U.S. Supreme Court Copelin v. Insurance Company, 76 U.S. 9 Wall. 461 461 (1869)
Copelin v. Insurance Company
76 U.S. (9 Wall.) 461
ERROR TO THE CIRCUIT COURT
FOR THE DISTRICT OF MISSOURI
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.
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
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.
MR. JUSTICE STRONG delivered the opinion of the Court.
Nothing in this record requires us to look beyond the
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
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
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.
[ Footnote 1 ]
7 Pickering 254.
[ Footnote 2 ]
1 Metcalf 160.
[ Footnote 3 ]
22 Pickering 191.
[ Footnote 4 ]
16 Ill. 235.