5. A consignee who refuses to accept uninjured goods, and unjustifiably endeavors to abandon them to the insurer, who refuses to accept the abandonment, cannot hold the in

surer liable for any loss sustained by the

forced sale of the goods.

6. An insurer which has stipulated in the policy that its acts in recovering, saving, and preserving the property in case of disaster shall not be considered an acceptance of abandonment cannot be deemed to accept an attempted abandonment of the goods by carrying them from a place where there is no agent of the assured, no adequate means of protection, and no market, to the port of destination where there are excellent facilities for protecting and handling them, easy access to the head agency of the assured, and a good market.

[No. 6.]

N WRIT OF CERTIORARI to the Unit

0ed States Circuit Court of Appeals for

the First Circuit to review a decision affirming a decree of the Circuit Court in an action at law brought on a policy of marine insurance in a state court and thence removed into the Circuit Court of the United States for the District of Massachusetts. Affirmed. See same case below, 50 U. S. App. 231, 82 Fed. Rep. 296, 27 C. C. A. 134.

ber 15, 1900.

Pecle v. Merchants' Ins. Co. 3 Mason, 27, Fed. Cas. No. 10,905.

The acceptance of an abandonment is to be by something distinct and unequivocal. O'Leary v. l'elican Ins. Co. 29 N. B. 510 (Per King, J.). To the contrary is Hudson v. Harrison, 6 J. B. Moore, 288, 3 Brod. & B. 97, in which insurers who took no action for nearly three months after a meeting of underwriters was called, some of whom attended and authorized the insured to act for the benefit of all concerned, when they interposed to prevent a sale of the recovered cargo on their account, were held to have acquiesced in the abandonment of the cargo by notice given immediately after loss.

The court said that the obligation of the assured to elect within a reasonable time whether

he will abandon or not implies a corresponding obligation on the insurer to accept or reject the abandonment within a reasonable time.

V.

But in Provincial Ins. Co. v. Leduc, 43 L. J. P. C. N. S. 49. L. R. 6 P. C. 224, 31 L. T. N. 8. 142, 22 Week. Rep. 929, the court, in answer to the contention that the silence of an insurer may be construed to be an acceptance of an abandonment, in support of which Hudson Harrison was cited, said: "It is not necessary to go to that length in this case. Their lordships consider that Mr. Justice Story was correct in stating that an insurer is not bound to signify his acceptance of an abandonment. If he says nothing and does nothing the proper conclusion is that he does not mean to accept." Underwriters who neither expressly assent to an abandonment of a cargo, nor perform any act indicating their acceptance, cannot hold the insured to his abandonment, or insist that by reason of such abandonment they become substituted to the cargo or its proceeds, in the insured's right, according to the proportion covered by their policy. Child v. Sun Mut. Ins. Co. 2 Sandf. 76.

III. Taking possession to raise and repair.

a. In general.

The earliest case is Peele v. Merchants' Ins. Co. 3 Mason, 27, Fed. Cas. No. 10,905, in which underwriters, by taking the sole possession and management of a stranded vessel after abandonment, raising and subsequently repairing her, were held thereby to accept the abandonment.

But in another case arising out of the same wreck, the supreme court of Massachusetts was

*Statement by Mr. Chief Justice Fuller: [2] This was an action at law brought in the superior court of Massachusetts for the county of Suffolk, and thence removed into the circuit court of the United States for the district of Massachusetts, by the Washburn & Moen Manufacturing Company against the Reliance Marine Insurance Company (Limited) of London, England, on a policy of in the sum of $48,800, on a cargo of wire of the opinion that an underwriter may take an abandoned vessel into his possession and repair her, the assured refusing to do it, and if he can do this at an expense less than half her value he may restore the vessel to the assured, and thus avoid paying for a total loss. Peele v. Suffolk Ins. Co. 7 Pick. 254, 19 Am. Dec. 286. So, underwriters who take possession of a stranded vessel, and within a reasonable time tender her substantially repaired and restored to the insured, who makes no objection to the sufficiency of the repairs, cannot be treated as having accepted the abandonment. Marmaud v. Melledge, 123 Mass. 173.

Taking possession of an abandoned vessel and repairing it do not amount to an acceptance of the abandonment, where accompanied by an express refusal to accept the abandon

ment. Marine Dock & Mut. Ins. Co. v. Goodman (Ala.) 4 Am. L. Reg. 481.

But if the conduct of an insurer implies an acceptance of an abandonment, such acceptance is to be legally presumed, notwithstanding the declared intent of the party to the contrary, the actual intent in such case being immaterial. Badger v. Ocean Ins. Co. 23 Pick. 347.

In Gloucester Ins. Co. v. Younger, 2 Curt. C. C. 332, Fed. Cas. No. 5,487, the principle laid down in Peele v. Merchants' Ins. Co. 3 Mason, 27, Fed. Cas. No. 10.905, supra, that if an insurer takes and retains possession of a vessel for the purpose of repairing it he thereby accepts an offer of abandonment, was followed over an objection that the policy in question was made and was to be executed in Massachusetts, under whose laws the insurers had a right to take possession of a vessel when an offer of abandonment was made, and seasonably repair and restore her to the insurer. The court said that the question was not one of mere local municipal law, but one arising under the law merchant, and that the decisions of the courts of another state were not binding on the Federal courts, and that the latter had no right to conform to them when they believed them not to announce the true rule.

By delaying the repairs beyond a reasonable time the underwriter forfeits his right to return the ship, and must be considered as taking her to himself under the offer to abandon. Peele v. Suffolk Ins. Co. 7 Pick. 254, 19 Am. Dec. 286.

Neglect of the underwriters to raise, repair, and restore a stranded vessel to the insured within a reasonable time after taking posses

shipped from Boston to Velasco, Texas, on the schooner Benjamin Hale, John Hall, master.

The memorandum clause of the policy ran thus: "Memorandum. It is also agreed that bar, bundle, rod, hoop, and sheet iron, wire of all kinds, tin plates, steel, madder, sumac, wickerware, and willow (manufactured or otherwise), salt, grain of all kinds, tobacco, Indian meal, fruits (whether preserved or otherwise), cheese, dry fish, hay, vegetables and roots, rags, hempen yarn, bags, cotton bagging, and other articles used for bags or bagging, pleasure carriages, household furniture, skins and hides, musical instruments, looking-glasses, and all other articles that are perishable in their own nature, are warranted by the assured free from average, unless general; hemp, tobacco stems, matting, and cassia, except in boxes, sion of the vessel for that purpose amounts to an acceptance of the abandonment, and renders them liable as for a total loss. Reynolds v. Ocean Ins. Co. 22 Pick. 191, 33 Am. Dec. 727. After a vessel has been abandoned by her owner, and taken into custody by the insurer with a view to raising and repairing her, unless she is repaired and tendered to the owner within a reasonable time the insurer forfeits his right to return, and must be considered as having accepted the abandonment. Copelin v. Phoenix Ins. Co. 46 Mo. 211, 2 Am. Rep. 304.

Underwriters who act upon a notice of abandonment without inquiring as to the cause of accident, take the vessel in charge, place her in dry dock, cause her to be repaired at great expense, and retain possession without offering to return her to the owners, cannot, as a defense to an action brought upon the policy, set up a claim that the acceptance is not conclusive on the ground that the loss was occasioned by perils not insured against, of which the insurer was ignorant until after the repairs were made. Richelieu & O. Nav. Co. v. Thames & M. Marine Ins. Co. 72 Mich. 571, 40 N. W. 758.

There is an unsupported dictum in Marine Dock & Mut. Ins. Co. v. Goodman (Ala.) 4 Am. L. Reg. 481, to the effect that the qualification asserted in Reynolds v. Ocean Ins. Co. 22 Pick. 191, 33 Am. Dec. 727, supra, that the underwriter must repair and tender the vessel within a reasonable time, is unwarranted by the principle upon which the underwriter takes possession and repairs.

Deficiencies in the repairs or equipment of the vessel when tendered to the assured will not render the underwriters liable as having accepted the abandonment, where the assured makes no objection on account of the insufficiency of the repairs, and points out no deficiencies. Reynolds v. Ocean Ins. Co. 22 Pick. 191, 33 Am. Dec. 727.

But the refusal of the underwriters, or their unreasonable neglect to supply the deficiency in repair or equipment pointed out by the assured at the time of the offer to restore, amounts to an acceptance of the abandonment, and entitles the insured to recover as for a total loss. Ibid.

And the assured need not point out deficiencies which are obvious, and are very great when compared with the repairs actually made. Copeland v. Phoenix Ins. Co. Woolw. 278, Fed. Cas. No. 3.210, Aff'd in Copeland v. Phoenix Ins. Co. 9 Wall. 461, 19 L. ed. 739.

Insurers against total loss and general aver age who raise a ship which was voluntarily stranded and abandoned to them, and tender

free from average under 20 per cent unless general; and sugar, flax, flaxseed, and bread are warranted by the assured free from average under 7 per cent unless general; and coffee in bags or bulk, pepper in bags or bulk, and rice, free from average under 10 per cent unless general."

And on the margin the following was stamped or written: "Free of particular average, but liable for absolute total loss of a part if amounting to five (5 %) per cent." It was also provided: "And in case of any loss or misfortune, it shall be lawful and necessary to and for the assured, their factors, servants, and assigns, to sue, labor, and travel for, in, *and about the defense, safe- [3] guard, and recovery of the said goods and merchandise, or any part thereof, without prejudice to this insurance; nor shall the acts of the insured or insurers in recovering, her back to the owners without making or offering to pay the cost of any repairs other than those made by them as necessary to keep the ship afloat, must be deemed to have accepted the abandonment. Northwestern Transp. Co. v. Continental Ins. Co. 24 Fed. Rep. 171.

Whether the insurer accepts the abandonment or not is a matter of construction of his words and conduct. Any act done for the purpose of making the most of the property, to whomsoever it may prove to belong, ought not to be construed against the party who thus seeks the common interest. Richelieu & O. Nav. Co. v. Boston Marine Ins. Co. 136 U. S. 408, 34 L. ed. 398, 10 Sup. Ct. Rep. 846.

In Northwestern Transp. Co. v. Thames & M. Ins. Co. 59 Mich. 214, 26 N. W. 336, the court said that the act of an insurer in recovering a stranded vessel would be construed most strongly against it as its interest was a matter entirely within its own knowledge, and by speaking it had the power to solve all doubts and dispel all ambiguities; and, although no duty rested upon it to say whether it accepted the abandonment or not, so long as it was both silent and inactive, yet when it did act, its duty was to say for what purpose and with what intent it proposed to act.

So, insurers who, after notice of abandonment, take possession of a vessel, repair, and retain her in their possession from the time it is raised up to the time of libeling it for salvage expenses, without repudiating the notice of abandonment and informing the assured as to the character in which they are acting, must thereby be deemed to have accepted the abandonment and to have become liable as for a total loss. Provincial Ins. Co. v. Leduc, L. R. 6 P. C. 224, 43 L. J. P. C. N. S. 49, 31 L. T. N. S. 142, 22 Week. Rep. 929.

And insurers against total loss only, who take unconditional possession of an abandoned vessel without giving notice of their object, and proceed to repair her, and make no tender to the owner, being unwilling to restore her except on condition that their expenses are repaid or secured to them, must be deemed to have accepted the abandonment. Cincinnati Ins. Co. v. Bakewell, 4 B. Mon. 557.

b. Effect of “sue and labor" and other clauses.

To meet the decision in Peele v. Merchants' Ins. Co. 3 Mason, 27, Fed. Cas. No. 10,905, supra, policies of marine insurance were amended so as to provide that the acts of the insured or insurers in recovering, saving, and preserving the property should not be considered a waiver, or acceptance of the abandonment.

The Benjamin Hale sailed for Velasco, March 31, 1893, and on April 15 ran ashore on Bahama Banks, but, after throwing overboard 200 reels of barbed wire, floated and proceeded. On the night of April 19 the schooner again ran ashore, on Bird Key, near Dry Tortugas, and largely filled with water. Wreckers came on board April 21. The master went to Key West, and from thence telegraphed the Washburn & Moen Company, April 24, that the vessel was ashore, and he thought the loss was total. April 24, 25, or 26 the agent of that company told the agent of the insurance company, in

In Gloucester Ins. Co. v. Younge, 2 Curt. C. C. 332, Fed. Cas. No. 5,487, this clause was held to have no reference to repairs other than those which may be needful for the temporary preservation of the property and its relief from perils within the policy, and therefore not to confer upon the insurer a right to take possession of an abandoned vessel and seasonably repair and restore her to the insured.

But taking possession of and repairing an abandoned vessel is not conclusive evidence of an acceptance of the abandonment, where the 'policy provides that in case of the neglect or refusal of the assured to adopt measures for the safeguard and recovery of the vessel the insurer may interpose and repair her on account of the assured. Norton v. Lexington F. L. & Marine Ins. Co. 16 Ill. 235.

And an insurer, by taking possession of and selling a cargo which has been damaged by a cause expressly excepted from the terms of the policy, does not become liable as for a total loss, unless its acts amount to a conversion for which it would be liable, where the policy provides that the acts of the insurer in saving or disposing of the property shall not be considered a waiver or acceptance of an abandonment, or as affirming or denying any liability under the policy. Schuyler v. Phoenix Ins. Co. 134 N. Y. 345, 32 N. E. 25.

Insurers who take possession of an abandoned vessel to repair her, under the authority conferred on them by the policy, must return her, properly repaired, within a reasonable time, or they will be deemed to have accepted the abandonment, although they were not bound by it when made. Norton v. Lexington F. L. & Marine Ins. Co. 16 Ill. 235; Copelin v. Phonix Ins. Co. 9 Wall. 461, 19 L. ed. 739; Reynolds V. Ocean Ins. Co. 1 Met. 160.

Insurers who retain possession of an abandoned vessel for more than six months and then offer to return her only partially repaired, will be deemed to have accepted the abandonment, notwithstanding a stipulation in the policy that the acts of the insurers in preserving, securing, or saving the property insured, in case of danger or disaster, shall not be considered an acceptance of the abandonment. Copelin v. Phonix Ins. Co. 9 Wall. 461, 19 L. ed. 739.

Underwriters who take possession of insured property under the sue and labor clause will be deemed to have dealt with it in such a manner as to make it their own. where, after the refusal of the owner to accept the vessel with partial repairs, they retain her, without appar ent excuse, until more than half the season of navigation has passed, and then make another

the troubles, and said that he wished to abandon the cargo to the underwriters." April 29 a written notice of abandonment was given, which the insurance company explicitly declined to accept. The master returned at once with further assistance, reaching the wreck the morning of April 25, and the vessel was floated April 29, and finnally taken to Key West, arriving May 4. The captain testified that "from the time the vessel went ashore until she came off they were taking the cargo out as they could so as to get her off. Think about one half of cargo was discharged on the reef, of which he thinks about 1,300 reels were dry." This was substantially all carried to Key West, where the unloading was completed May 10.

Captain Hall made a memorandum at Key

tender while the vessel is still in an incomplete condition. Young v. Union Ins. Co. 24 Fed. Rep. 279.

Insurers who, after an abandonment and refusal to accept, take possession and control of a stranded vessel, with the purpose and design of getting her off, repairing, and restoring her, are bound, from the time they take possession with that intention, to use reasonable diligence, as well in getting her off as in repairing her after her arrival in port, notwithstanding a clause in the policy providing that no act done by the insurers towards saving the property shall be deemed to be a constructive acceptance of an abandonment. Reynolds V. Ocean Ins. Co. 1 Met. 160.

The duty of an underwriter, when he takes possession and recovers a stranded vessel, to proceed with due diligence to put her in repair, is not modified by a provision in the policy that, in case of the neglect or refusal of the insured to take measures for the safeguard and recov ery of the vessel, or to repair the same when recovered, the insurer may interpose and recover the vessel, or, after recovery, cause her to be repaired, or both, for account of the insured. Northwestern Transp. Co. v. Thames & M. Ins. Co. 59 Mich. 214, 26 N. W. 336.

The neglect of an insurer, after taking possession of a stranded vessel, to effect the rescue until more than six months after the disaster, and more than five months after her abandon. ment by the assured, and his failure to cause repairs to be made after recovering her and taking her to port, or to tender the amount found necessary by the survey to place her in repair, constitute an acceptance of the abandonment notwithstanding a provision of the policy that the acts of the insurer in recovering, saving, and preserving the property insured, in case of disaster, shall not be considered a waiver or an acceptance of the abandonment. Ibid.

Underwriters who, after refusing to accept an abandonment, elect to take possession of the vessel under the rescue clause, which secures to them their expenses if successful, either out of the vessel or from the insured, become 11able to the latter as for an "actual total loss," by permitting the vessel to be sold to satisfy a lien in favor of a wrecking company which they have employed to save the vessel. Security Ins. Co. 109 N. Y. 505, 17 N. E. 369.

IV. Other conduct.

Carr v.

Any act done by the underwriters in consequence of an abandonment, which can be justified only under a right derived from it, is of

Kettell v. Alliance Ins. Co. 10 Gray, 144; Delaware Ins. Co. v. Winter, 38 Pa. 176; Patapsco Ins. Co. v. Southgate, 5 Pet. 604, 8 L. ed. 243; Moses v. Columbian Ins. Co. 6 Johns. 219.

The circuit court ruled that the defendant was not liable for a constructive total loss; that the transshipment of the cargo at Key West, though made by the underwriters as he thought it was, did not, under the circumstances, make them liable for the property as underwriters; and that "inasmuch as a portion of this cargo-a considerable portion, including the staples and a very large percentage of the fencing wire was at Key West in a condition to be transshipped, and did in fact arrive at Velasco in specie, and suitable for the purposes for which it was intended, although not so suitable as it would have been if it had not been submerged in the sea," there was no absolute total loss of the whole.

Ellicott v. Alliance Ins. Co. 14 Gray, 318; Wallace v. Thames & M. Ins. Co. 22 Fed. Rep. 66; Tudor v. New England Mut. Ma rine Ins. Co. 12 Cush. 554; Northwestern Transp. Co. v. Continental Ins. Co. 24 Fed. Rep. 171.

If goods or vessels are insured by a policy containing any one of the clauses, "free of particular average," "free of partial loss," "free of average unless general," or "against total loss only," the insured can recover for a total loss where they are damaged to the extent of 50 per cent and there has been a seasonable abandonment.

Heebner v. Eagle Ins. Co. 10 Gray, 131, 69 Am. Dec. 308; Kettell v. Alliance Ins. Co. 10 Gray, 144; Mayo v. India Mut. Ins. Co. 152 Mass. 172, 9 L. R. A. 831, 25 N. E. 80; Greene v. Pacific Mut. Ins. Co. 9 Allen, 217; Pierce v. Columbian Ins. Co. 14 Allen, 320.

Judgment was rendered in favor of plaintiff, and each party prosecuted a writ of error from the circuit court of appeals.

That court concurred in the rulings of the circuit court, but was of opinion that the cargo was forwarded from Key West to Velasco under authority of the captain of the Benjamin Hale. 50 U. S. App. 231, 82 Fed. Rep. 296, 27 C. C. A. 134.

Judgment having been affirmed, the Washburn & Moen Manufacturing Company ap plied for and obtained a writ of certiorari from this court.

Errors were relied on by petitioner, in substance, that the circuit court erred in not ruling that plaintiff was entitled to recover for a constructive total loss under the policy; and in not allowing the question whether there was an absolute total loss to go to the jury; or the question whether defendant had accepted plaintiff's abandonment of the cargo.

Mr. Eugene P. Carver argued the cause, and, with Mr. Edward E. Blodgett, filed a brief for petitioner:

Under the usual form of policy the assured can recover for a constructive total loss of cargo, provided there has been an abandonment duly made, if the loss or in

2 Arnould, Ins. Perkins' ed. 852, 856;

Mayo v. India Mut. Ins. Co. 152 Mass. 172, 9 L. R. A. 831, 25 N. E. 80; Pierce v. Columbian Ins. Co. 14 Allen, 320.

It was a question of fact for the jury as to whether, on all the evidence, the defendant company had not accepted the abandon

ment.

Orient Ins. Co. v. Adams, 123 U. S. 67, 31 L. ed. 63, 8 Sup. Ct. Rep. 68; Peele v.

Merchants' Ins. Co. 3 Mason, 27, Fed. Cas. No. 10,905; Copelin v. Phoenix Ins. Co. 9 Wall. 461, 19 L. ed. 739; Richelieu & O. Nav. Co. v. Boston Marine Ins. Co. 136 U. S. 408, 34 L. ed. 398, 10 Sup. Ct. Rep. 846; North western Transp. Co. v. Continental Ins. Co. 24 Fed. Rep. 171; Carr v. Security Ins. Co. 109 N. Y. 505, 17 N. E. 369; Cossman v. British America Assur. Co. L. R. 13 App. Cas. 161.

If the use of the property insured, for the purpose for which it is made, requires an expenditure greater than the property is worth after that expenditure, then it is the case of an actual total loss, and no abandonment is necessary.

Wallerstein v. Columbian Ins. Co. 44 N. Y. 240, 4 Am. Rep. 664; Bullard v. Roger Williams Ins. Co. 1 Curt. C. C. 148. Fed. Cas. No. 2,122; Kinsman v. China Mut. Ins. Co.