4. The court is of opinion that the abandonment was sufficiently made in this case."

In considering the exceptions taken to the opinion and direction of the court, we think, from the manner in which the prayers were presented and the instructions given, they may well be considered together as one entire direction to the jury, and not as a separate instruction upon each prayer, and this is the manner in which they have been treated on the argument at the bar.

The question arising upon the first instruction relates to the place where the value of the vessel was to be ascertained in order to determine whether there was a total loss. The court instructed the jury that if the vessel could not have been repaired without an expenditure exceeding half her value at the port of Carthagena after such repairs, it constituted a total loss. This direction we think entirely correct. It was not denied but that the cost of repairs must be ascertained at that place. But it is said, the value of the vessel after such repairs should be determined by the value in the home port or in the general market, as the injury might occur in a place

Page 30 U. S. 620

where the vessel would not be saleable, and the property might be sacrificed. It is true this may occur, but it is a circumstance incident to the risk assumed by the underwriter, and any other rule would be in many cases impracticable. The purpose for which the value is to be ascertained is to determine the right to abandon, and a delay in doing this might be considered as waiving the abandonment, and the value at the time the injury happens must necessarily be the rule by which that right is to be decided.

No case has been referred to or has fallen under the notice of the Court intimating the distinction here set up, and we do not think it warranted by the general principles of insurance law. The rule laid down in the books is general that the value of the vessel at the time of the accident is the true basis of calculation. 3 Kent's Com. 277. And if so, it necessarily follows that it must be the value at the place where the accident occurs. The sale is not conclusive with respect to such value. The question is open for other evidence if any suspicion of fraud or misconduct rests upon the transaction.

The other questions arising upon the instructions relate to the sale of the vessel and the sufficiency of the abandonment.

As a general proposition, there can be no doubt that the injury to the vessel may be so great and the necessity to urgent as to justify a sale. There must be this implied authority in the master from the nature of the case. He, from necessity, becomes the agent of both parties, and is bound in good faith to act for the benefit of all concerned, and the underwriter must answer for the consequences, because it is within his contract of indemnity. This was the doctrine in the case of Mills v. Fletcher, 1 Doug. 231; and which has been repeatedly sanctioned by the later decisions both in England and in this country. It is a power, however, that is to be exercised with great caution and only in extreme cases. It is liable to great abuse, and must therefore, in the language of some of the cases, be carefully watched. The difficulty in all these cases consists principally in the application of a rule to a given case, and not in determining what the rule is. It was not denied by the counsel for the plaintiffs in error that in cases of extreme and urgent necessity, the master has the power to sell if he acts in good faith and the circumstances

Page 30 U. S. 621

are such that a jury will find the necessity existed. All the circumstances must be submitted to the jury, and it must find both the necessity and good faith of the master in order to justify the sale. Necessity and good faith must concur, and the necessity is not to be inferred from the fact of sale in good faith, but must be determined from other circumstances. 4 Serg. & Lowb. 275; 7 id. 386; 1 id. 375; 2 Pick. 261; 5 Esp. 67.

The complaint on the part of the plaintiffs in this case is that the court placed the right to sell upon the good faith of the master and the existence of the necessity, according to his opinion. And the second instruction on the prayer of the plaintiffs below, if standing alone, would be open to this interpretation, and if so would be erroneous. The professional skill, the due and proper diligence of the master, his opinion of the necessity, and the benefit that would result from the sale to all concerned would not justify it unless the circumstances under which the vessel was placed rendered the sale necessary in the opinion of the jury.

But whatever ambiguity may appear in this instruction standing by itself, it is entirely removed, when taken in connection with those given upon the defendant's prayers. The jury was explicitly told that the plaintiffs were not entitled to recover for a total loss unless the sale was in consequence of urgent and inevitable necessity, and that the fact of sale was not conclusive, but that the necessity must be tested by a consideration of all the facts,\ as they existed at the time; that if the damage sustained was of trivial amount and would have been repaired at Carthagena for a small sum and with little delay, and that if in their opinion it was not such a case of urgent necessity as to justify the sale, then the plaintiff was not entitled to recover for a total loss. This instruction is according to the defendant's prayer, except that the court was requested to instruct the jury that the fact of sale was to have no influence, but that the necessity was to be tested solely by the facts as they existed anterior to the sale. We think the instruction, although not in the terms of the prayer, yet when connected with the other instructions, is substantially according to the prayer. For the jury was told in terms that the plaintiffs were not entitled to recover for a total loss unless the sale was the consequence of urgent and inevitable necessity.

Page 30 U. S. 622

Whether the evidence was sufficient to warrant the finding of the jury, is a question that cannot arise here, upon this bill of exceptions.

The only remaining inquiry is whether there was a sufficient abandonment proved.

There is some diversity of opinion among the elementary writers, and in the adjudged cases, as to what will constitute a valid abandonment. It seems, however, agreed that no particular form is necessary, nor is it indispensable that it should be in writing. But in whatever mode or form it is made, it ought to be explicit, and not left open as matter of inference from some equivocal acts. The assured must yield up to the underwriter all his right, title, and interest in the subject insured. For the abandonment, when properly made, operates as a transfer of the property to the underwriter, and gives him a title to it or what remains of it as far as it was covered by the policy. 3 Mar.Ins. 599; Phil.Ins. 447, and cases there cited.

The evidence in this case to support the abandonment consists of the correspondence between the parties and the documents accompanying the same.

On 1 May, 1824, the plaintiffs wrote to the defendants as follows:

"We are sorry to have to forward to you protest and surveys of the schooner Frances, insured with her cargo in your office. Captain Seaward arrived yesterday in the schooner Enterprise. We had before seen, by an arrival at Charleston from Carthagena, that the Frances had been condemned, but were ignorant until now of the cause. By the next steamboat we shall forward you a statement of the loss, with the necessary vouchers."

The protest enclosed to the underwriters contained the following clause:

"I, the said consul, at the request of the said master, Joseph Seaward, do hereby intimate, declare, and make known to the underwriters of the said schooner Frances and to the underwriters upon her cargo that the said master, for himself and in behalf of the owners of the said schooner Frances and her cargo, doth abandon, cede, and leave to them, the said underwriters, and to each and every of them, all his the said master's and theirs, the said owners', right, title, interest, profit, property, claim, demand, and produce of and in the said schooner Frances and her cargo and to the tackle, apparel, and furniture of the said schooner, and

Page 30 U. S. 623

that the aforesaid master doth claim, on behalf as aforesaid, reimbursement for the same as a total loss,"

&c. The receipt of this was acknowledged by letter of 4 May, and saying that the further proofs of loss on arrival should receive immediate attention. On 5 May, the further proofs, and a statement of the loss, were forwarded to the underwriters, the receipt of which was acknowledged by letter of 7 May, in which the underwriters say they have resolved to take time to consider about the adjustment of the loss.

This correspondence, independent of the protest, leaves no doubt as to the intention and understanding of the parties with respect to the abandonment. This would however be matter of inference only. But the protest is direct and explicit, both in form and in substance.

It is said, however, that this was an unauthorized act. It is true no authority is shown from the assured to the master to make the abandonment, and had it been communicated direct from the master to the underwriters, the objection would apply with full force. But this protest, containing the abandonment, was communicated to the underwriters by the plaintiffs. It became thereby their act, adopted and ratified by them, and must have the same legal effect and operation as if it had originated with the assured themselves and constituted a valid abandonment.

This renders it unnecessary for the Court to express any opinion upon the question made at the bar, whether any abandonment was necessary in this case. It may not, however, be amiss to observe that there is very respectable authority, and that too founded upon pretty substantial reasons for saying that no abandonment is necessary where the property has been legally transferred by a necessary and justifiable sale. 2 Pick. 261, 265.

The judgment of the circuit court is affirmed with six percent damages and costs.

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