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, all the deterioration of memorandum
articles must be excluded from the estimate. Therefore, in a cargo
of a mixed character, no abandonment for mere deterioration in
value during the voyage can be valid unless the damage on the
nonmemorandum articles exceed a moiety of the value of the whole
cargo, including the memorandum articles.
Where the general owner of a ship retains the possession,
command, and navigation of the same and contracts to carry a cargo
on freight for the voyage, the charter party is to be considered as
a mere affreightment sounding in covenant, and the freighter is not
clothed with the character or legal responsibility of
ownership.
In such case, the general owner is also owner for the
voyage.
Consequently, if he be master of the vessel, he is incapable of
committing barratry.
Barratry is an act committed by the master or mariners of a ship
for some unlawful or fraudulent purpose contrary to their duty to
their owner whereby the latter sustains an injury.
The facts of this case were thus stated by STORY, J. in
delivering the opinion of the Court.
This is an action on a policy of insurance, underwritten by the
defendants on 29 October, 1806, for $31,000, upon any kind of
lawful goods on board the brig
Betsey, whereof Alexander
McDougal was then
Page 12 U. S. 40
master, on a voyage at and from New York to Nantes. McDougal was
the general owner of the brig, and on 1 October, 1806, by a charter
party of affreightment made with the plaintiff, granted and to
freight let to the plaintiff the said brig, excepting and reserving
her cabin for the use of the master and mate and for accommodation
of passengers, as therein mentioned, and so much room in the hold
as might be necessary for the mariners and storage of water, wood,
provisions, and cables, for the voyage from New York to Nantes, and
McDougal, by the same instrument covenanted to man, victual, and
navigate the brig at his own charge during the voyage and to
receive on board any shipment of goods, not contraband, which the
plaintiff should tender at the side of the ship or within reach of
her tackles at New York and to stow and secure the same and proceed
therewith to Nantes and there discharge the same. The passengers on
board the brig were to be at the joint expense of the parties, and
the passage money was to be equally divided between them. The other
clauses in the charter party are not material to be stated except
that the plaintiff covenanted to pay the stipulated freight and
demurrage. The cargo, put on board by the plaintiff, was of the
invoice value of $29,889, of which $7,439 was in memorandum
articles. The brig sailed on the voyage under the command of
McDougal on 9 November, 1806, and during the voyage was compelled
by stress of weather and other accidents to bear away for the West
Indies, and arrived at the port of St. Johns, in Antigua, on 22
December. There the master made application to the vice admiralty
for a survey, &c., and such proceedings were had upon his
application that the cargo was landed, and by a decretal order of
the court of 31 January, 1807, the same was ordered to be sold for
the benefit of all concerned, reserving the question as to freight.
Under this decree the cargo was accordingly sold, and the sales
completed before 28 March, 1807, and the net proceeds of the whole
of the plaintiff's property amounted to $13,767. The net proceeds
of the memorandum articles, included in the same sum, were
$6,863.30. The whole proceeds were paid over to an agent appointed
by McDougal, and the freight for the whole voyage was allowed him
by the admiralty upon a report
Page 12 U. S. 41
of commissioners, to whom the question was referred. The brig
was repaired at Antigua within a reasonable time at the expense of
one sixth only of her value, and capable of performing the voyage
with the original cargo, but McDougal voluntarily abandoned the
voyage at Antigua for his own emolument and advantage. Of the
cargo, 99 bags of coffee were spoiled and thrown overboard, and the
residue greatly damaged by the perils of the seas, and the whole
cargo, including the memorandum articles, sustained a damage during
the voyage exceeding a moiety of its original value. On 4 Feb. 1807
and within a reasonable time after receiving information of the
loss, the plaintiff abandoned the whole cargo to the
underwriters.
The declaration contained two counts for a total loss -- 1st by
the perils of the seas and 2d by barratry of the master. At the
trial, the court below, upon the facts and circumstances above
stated, held that the plaintiff was not entitled to recover as for
a total loss of the cargo insured, including the memorandum
articles, and the cause came up to this Court upon a bill of
exceptions to that opinion.
Page 12 U. S. 46
STORY, J. delivered the opinion of the Court as follows:
The plaintiff in this case contends that there was a total loss
which authorized an abandonment by both of the perils stated in the
declaration
viz.,
1st. By the perils of the seas, and
2d. By barratry of the master.
And first, as to a total loss by the perils of the seas.
Page 12 U. S. 47
It seems now clear that a technical total loss may arise from
the mere deterioration of a cargo by any of the perils insured
against if the deterioration be ascertained at an intermediate
port, of necessity, short of the port of destination. In such case,
although the ship be in a capacity to perform the voyage, yet if
the voyage be not worth pursuing, or the thing insured be so
damaged and spoiled as to be of little or no value, the insured has
a right to abandon the projected adventure and throw upon the
underwriter the unprofitable and disastrous subject of insurance.
It has therefore been held that if a cargo be damaged in the course
of the voyage, and it appear that what has been saved is less in
value than the amount of the freight, it is a clear case of a total
loss. It does not, however, appear that the exact quantum of damage
which shall authorize an abandonment as for a total loss has ever
become the direct subject of adjudication in the English courts.
The celebrated treatise Le Guidon, ch. 7, art. 1, considers that a
damage exceeding the moiety of the value of the thing insured is
sufficient to authorize an abandonment. This rule has received some
countenance from more recent elementary writers, and from its
public convenience and certainty has been adopted as the governing
principle in some of the most respectable commercial states in the
Union, and perhaps is now so generally established as not easily to
be shaken. 1 John., c. 141, p. 1; John. R. 335, 406; Marsh. Ins.
562, Note 92, Am.Edit., 1810; Park, p. 194, 6th ed.
But this rule has never been deemed to extend to a cargo
consisting wholly of memorandum articles. The legal effect of the
memorandum is to protect the underwriter 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
may yet be deemed not quite settled whether,
Page 12 U. S. 48
under the like circumstances, it would authorize an abandonment
for a total loss.
Dyson v. Rowcroft, 3 Bos. & Pull.
474;
Maggrath v. Church, 1 Caines 212;
Cocking v.
Frazer, Marshall 227; Park 152, 6th ed.
The case before the Court is of a mixed character. It embraces
articles of both descriptions -- some within and others 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 of the
memorandum articles were 40 percent and to the other articles 10
percent 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
burden of a partial loss in manifest contravention of the intention
of the parties. A construction which leads to such a consequence
cannot be admitted unless it be unavoidable. And we are entirely
satisfied that such a 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 is 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, on a cargo of a mixed
character, no abandonment for mere deterioration in value during
the voyage can be valid unless the damage on the non-memorandum
articles exceed a moiety of the value of the whole cargo, including
the memorandum articles. The case is considered, as to the
underwriter the same as though the memorandum articles should exist
in their original sound state. In this way full effect is given to
the contract of the parties. The underwriter
Page 12 U. S. 49
is never made responsible for partial losses on memorandum
articles, however great, and the technical total losses for which
alone he can be liable are such as stand unaffected by the
perishable nature of the commodity which he insures.
In the present case, the facts alleged by the plaintiff do not
show a depreciation of a moiety in value, excluding the memorandum
articles. There is no evidence of the quantum of depreciation of
any part of the cargo. The forced sales at Antigua could not, under
the circumstances, constitute a medium by which to ascertain it.
Admitting, therefore, the rule to be correct that the party had a
right to abandon where the depreciation exceeds a moiety of the
value, the plaintiff has not brought himself within that rule as
applied to a cargo of a mixed character like the present. The court
below was right, therefore, in deciding that there was no total
loss proved by the perils of the seas.
The next question is whether there was a total loss by the
barratry of the master. And this depends exclusively upon the
consideration who was owner of the brig for the voyage, for it is
conceded on all sides that the conduct of the master was barratrous
if he was in a situation to commit that offense. Barratry is an act
committed by the master or mariners of a ship for some unlawful or
fraudulent purpose, contrary to their duty to their owners, whereby
the latter sustain an injury. It follows, therefore, from the very
terms of the definition that it cannot be committed by a master who
is owner for the voyage, because he cannot commit a fraud against
himself. But it may be committed against a person who is owner for
the voyage, although he may not be the general owner of the ship. A
person may be owner for the voyage who, by a contract with the
general owner, hires the ship for the voyage and has the exclusive
possession, command, and navigation of the ship. Such is understood
to have been the case of
Vallejo v. Wheeler, Cowp. 143.
But where the general owner retains the possession, command, and
navigation of the ship and contracts to carry a cargo on freight
for the voyage, the charter party is considered as a mere
affreightment sounding in covenant, and the freighter is not
clothed with the character
Page 12 U. S. 50
or legal responsibility of ownership; such was the case of
Hooe & Co. v.
Groverman, 1 Cranch 214. In the first case the
general freighter is responsible for the conduct of the master and
mariners during the voyage; in the latter case the responsibility
rests on the general owner. On examining the charter party in the
present case, there can be no doubt from the terms and stipulations
that it falls within the latter class of cases. The master, who was
the general owner, retained the exclusive possession, command, and
management of the vessel, and she was navigated at his expense
during the voyage. The whole charter party, except the introductory
clause, sounds merely in covenant. The ownership was not divested
by the covenant of affreightment, and consequently the master was
incapable of committing barratry. There was, then, no total loss on
the second count in the declaration.
The opinion of the circuit court on this exception must be
sustained. But there are other exceptions on the record in which it
is admitted by the parties that the circuit court erred. The points
intended to be raised in these exceptions have in effect being
decided by this Court in
Caze & Richaud v.
Baltimore Insurance Company, 11 U. S.
358. For the errors in these exceptions, the judgment
must be
Reversed with directions to the circuit court to award a
venire facias de novo.
