New England Insurance Company v. The Brig Sarah Ann - 38 U.S. 387 (1839)
U.S. Supreme Court
New England Insurance Company v. The Brig Sarah Ann, 38 U.S. 13 Pet. 387 387 (1839)
New England Insurance Company v. The Brig Sarah Ann
38 U.S. (13 Pet.) 387
The right of the master to sell a vessel stranded depends on the circumstances under which it is done to justify it. The master must act in good faith and exercise his best discretion for the benefit of all concerned, and a sale can only be made on the compulsion of a necessity, to be determined in each case by the actual peril to which the vessel is exposed, and from which it is probable, in the opinion of persons competent to judge, the vessel cannot be saved. This is an extreme necessity.
The true criterion for determining the authority of the master to sell a vessel stranded near a foreign port, or in a port of the United States, or of a different state than that to which the vessel belongs or in which the owners may be or reside, when the necessity occurs, is the distance of the owners or insurers from the scene of stranding. If by the ordinary means to convey intelligence of the situation of the vessel, the master can obtain directions as to what he should do, he should resort to those means. But if the peril is such that there is a probability of loss, and it is made more hazardous by every day's delay, the master may act promptly to save something for the benefit of all concerned, though but little can be saved. There is no way of doing so more effectual than by exposing the vessel to sale, by which the enterprise of such men is brought into competition as are accustomed to encounter such risks, and who know from experience how to estimate the probable profits of such adventures.
The power of the master to sell the hull of the stranded vessel exists also as to her rigging and sails, which he may have stripped from her, after unsuccessful efforts to get her afloat, or when the vessel in his own judgment and that of those competent to form an opinion and to advise, cannot be delivered from her peril.
If the master sells without good faith or without a sound discretion, the owner may, against the purchaser, assert his right of property in the sails and rigging, as he may in the case of a stranded vessel, which has been sold without good faith in the master.
The Court does not think the case of Smith v. Briddle, 2 Washington C.C. 150, sound law. It is expressed in terms too broad.
In September, 1834, in the District Court of the United States for the District of Massachusetts, the New England Insurance Company filed a libel stating that they were the true owners of the brig Sarah Ann, then in the District of Massachusetts, and in the possession of Obadiah Woodbury and others, claiming to be the owners of the said brig, and who are about to carry her to sea without the consent of the libellants.
A summons was issued to Obadiah Woodbury and others commanding them to appear and show cause why process should not issue against the brig as prayed for in the libel, and they appeared and gave stipulations to abide by the final decree of the court on an appeal, and put in an answer to the libel.
The case was proceeded in by the libellants, and the respondents in the district court, and after testimony had been taken to the matters in controversy, a pro forma decree for the respondents dismissing the libel was given by the district judge by the consent of the counsel of both parties, and the libellants appealed to the Circuit Court of the United States for the District of Massachusetts.
Further evidence was taken in the circuit court by the appellants, and the defendants, and at May term, 1835, the circuit court
gave a decree in favor of the defendants, from which the New England Insurance Company prosecuted this appeal.
The facts of the case were as follow:
On the first day of March, 1828, the appellants, at Boston, underwrote a policy of insurance on the brig Sarah Ann, valued at four thousand dollars, in port, and at sea, during the term of one year, from 22 February, 1828. On 25 March, 1828, the brig was stranded on the shore of the Island of Nantucket, and on the following day an abandonment was made by the owners for a total loss by the perils of the sea. The abandonment was expressly refused by the assurers, but it was not withdrawn by the owners of the vessel, and on the third of October, 1828, a compromise was made between them and the assurers, and all the right and title of the assurers in the brig was assigned to the appellants. The claimants of the brig, the appellees, asserted a title derived under a sale made by the master after the stranding, on the ground of an absolute necessity for such a sale.
In May, 1828, the brig was brought into Boston after having been gotten off from the shore at Nantucket and having been repaired. The repairs of the brig, and her cost at the sale made by the master, amounted to twenty-four hundred and ninety-four dollars and sixty-seven cents, and she was sold in Boston in July, 1828, for $2,736.41. On 14 May, 1828, the president of the Insurance Company wrote to the agent of the former owners of the brig, the assured, stating that the brig was then in Boston, and saying,
"As she is now within your own control as agent for the owners, if you do not take possession of her in their behalf, the Company must consider the sale of her at Nantucket, as affirmed by them, and that she is sold for their account. We of course shall contest the validity of the sale as it regards ourselves, and we think the owners ought to contest it themselves."
At this time, the title to the brig was in contest between the assured and the assurers. The abandonment was denied to be good, and neither party was in a situation to assert a title without compromitting rights then actually in contestation. There were no allegations or proofs in the cause that after the final acceptance of the abandonment in October, 1828, the brig had been within the ports of Massachusetts, and within the reach of the process of the court for a reasonable time, within the knowledge of the appellants.
The facts of the case, as stated in the protest and as detailed in the decree of Mr. Justice Story in the circuit court, 2 Sumner 213, were:
"The brig, having on board a cargo of rice and cotton, sailed on a voyage from Savannah for Boston, and on 23 March, 1828, was stranded on the southwest side of the Island of Nantucket. On the next day, assistance was obtained from the shore, and the anchors were got out and hove tight in order to start the vessel, but without success. In the course of the forenoon, the wreck master came on board with twenty men, and pursuant to his directions the deck load was thrown overboard. They then hove
the cables again, but with no beneficial effect. They then proceeded to open the hatches and discharge the cargo from the hold, and then hove out the cables again, but to no purpose, as the tide had fallen, and there was a considerable surf rolling in shore."
The captain and crew remained on board that night, and the day following nothing could be done, as the wind blew strong at the southeast, and there was a heavy surf. After the weather moderated, the cargo was, with great difficulty, got on shore. The protest stated that the wind and the surf of the sea had driven the brig so far on shore as to render it impossible to get her off.
It further appeared from the evidence that the place where the brig was stranded was on a sandy beach, about twelve miles distant by sea and six miles by land from the Town of Nantucket, and that the brig was at no time high and dry there. The depth of the water about her varied; sometimes it was six feet and sometimes it was ten feet, and she was at no time of tide out of water. The cargo was discharged in about five days, and the spars, sails, and rigging were then stripped off and carried on shore and sold in small lots to the highest bidder. After the cargo was sold, the brig became loose in the sand and slewed round and lay with her broadside to the shore. She was sold on the 28th of March by the master at public auction, where she lay, for $127; at the same time, the spars, sails, and rigging were sold for $422.40. No efforts appeared to have been made to get the brig off the shore, though she had not then sustained any serious injury. Three intelligent surveyors, at a subsequent period, estimated the repairs of her hull, as not exceeding $492.25. The brig was got off by the purchasers soon after the sale, and was carried to the port of Nantucket, and there repaired. The whole cost of the brig to the purchasers including the repairs, and outfits to Boston, was represented to have been, $2,494.67, and she was sold under the order of the purchasers, as stated, at Boston, in July, 1828, for $2,736.41.