1. If a party assuring a vessel which has been sunk gives notice
that he abandons her as for a total loss when by the terms of the
policy he has no right so to abandon, the company, even if not
accepting the abandonment, will nevertheless make itself liable as
for a total loss if, taking possession of the vessel under the
provisions of the policy for the purpose of raising, repairing, and
returning her, they do not raise, repair, and return in a
reasonable time. Holding the vessel for an unreasonable time is a
constructive acceptance of the abandonment.
Page 76 U. S. 462
2. This is so notwithstanding there is a provision in the policy
that the acts of the insurers in preserving, securing, or saving
the property insured, in case of danger or disaster, should not be
considered or held an acceptance of abandonment. The provision
refers only to authorized acts.
3. When a court below makes a special finding, this Court will
not go into an examination of the evidence on which it was founded
to ascertain whether or not it was right. The finding is equivalent
to a special verdict.
Error to the Circuit Court for the District of Missouri, in
which court Copelin brought suit against the Phoenix Insurance
Company on a policy of insurance for $5,000 on the steamer
Benton, valued in the policy at $45,000. The policy
contained these stipulations:
"In case of loss, the party insured shall use every practicable
effort for the safeguard and recovery of said steamboat, and if
recovered cause the same to be forthwith repaired; and in case of
neglect or refusal, on the part of the assured, to adopt prompt and
efficient measures for the safeguard and recovery thereof, then the
insurers are hereby authorized to interpose and recover the said
steamboat, and cause the same to be repaired for account of the
assured, to the charges of which the said insurance company will
contribute in proportion as the sum herein assured bears to the
agreed value in this policy. The acts of the assured or assurers,
or of their joint or respective agents, in preserving, securing, or
saving the property insured in case of danger or disaster, shall
not be considered or held to be a waiver or acceptance of
abandonment."
The cause having been submitted to the court without a jury, the
court found that the boat insured struck a snag, and sunk in the
Missouri River, November 3, 1865, and that the injury was caused by
one of the perils against which the company had insured; that
though the plaintiff had no right to abandon for a total loss, he
gave notice that he did so abandon; but the defendants did not
accept such abandonment; that they did, however, under the
provisions of the policy, take possession of the vessel for the
purpose of raising and repairing her, and returning her to the
plaintiff; that accordingly they raised the boat, proceeded to
Page 76 U. S. 463
repair her, and tendered her to the plaintiff, at the home port,
on the 9th of May, 1866, more than six months after she had been
injured. It was further found that the repairs and tender were not
made within a reasonable time; that had the boat been tendered
earlier in the season, so as to be used for the spring trade on the
river, she would have been worth $5,000 more to the plaintiff; that
when she was tendered to him, the repairs made were not sufficient
to indemnify him for the injury the boat had sustained; that it
would have required an expenditure of $5,000 more to have made the
additional repairs necessary to complete the indemnity; and that
the plaintiff refused to receive the boat when she was tendered to
him, but did not point out the deficiencies in the repairs. It was
still further found that the expense of raising and repairing the
boat, actually incurred by the defendants, was $12,150.62, of which
$1,763.70 was the cost of the repairs made; that the boat, as
tendered to the plaintiff, was worth $12,000, and that when injured
she was worth $25,000. Upon the facts thus found, the circuit court
gave judgment for the plaintiff for the amount named in the policy.
And the insurance company brought the case here.
Page 76 U. S. 464
MR. JUSTICE STRONG delivered the opinion of the Court.
Nothing in this record requires us to look beyond the
Page 76 U. S. 465
special finding of the facts made by the court, or to do more
than determine whether, upon the facts found, the plaintiff below
was entitled to the judgment given.
As the sum insured by the policy was not greater than the sum
required to make the additional repairs necessary to indemnify the
plaintiff, it is difficult to perceive why, in any aspect of the
case, he was not entitled to the judgment given. The defendants
complain, however, that they have been held liable as for a
constructive loss, when there was no right to abandon, and when the
abandonment of which the plaintiff gave notice was not accepted.
Doubtless had the defendants taken possession of the boat, as they
were authorized to do by the provisions of the policy, and had they
raised, completely repaired, and returned her to the plaintiff in a
reasonable time, they could not have been held liable for a total
loss. It is an established fact that there was no right to abandon
when they did take possession of the vessel. And it was expressly
stipulated in the policy, that the acts of the assured, or
insurers, or of their joint or respective agents, in preserving,
securing, or saving the property insured, in case of danger, or
disaster, should not be considered, or held to be, a waiver or
acceptance of an abandonment. It is well settled, however, that an
offered abandonment may be accepted, even when the assured has no
right to abandon, and, if accepted, it must be with its
consequences. And an acceptance need not be expressly made. It may
even be refused, and yet the insurers, by their conduct, may make
themselves liable as for a total loss. Though, by the terms of the
policy, these defendants had a right to take possession of the
boat, and repair her for account of the plaintiff, yet this was a
privilege accorded to them only, that they might thus make
indemnity for the loss. Taking possession to make partial repairs,
not amounting to indemnity, was not contemplated by the contract.
It was not authorized. Nor did the contract warrant taking
possession of the boat, and holding her for an unreasonable time.
The insurers were bound to repair and return without unnecessary
delay. In holding longer than was necessary
Page 76 U. S. 466
for making repairs, they must be regarded as acting, not as
insurers, but as owners, for they had no other authority than that
of owners for their failure to return within a reasonable time.
Their action was therefore a substantial recognition and acceptance
of the abandonment of which they had been notified, for in no other
way had they become owners. On no other theory can this delay be
considered lawful. It is true the policy stipulated that the acts
of the insurers in preserving, securing, or saving the property
insured in case of danger, or disaster, should not be considered or
held an acceptance of abandonment, but this manifestly refers only
to authorized acts. Retaining possession of the boat an
unreasonable time and then offering to return her unrepaired were
not authorized acts, and consequently they are unaffected by the
stipulation. They must therefore be regarded as constructive
acceptance of an abandonment. This is a principle asserted and well
sustained by the authorities. In
Peele v. Suffolk Insurance
Company, [
Footnote 1]
where the jury had found that the underwriters, who had taken
possession of the stranded vessel, had not offered to restore her
in a reasonable time, the court said,
"The underwriter has his duties as well as his rights. If he
take the vessel into his possession to repair her, he must do it as
expeditiously as possible, in order that the voyage, if not
completed, may not be destroyed. If he delay the repairs beyond a
reasonable time, he forfeits his right to return the ship, and must
be considered as taking her to himself under the offer to
abandon."
The principle, said the court, rests upon the very nature of the
law of insurance, which is a fair and honest indemnity for loss.
The same doctrine was asserted in
Reynolds v. Ocean Insurance
Company, [
Footnote 2] and
it was also held that the underwriter's duty and liability in such
a case, are not varied by a clause in the policy of insurance,
stipulating
"that the acts of the assurers in recovering, saving, and
preserving the property insured in case of disaster, shall not be
considered an acceptance of an abandonment."
Such also was the ruling in a case between the same parties,
[
Footnote 3] and
Page 76 U. S. 467
in
Norton v. Lexington Fire, Life & Marine Insurance
Company. [
Footnote 4] It
is in our judgment sustained by sound reason.
The plaintiffs in error, however, insist that the doctrine
cannot be applied to the present case, because the court below
found there was no right, under the facts shown on the part of the
plaintiff, to abandon for a total loss, although he gave notice
that he did so abandon, and that there was no acceptance by the
insurers of such an abandonment. But this must be considered in
connection with the other facts found. It is equally a fact in the
case, that the defendants took possession of the boat, repaired her
very insufficiently, and after having held her an unreasonable
time, offered to return her. The legal effect of this we have seen.
Taking these facts together, the finding that the defendants did
not accept the abandonment which the plaintiff offered at a time
when he had no right to abandon, means no more than that there was
no express or avowed acceptance. This is quite consistent with the
judgment, that by their failure to return the boat within a
reasonable time, they made themselves liable to pay the full amount
of the policy.
We cannot follow the plaintiffs in error into an examination of
the evidence, in order to inquire whether it was not the fault of
the assured that the boat was not repaired and tendered to him in a
reasonable time. Our judgment is necessarily founded exclusively
upon the finding of facts by the court. That is equivalent to a
special verdict, and upon that we think the plaintiff below was
entitled to the judgment which he obtained.
Judgment affirmed.
[
Footnote 1]
7 Pickering 254.
[
Footnote 2]
1 Metcalf 160.
[
Footnote 3]
22 Pickering 191.
[
Footnote 4]
16 Ill. 235.
