2 U.S. 280
2 Dall. 280
1 L.Ed. 381
Camberling
v.
M'Call
Supreme Court of Pennsylvania
December Term, 1797
This was an action on the case, on a Policy of Insurance dated the 28th of October 1786, on the schooner John, Nathaniel Simmons master, on a voyage from Bath, or Washington, in North Carolina, to the Island of St. Thomas. It was a valued policy, in which the Plaintiff's moiety of the Schooner was valued at L 300; and the action was brought for a total loss.
The cause was first tried by a special Jury in September Term 1796, when a general verdict was found for the Plaintiff, with 289 dollars and 84 cents damages; but, in consequence of an agreement between the counsel, there was a second trial in March term 1797, when the jury found a special verdict, in these terms.
'And now at March term A. D. 1797, to wit on the twenty-fourth of the said month, a jury to wit, &c. being duly impanelled, tried, sworn and affirmed, respectively, to try the issues joined between the parties aforesaid, on their oaths and affirmations aforesaid, say, that on the 28th October 1786 the plaintiff then and ever since resided in the state of North Carolina, was owner of one half of the schooner in the declaration mentioned, her tackle, apparel and furniture, of the value of three hundred pounds, lawful money of Pennsylvania, and on the same day caused the same to be insured (prout policy) which on the day and year aforesaid, at the County aforesaid, for the consideration or premium therein mentioned, was underwritten by the defendant, for the sum of one hundred pounds, lawful money, for the voyage, in the said policy mentioned; that the said schooner, on or about the ninth day of November 1786, was cleared out, and failed on the voyage in the policy mentioned, and to the knowledge of the said Jurors, has never since been heard of; from whence, the Jury presume that the said vessel and cargo, were sunk, and totally lost; that some time in the year 1787, the captain and seamen, who failed in said schooner, on the voyage aforesaid, were in the State of Virginia, and notice thereof was afterwards, and before the date of the plaintiff's letter, of the first of November 1792, given to the plaintiff; but at what particular time, the Jurors know not; that the plaintiff did not give any notice thereof, or of the supposed loss of the said schooner, to the defendant until the first day of November 1792, when the plaintiff informed the defendant by letter, that the said schooner had sailed about the ninth of November 1786, on the voyage in the policy mentioned, and that he had not since seen nor heard from the said captain, nor received any part of the property in the vessel or cargo, nor had any person on his behalf; which information the Jury find to be true; and the said Jurors further find, that the plaintiff did not abandon to the defendant, and to the other underwriters, on the said policy, or to either of them, his property in the said schooner, or any part thereof, before the bringing of the said action; nor has he since abandoned the same; nor was any other proof made of the said loss, previously to the bringing of the said action, than the information given as aforesaid, by the plaintiff to the defendant. And the Jurors aforesaid, further find, that John Kaighn one of the partners of Kaighn and Attmore, who effected the said insurance, as agent of the plaintiff, has ever since resided in the City of Philadelphia, and had, until the present action was brought, the policy aforesaid in his possession; and that the defendant has ever since the date of the said policy resided in the City of Philadelphia. If upon these facts the law be with the plaintiff, they find for the plaintiff, and assess damages to the amount of ninety-eight pounds, with interest from December 1, 1794, amounting in the whole to L. with fix pence costs; but if the law be with the defendant, they find for the defendant.'
The arguments before the Jury on the trials, and before the Court on the special verdict, were, in substance, as follow.
For the plaintiff, M. Levy insisted, that every fact, which could be necessary to entitle his client to recover, was found by the special verdict: For, when a vessel has never been heard of, after such a lapse of time, the legal presumption is, that she is lost. 2 Stra. 1199. Parke. 71. 2.
For the defendant, Lewis urged two points: 1st. That proof of a loss had not been made three months previously to the commencement of the present action, agreeably to the stipulation contained in the policy. 2nd. That the assured had never abandoned to the underwriters.
On the first point he observed, that the memorandum at the foot of the policy provided, that 'in case of a loss, the money shall be paid in three months after proof of the same'; and if the underwriter was entitled to three months for making payment, after the proof had been exhibited, there was no cause of action at the time this suit was instituted. Some previous evidence of the loss was indispensable, by the express agreement of the parties. The nature of the evidence is not particularly defined; but the protest of the captain, the affidavit of one of the seamen, or some other credible attestation of the fact, should have been furnished. If a creditor agrees to give a day for payment, after a certain event takes place, he cannot sue before that day arrives. In the present instance, it is not sufficient to make the proof in Court; it should be made in pais; as in the case in Palmer 160, where the ground of action was a declaration by the defendant, that 'after you have proved that I struck you, &c. then I do assume to pay you L 20.' The plaintiff's letter demanding payment of the underwriters was dated the 1st of November 1792; and the suit was instituted the 1st of January 1793. The objection must, therefore, be fatal to the right of action.
On the second point, it was insisted, that the duty of the assured required him to give notice of the loss, in a reasonable time, and to abandon to the underwriter. Parke. 71. 2. 161. 2 Mag. Ins. 174. 177. Had this been done, the underwriter would have been enabled to make a diligent and seasonable enquiry after the vessel; which may not have been found, because she has not been properly sought for. Six years elapsed between the date of the policy, and the notice of the loss. The delay is unreasonable; and, if it does not entirely destroy all means of investigation, must certainly encrease to the underwriter, the uncertainty and difficulty of ascertaining the reality of the loss; while it opens a door to the assured for the perpetration of the greatest frauds. It is for this reason, that the law not only requires an abandonment, in such cases, but the abandonment should be made on the first opportunity; and that, even where there is no hope of recovering any part of the property. It is like the case of notice to the drawer of a Bill of Exchange when the drawee refuses payment. 1 T. Rep. 613. 4. Wesk. p. 5. s. 15. Ibid. p. 344. s. 3. Ibid. 546. s. 4. 2 Mag. 174. 2 Emerig. 173.
In reply, M. Levy observed, on the first point, that the proof of the loss arose, in legal contemplation, from the fact, that the vessel had sailed, but for an unreasonable length of time had not been heard of; and therefore, he insisted, that it was not necessary to make the proof of loss at the Insurance Office, three months before the right of action accrued. In answering the second point, he treated the idea of an abandonment, where no portion of the property was saved, as novel, unprecedented, and absurd. The term abandonment has received a fixed and definite signification; to which, it is essential, that something should be saved, in order that something may be abandoned. Parke. 161. T. Rep. 613. 4. The real purpose, for requiring an abandonment, must be to transfer to the underwriters the property and the means of reclaiming and preserving it, which must otherwise continue in the assured. But when it is demonstratively obvious, that the subject matter has utterly ceased to exist; that the loss is total and final; as where a ship has been consumed by fire, or has sunk in the ocean; what can be the use, or benefit of an abandonment? And if there can be no use, Lex neminem cogit ad vana seu impossibilia. The fallacy of the opposite argument lies in an application of the duties, which the law has imposed upon the assured, in the case of one description of a total loss, to a total loss of an entirely different description. The term 'total loss,' in relation to insurances, is technical; and includes, as appears from Parke 110. 61. two species; one, where a part of the property has been saved, and still exists; the other, where the whole property is utterly destroyed. In the former case, abandonment is necessary to the safety of the insurer; it is the title, without which he cannot reclaim the residuum, nor exercise those acts of ownership, that are essential to reduce it to possession. But in the latter case, no such purpose can be contemplated, or attained; and the common sense of mankind would be startled at the idea, that it was necessary to give up to another, the ownership of a thing not in being; of a thing which had been completely annihilated. To require this useless and absurd act, from the assured, under the heavy penalty of forfeiting his insurance, would be wantonly oppressive and unjust. The analogy, stated by the opposite counsel, between notice of abandonment, and notice of a protested bill of exchange, is admitted and adopted: But, it must be recollected, that the holder of the bill neglecting to give notice, only loses his recourse upon the drawer, in case the drawee had effects in his hands; for, if the drawee had no effects, there need not be notice given of the refusal to accept, or pay; and the holder shall not lose his debt for omitting to give a notice, which could be of no use to the drawer. 1 T. Rep. 410. The principle and authority of the cases are the same. If any thing exists, that can be abandoned, the insurer ought to have notice; but if a notice can be of no use to him, there can be no reason why he should receive it, any more than the drawer of a bill of exchange, who has no effects in the hands of the drawee. It is true, that it would be expedient, on the part of the assured, to give notice and abandon, under any circumstances of loss; because then, if any portion of the property insured was saved from the general wreck, he would have a complete right to an indemnity; which he would not have, should a part of the property be saved, and he has neglected that precaution. The omission, however, is at the peril of the assured; and the risques to which the omission exposes him, will always be a sufficient guard against fraud. Every prudent man will give the notice: (O designing man will neglect it, lest it should frustrate his purpose. Those who omit it will, therefore, generally, be of that description of men, from whom little is to be feared; and the omission will be the mere effect of inadvertancy, or ignorance. But, although prudence recommends the practice, the law does not enjoin it. If, indeed, it is made essential, that notice, which was intended only for a shield against the assured, will be converted into a sword, in the hands of the underwriter; and a Court of Justice must condemn the owner of a vessel and cargo to sustain the loss, against which he meant to secure himself, merely for omitting a form, which, if complied with, could not have produced the slightest advantage to the underwriter. The penalty is surely disproportioned to the transgression.
On the first trial, the Court, in the charge to the Jury, expressed a wish, that the plaintiff had given earlier notice of the loss to the underwriters; as it would have rebutted every suspicion of unfair and collusive conduct. 'It was enough, however, (the Chief Justice observed) that no fact of that kind had been proved, nor, indeed, alledged; since fraud is never to be presumed. The defendant's counsel has urged, that, before the assured can recover for a total loss, there must be an express and seasonable abandonment. But by the word 'abandonment,' I understand a yielding, ceding, or giving up; and, in general, it applies to cases, where there has been a great loss, and the assured, resorting to the policy for an indemnity, surrenders whatever is left of the property insured to the underwriters. We cannot, however, conceive, that when there is nothing left to give up, there can be any thing to abandon; and if there is nothing to abandon, it would be absurd, as well as useless, to insist upon a formal act of abandonment. Under all these circumstances of the case, therefore, we think that the plaintiff is entitled to recover the principal sum insured, and interest, to commence at the expiration of three months after the demand for payment.'
Verdict for the Plaintiff.*
After the second trial, and argument on the special verdict, The Court seemed to be of opinion, 'that the plaintiff could not recover; because, he had not made proof of the loss, according to the terms of the policy, three months previously to the commencement of the action.' No opinion was then, however, expressed on the second objection made by the defendant's counsel; but the Court asked, whether he would wave the objection to the time of commencing the action, that the cause might be decided on its merits? And he refused to comply.
The Jury, after being out some time, returned to the Bar, and declared they could not agree, on account of the lapse of time, and expressed a desire to examine Mr. Kaighn (who had effected the insurance as agent) relative to the character and conduct of the plaintiff. It thereupon appeared, that the witness had not heard from the plaintiff from 1786 till 1792, when he desired that the policy might be given to Mr. Rose to be recovered; and that, sometime before, in a conversation with the witness's partner, the plaintiff had said, as a reason for not applying to the underwriters, 'that he must obtain the captain's protest and vouchers of the loss, before he could recover on the policy.' It, also, appeared, that the plaintiff was a man of irreproachable character. The Jury, having received this further satisfaction, soon delivered a verdict for the plaintiff.