The defendant has paid the sum of $8,000, the amount specified in the policy, and denies its further liability. The question is whether, by virtue of the policy simply, or in consequence of the clause authorizing the insured to sue and labor, or in consequence of the correspondence *Page 262 which occurred, the defendant is liable beyond the amount underwritten by it upon the brig.
The clause referred to made it "lawful and necessary for the assured, their factors, servants and assigns, to sue, labor and travel in and about the defence, safeguard and recovery of the said vessel, or any part thereof, without prejudice to the insurance made by said policy; and that the said company would contribute to the charge thereof according to the rate and quantity of the sum insured by the said policy."
The object of this clause is said, by Arnould, to be to permit the assured to take every measure for the recovery of the property without waiving his right of abandonment, and to bind the underwriters to contribute to reimburse the expenses incurred. Although the language of the clause is permissive only, it is well settled that it is the clear duty of the assured so to labor for the recovery and restitution of the property. (1 Arnould on Ins., § 29.)
The objection is made in the outset that the policy is an instrument of indemnity to a certain amount, and that no liability for a single loss can exceed that amount, and such further expenses as may fall under the suing and laboring clause. Although it is generally true that the liability of the underwriter is limited to the amount of his subscription, there are many instances given in the books where a greater liability is incurred. In Livie v. Janson, Lord ELLENBOROUGH said: "There may be cases in which, though a prior damage be followed by a total loss, the assured may have rights or claims in respect of the prior loss which may not be extinguished by the subsequent total loss. Actual disbursements for repairs, in fact, made in consequence of injuries by perils of the seas, prior to the happening of the total loss, are of this description." * * * (12 East R., 655.)
Phillips says: "In England and the United States the underwriters are unquestionably liable for a subsequent total loss, in addition to the expense of previous repairs, which have been previously paid for by the assured, in distinction *Page 263 from those made by means of funds raised on bottomry. That is, the insurer is liable for the expense of the repairs; and is also liable for subsequent damage to the repaired parts of the ship." (2 Phil. on Ins., § 1267.) These authorities do not conflict with the appellant's position, as in the cases put there are successive losses, while the appellant's proportion is limited to the case of a single loss. In respect to this item of $581.18 general average, in getting off the vessel and running her to the Balize, the authorities are clear that it is a proper charge upon the underwriters in addition to their subscription, although there was but a single loss. The expenses of salvors and lighters must be paid at all events; and this, whether anything is saved or not, and although they may swell the loss to an amount greater than the sum insured.
In Jumel v. The Marine Ins. Co. (7 J.R., 412) it was held that the insured were entitled to recover as for a total loss, and also for all the subsequent expenses in endeavoring to save the property. (See, also, McBride v. The Same, id., 430;Watson v. The Same, id., 57.)
Taking the policy, with the laboring clause included, and it is not denied by either party that certain sums beyond the amount underwritten may be recovered. The contention is as to the extent of such recovery. Can an expenditure intended for temporary repairs, increased by the difference of exchange and the high price of labor (as it is stated in the briefs) to the sum of $8,769.76, while the permanent repairs of the vessel when she reached New York were made at an expense of $4,547.21, be recovered against the underwriter? I suppose the amount of the expense cannot determine the question. It is, perhaps, not an element in the case, but I state the fact as it exists in the present case. If a recovery can be had against the underwriters, the rule governing the amount is declared to be "according to the rate and quantity of the sum insured by said policy." The vessel being valued at $10,000 and the sum insured being $8,000, the rate and quantity of the sum insured is eight-tenths. This proportion, *Page 264 therefore, of the expenses of the temporary repairs, if any, would fall upon the underwriters.
By the clause quoted there are three purposes for which the assured is authorized and required to sue, labor and travel, viz.: 1, the defence; 2, the safeguard; and 3, the recovery of the vessel. In the cases against the marine insurance company, above cited from Johnson's Reports, the vessels had been seized by hostile persons and condemned as prizes. The expenses for which the underwriters were held liable were those incurred in endeavoring to defend the rights of the owners in the courts of law. They were expenses incurred in the safeguard or in the recovery of the vessel. Either term would cover them.
In Kidstone v. The Empire Mar. Ins. Co. (Law Rep., 1 Com. Pleas, 535) the plaintiff had effected a policy on the charter freight of guano, from Chincha island to Great Britain. The vessel encountered a storm and put into Rio, so damaged by the perils of the seas as not to be worth repairing, and was sold. The guano was landed and stored at Rio, and the master procured another vessel to carry it to Bristol at an agreed freight of £ 2,400, which the plaintiffs paid, and received the freight from the consignee. An expense of £ 100 was also incurred at Rio in landing, storing and reloading the guano. It was held that the plaintiffs are entitled to recover, under the suing and laboring clause, the expenses so incurred and the freight of £ 2,400, notwithstanding there had been no abandonment. Two principal considerations controlled the decision of this case. First, the freight insured would have been totally lost, unless the expenses had been incurred. It was not due until and upon the delivery of the cargo in Great Britain. Stopping at Rio, no part of it was due pro rata itineris. When the loss occurred, the master was authorized to procure another vessel and forward the cargo, and when thus forwarded he would be entitled to the freight. While the cargo remained in Rio, the subject of the insurance was entirely lost. The additional expense was incurred in the safeguard and recovery of the subject insured, and hence it was held to be *Page 265 within the clause we are considering. It may be observed, in passing, that the amount insured upon the charter freight was £ 2,000 while the sum thus expended in the safeguard and recovery of the freight was over £ 2,500. The second important decision in the case was, that it was not necessary that an abandonment should have taken place, by which the property would become substantially that of the underwriter. The learned judge says: "The meaning is obvious, that if an occasion should occur in which, by reason of a peril insured against, unusual labor and expense are rendered necessary to prevent a loss for which the underwriter would be answerable, and such labor and expense is incurred accordingly, the underwriters will contribute not as a part of the sum insured in case of loss or damage, because it may be that a loss or damage for which they would be liable is averted by the labor bestowed, but as a contribution on their part as persons who have avoided detriment by the result, in proportion to what they would have had to pay if such detriment had come to a head for want of timely care. * * In this case there is no abandonment and may be no prospect of one; and yet it is the duty of the master to use all reasonable means to preserve the goods, and obviously for the interest of the underwriters to encourage him in the performance of that duty by contributing to the expenses incurred." (Id., 543.) This case was affirmed upon appeal to the Exchequer Chamber upon substantially the same grounds on which it was placed in the Common Pleas. (2 Law Rep. Com. Pleas, 357.) This case is a clear authority that the plaintiffs' rights in the case before us are not prejudiced by the non-existence of an abandonment. On the other branch of the case the authority is not so strong. The vessel was in port at Balize. The general average expenses of $581 had been incurred, for which the defendant is responsible. There she was, and such as she was, her owners, had, and could use her in their discretion. It was not like the case of the freight which required an expenditure to give it an actual existence. The vessel was present in port, physically. How much she was worth there *Page 266 before the repairs, or how much she was worth there after the repairs, does not appear. Nor does it appear whether she was worth more or less there than in New York. But she was there and had some value. I do not see how it can be said that the repairs at Balize were about the "defence, safeguard or recovery" of the vessel. She needed no defence or safeguard. She was quietly in the port of a friendly nation. She was safe from storms or perils, nor was any expense needed or incurred for her recovery. She was in the master's hands, and no one proposed to interfere with her. Although she would not have been safe at sea, she was safe in port. Expenses for the safeguard of a ship cannot properly be said to be those by which she is put in a condition of seaworthiness. The two ideas are essentially different. The sum of $8,769, spent at Balize, was for the improvement of the vessel, rather than for her safeguard, defence or recovery.
Phillips lays down the general rule that "An aggregate of losses exceeding the amount of the insurable interest of the subject on the policy is most frequent in cases of general average and total loss." (Phil., § 1268.) For this he cites the cases in Johnson which I have above referred to, and the present case when decided in the court below.
The Great Indian Peninsula Railway Co. v. Saunders is frequently referred to. (1 Best Smith, 101 Eng. C.L. Rep., 41; affirmed [2 B. S.], 110 id., 266.) In that case the policy was with the warranty "free from particular average, unless the sloop be stranded, sunk or burnt;" and it was upon the effect of this warranty that the chief discussion arose. The plaintiff procured by an insurance upon 1,995 bars of railway iron to Bombay by a policy, with this condition underwritten. It was held that this was a stipulation against total loss and general average only. The ship experienced such heavy gales that she was obliged to put into Plymouth, and was unable to proceed. The plaintiff shipped his rails by another vessel at an advanced price, and this he sought to recover from the defendants. The ship was neither stranded, sunk or burnt, and it was held that he could not recover, *Page 267 although there was, constructively, a total loss of the ship. The court say, in closing: "It was, however, further argued by Mr. James that the plaintiff was entitled to recover under the clause which authorizes the insured to sue and labor for the preservation of the subject-matter of the insurance. It is not necessary to decide whether an underwriter on a policy against a total loss only is, under this clause, liable for expenses incurred by the assured for the purpose of rescuing the subject-matter of an insurance from a state of peril which might have resulted in a total loss, but did not. There are reasons for and against this stated by Mr. Phillips in his treatise on Insurance (§ 1777), and the question seems never to have been actually decided; but in the present case it does not arise. The expenses here were incurred in forwarding the subject-matter of insurance to its destination at a time when the iron was not in any peril of a total loss, either actual or constructive."
The authority of this case is against the plaintiffs, as far as it is authority, but it is so different in its facts that it can scarcely be called an authority.
Upon an examination of all the cases to which attention has been called, I have not been able to find any that would authorize this recovery; nor do I think it comes within the spirit of the contract. Had full repairs been made at Balize the defendant would have been liable for them only to the amount of its insurance. The repairs were made for the improvement of the vessel, and these, it has been held, are not within the suing and laboring clause. The expenses were not incurred for the defence, safeguard or recovery of the property. There was no impending disaster against which they formed a protection. In my opinion, neither upon this clause nor upon the general terms of the policy, can the claim of the plaintiffs be sustained.
The question remains, whether the defendant altered its position by what took place on the fourth of November, 1864. About the 30th of August, the vessel had been got off from the rocks and taken into Balize. It was found upon examination *Page 268 that she required extensive repairs. Such repairs could not well be done where she lay at Balize. On the 7th of October, the master wrote to the plaintiffs that the vessel could get to some other southern port with very slight repairs; that the southern ports were closed, except Havana, which was too expensive, and that the work on the vessel was stopped. He gave an estimate of one mechanic for the repairs at $1,500 and another of $2,500, stating some particulars of the damage and his own idea of what repairs would be necessary to carry her to New York. On the receipt of this letter, it was taken to the defendant, a consultation was had, and "it was determined that the vessel should be temporarily repaired at Balize, and sent to New York for permanent repairs." The plaintiffs thereupon wrote to the master on the 4th of November, to the effect that the underwriters had left the matter in their hands, and they requested him to consult with their friend Antonio Mathè. "We wish you to put only such repairs as will be consideredperfectly safe to bring the brig to this port. * * In a word, whatever you and Mr. Mathè decide about the brig is approved beforehand." Upon this letter the defendant wrote as follows: "We, as underwriters on the hull of the brig Anto. Mathe, concur in the above. E.R. Anthony, Vice-President."
By this agreement, did the parties to it understand that the defendant consented to contingent increase of its liabilities, that it consented to assume responsibilities not then resting upon it, or was it a waiver of objections that might be made as to the time, place or circumstances in which its liability, as it then existed, might be reduced to form and shape? Both parties are assumed to have known the general principles governing the defendant's liability. Such no doubt was the case in fact. Those principles are as follows:
1. That the underwriter was liable for the proportion of the general average expenses in getting the vessel off from the rocks into the Balize.
2. That if she proved to be damaged to more than half her *Page 269 value, the owners might abandon, and the liability for $8,000 would at once attach.
3. That if damaged to less than that extent, and repairs were put upon her where she lay, the underwriters would be liable for eight-tenths of such repairs, provided it came within the limit of $8,000.
This was the precise condition, and these are the precise obligations of the parties. With these views in their minds, the plaintiffs authorize the master to make such repairs as would bring the brig in safety to New York. The master was in perplexity; should he have the vessel repaired at Balize, or should he take her to Havana? If the expenses are enormously large at Balize, and they were there incurred, would the underwriters be responsible? Should he risk a trip to New York on slight repairs, what would be for the interest of the owners? To relieve him the plaintiffs direct him to make the repairs at Balize, and the defendant concurs in the direction. They authorize him, in conjunction with Mr. Mathe, to act as his judgment shall determine.
Under this authority the master might have abandoned, if the facts were such as to justify it. He chose to make repairs. I cannot think that, in adopting either course, the legal relation of the parties was or could be altered thereby. The plaintiffs were still the party assured, the defendant was still the underwriter. The obligations connected with this relation remained as before. The details of the evidence by which to fix the liability are in some respects altered. The defendant would not be at liberty to say that repairs should not have been made in a port so expensive or to so great an extent; it could not challenge items. It could not insist that there should or should not have been an abandonment. It had authorized the master and Mr. Mathe to decide those questions, and must submit to their judgment. But it did not authorize any alteration of its relations with the plaintiffs; nor did it give the slightest intimation that it was willing to assume any new obligations. It was a liberal, courteous waiver of all technical objections that *Page 270 might arise, which it is unreasonable to attempt to wrest to its injury. It was as if it had said: "We are liable for eight-tenths of the repairs, not exceeding $8,000. We are liable for that amount if there is a total loss. You have an agent and a friend on the spot, who are sensible men. We are content that they should decide what had better be done, and we will pay according to our liability on these principles." This is the essence of the authority, and I can find in it no warrant for the judgment rendered.
Upon the whole case, I think, judgment must be reversed, and a new trial ordered.
All concur.
Judgment in accordance with opinion of LOTT, Ch. C.