
    ROBERT A. ROBERTSON, and others, Plaintiffs, v. THE ATLANTIC MUTUAL INSURANCE COMPANY, Defendant.
    I. insurance marine against loss of .freight by THE PERILS OF THE SEA.
    1. Total loss—although some of the ca/rgo was saved, delivered, and the freight money therefor paid.
    
    
      a. Where the vessel, before reaching the port of delivery, but within a short distance of it, becomes a total wreck, and the master is drowned, and the assured, on receipt of the news, has an interview with the president of the assurer, who told him he had better telegraph to the consignee to find out the condition of the vessel, and to take at least a fifty per cent. . average bond; and to advise with one A., whom the president stated to be either the assurer’s or the underwriter’s agent at that port, the president also stating that it would be impossible to get an agent to go there; and thereupon the assured did so telegraph to the consignee, who advised with A., and he directed the vessel to be turned over to him, as the agent of the underwriters; and thereupon the consignor abandoned the vessel to him as such agent, and all subsequent steps in respect to saving cargo, .delivering portions thereof, and receiving the freight thereon, and selling portions thereof and receiving the proceeds of sale, were performed by him, or by his direction. Held,
    1. A total loss of the freight so far as the owners were concerned.
    
      a. This, although a portion of the cargo was saved and delivered, and the freight thereon, amounting to two thousand six hundred and seventy-six dollars, received, the expense of saving and delivering it amounting to five thousand eight and hundred and fifty-three dollars.
    3. That it was error to direct a verdict for only the difference between the amount insured, to wit: three thousand six hundred dollars, and the freight received, to wit: two thousand six hundred and seventy-six dollars.
    3. That under the circumstances, A. was the agent of defendant, and it was bound by his acts.
    Before Monell, Ch. J., Curtis and Speir, JJ.
    
      Decided June 1, 1874.
    Exceptions by plaintiffs ordered to be heard at general term.
    The plaintiffs sue to recover for a total loss of the freight of a cargo from. New York to Galveston, in Texas, by the “brig” “Ocean Wave,” valued at three thousand six hundred and twenty-four dollars and forty-two cents, insured by an open policy issued by "the defendant, August 16, 1867, for three thousand six hundred dollars. The vessel stranded in a storm on the island, on which Galveston is situated, on the outside three or four miles from the city, October 2, • 1867. The plaintiffs allege that thereby the freight money became totally lost. By the policy any loss was made payable to the plaintiffs. They were part owners of the vessel, and the other part owners assigned to them their interest in the claim. The answer admitted the stranding of the .vessel; and alleged that all, or nearly all the cargo was forwarded to Galveston,, and the freight thereon earned and paid to the plaintiffs, .or the persons owning or entitled to receive the-same. The answer further claimed that plaintiffs received on account of the freight over three, thousand dollars, which the defendant, by the terms of the policy, was entitled to have credited on account of ' any claim for loss. On the trial, evidence was introduced that the “Ocean Wave” reached the outer-roads of Galveston harbor just before October 2, 1867 ; that she was there caught in a cyclone, and. October 2, 1867, went ashore and became a total wreck, and the-master was drowned. Parts of the cargo were saved. That which was not damaged was delivered to.the consignees, and the rest sold. The freight money on the-cargo delivered amounted to two thousand six hundred, and seventy-six dollars and ninety-six cents. The expense of delivering the portion of. the cargo rescued,, amounted to five xhousand eight hundred and fifty-three dollars and twenty-eight cents. The expense upon the portion of the cargo upon which freight was. collected, exceeded by two thousand dollars and upwards the freight upon it. The news of the disaster-did not reach Hew York until October 15, 1867, when a telegram informed the plaintiffs of the loss of the-vessel. Immediately afterwards, the plaintiff, Bergen, called upon the defendant, saw their president, and. was told by him that “ he had better telegraph to'Mr..Stackpole, to find ont the condition of the vessel, and to advise with Mr. Hunt the underwriters’ agent, or their (the defendant’s) agent, one of the two (M>. Bergen was not certain which), at Galveston, and to take at least a fifty per cent, average bond, and that on account of the yellow fever, it would be impossible to get an agent to go down there. Mr. Bergen did telegraph Mr. Stackpole, who was the consignee of the cargo, and who received the dispatch, took it to Mr. Hunt, and Mr. Hunt told him to turn over the vessel to him, as agent for the underwriters, and he did so. Mr. Hunt had been for several years agent of the underwriters, and caused an average bond to be drawn up which was signed by such of the consignees as received any part of the cargo. On the trial, Mr. Hunt’s clerk testified as follows:
    “A. Mr. Hunt asked Mr. Stackpole to send his receiving clerk to the vessel, and take charge of the vessel, and to employ men and drays and carts to remove the cargo to the city, subject to the orders of B. P. Hunt.
    
    
      “ Q. What did he direct Mr. Stackpole to do in the way of paying charges, if anything \
    
    “A. Mr. Hunt directed Mr. Stackpole to employ drays and carts, and bring it to the city, and to pay these draymen, and to bring the accounts to him, Mr. Hunt.
    
    
      u Q. Was any direction given by Mr. Hunt to Mr. Stackpole with reference to the freight upon such portion of the cargo as could be. delivered \
    
    “A. I believe he told him to collect the freight on the dry cargo, and make out bills against the damaged cargo sent to auction, and send them to the auctioneer.
    “ Q. Do you remember whether any order was given to Mr. Stackpole for the delivery of the cargo %■
    
    - “ A. I don’t know whether there was a written order; I think, on the signing of the bond, we sent an order to Mr. Stackpole to deliver the cargo to such consignees as signed, on receipt of the order.
    “ Q. Do you remember whether any orders were given to Mr. Stackpole for the delivery of the cargo ?
    “A. I believe there was.
    “ Q. State whether the damaged cargo, so far as it was saved, was sold, and if so, by whom, and if so, who received the proceeds ?
    “A. It was sold by order of Mr. Hunt, by the auctioneers.
    
      “ Q. Who received the proceeds of such sale ?
    “A. Mr. E. P. Hunt received a portion of them from the auctioneer; the auctioneer failed ; the auctioneer received the money from the purchasers, and before paying it all over to Mr. Hunt, they failed ; Mr. Hunt drew for a portion of the money and received it, and the rest was not received in consequence of their failure; that is as near as I can remember, .it is so long ago.
    “ Q. Do you know whether Mr. Stackpole paid the charges upon such portion of the cargo as was delivered to consignees ?
    “A. I believe he did.
    “ Q. Was there ever subsequently any account between Mr. Hunt and them in respect to the ‘ Ocean Wave ? ’
    “A. Yes, sir; Mr. Stackpole rendered us a separate and detailed account of every wagon and dray that was employed to haul the cargo. The amount was very large ; it cost nearly as much to bring the cargo into Gralveston from the beach as the freight from Hew York to Gralveston.” On his cross-examination he testified that he was present and saw Mr.' Stackpole getting the cargo out and bringing it to the city; that he saw, him have the crew paid off, and saw the vouchers attached to the accounts; that he instructed him how to proceed in the matter; the same as coming from Mr. Hunt, and that he acted for Mr. Hunt.
    The witness Stackpole testified, that he delivered no' cargo except, on the order of Mr. Hunt; that he did nothing in the premises except under Mr. Hunt’s orders and instructions ; and that he abandoned the whole vessel to him; and that he instructed him to take the money and use it in paying expenses from the wreck to Galveston.
    The defendant called no witnesses.
    The plaintiffs’ counsel asked the court to direct the jury to find a verdict for the plaintiffs for the amount of the insurance, with interest upon it. The motion was denied, and the plaintiffs excepted.
    The plaintiffs’ counsel asked the court to leave it as a question to the jury, upon the testimony, whether there had not been a total loss of the freight. The motion was denied, and the plaintiffs excepted.
    The court directed a verdict for the plaintiff's for the difference between two thousand six hundred and seventy-five dollars (the sum earned by carrying forward the freight) and three thousand six hundred dollars, with interest.
    The jury accordingly rendered a verdict for one thousand one hundred and seventy-nine dollars.
    The plaintiffs’ counsel excepted to the direction of the court. The court directed the judgment to be suspended, and the exceptions to be heard at the general term on the 1st instant.
    
      Man & Parsons, attorneys, and John E. Parsons of counsel, for plaintiffs, urged :—I.
    When Mr. Jones told Mr. Bergen to direct Mr. Stackpole to advise with Mr. Hunt, what he must have intended—what Mr. Bergen could only understand him to intend—was that Mr. Stackpole was to act under the advice, that is, should follow the orders and directions of Mr. Hunt. There was no limitation upon the extent to which the advice should reach, and when, therefore, on receiving Mr. Bergen’s dispatch, Mr. Stackpole called upon Mr. Hunt, ahd, under his advice, and his orders and instructions, turned over the whole case to him, Mr. Hunt’s action bound the defendant, and they, by their agent, having accepted the cargo, having collected the proceeds of that sold, and having received to their account the freight on that delivered, must pay the plaintiffs the insurance.
    II. Aside, however, from any question of the agency ' for the defendant, of Mr. Hunt, there was a total loss of the freight insured. The Ocean Wave never terminated her voyage. She was lost previously by the perils insured against. So far as the cargo was actually lost, there was a conceded loss of freight, and to forward the residue of the cargo to its destination, cost more than the freight money. This constituted a total loss of the freight (2 Pars. on Mar. Ins. 68 ; Irving v. Manning, 1 H. of L. Cas. 287; Roux v. Salvador, 1 Bing. (H. C.) 526). A total loss of a subject of insurance, is where, by the perils insured against, it is destroyed, or so injured as to be of trifling or no value to the insured, for the purposes or uses for which it was intended, or where the voyage or adventure for which the insurance is made, is otherwise broken up by the perils insured against (Phill. on Ins. § 1485). An indefinite detention of the vessel, or one for so long a period as to break up the voyage, is held to be a total loss of freight (2 Phill. on Ins. § 1630 ; see also § 1632). Although it is the duty of the master to forward the cargo if possible, the freight thus earned over the expenses to constitute savings (Bradhurst v. Col. Ins. Co., 9 Johns. 17). In the case of cargo, this doctrine has been established by the court of appeals in a recent case, where it was held, that there was a total loss of merchandise, although some portion of the goods might be brought into port in specie ; that where there „ was a total loss of value to the owner, total physical loss was not necessary (Wallerstein v. Columbia Ins. Co., 44 N. Y. 204). With reference to freight, it is laid down, that a total loss of the vessel, or of the voyage, is a total loss of the freight. In such case there may be savings of freight, which, of course, need to be credited against the amount of the insurance (2 Phill. on Ins. § § 1630, 1632, 1647, 1648. See, also, § 1637:—that where, in consequence of damages to the ship, the ship, cargo and freight are' hypothecated for the expense of repairs, to an amount- exceeding the value of ship and freight, this is a total loss of freight. A total loss of cargo is a total loss of freight (2 Phill. on Ins. § § 1642, 1644, 1725 ; see, also, Saltus v. Ocean Ins. Co., 12 Johns. 107; and Benson Chapman, 6 Nan. & G. 792). The defendants relied on the trial upon the case of Ogden y. General Mutual Ins. Co. (2 Duer, 204). In that case the freight was insured with the express provision that the company “ should not be liable for any partial loss whatever.” The vessel was not lost. She returned in distress to Hew York, where she was repaired. The master sent forward the portion of the cargo not jettisoned, by another vessel, at a largely increased freight. The court held he should have retained the cargo until his vessel was repaired, and then himself have earned it to its destination ; and it was because he did not do so, that the court held the defendants were not liable. It must be remembered that total loss in insurance does not mean actual, entire loss. Where a valued policy is issued, it makes a difference to the insured whether the adjustment is to be on the basis of a total loss, with a credit for savings, or of a partial loss,—in the former case the insured having the benefit of the valuation which may exceed the true value of the subject insured. All claimed here is not that there was an entire destruction of the freight, but that the vessel, not having completed her voyage, there was a total loss, with a right on the part of the company "to a credit oí net savings of freight.
    III. The defendant must concede that the plaintiff is entitled to recover more than the amount directed by Judge Barbour. In any aspect of the case, the freight saved was liable for contribution to the general average, and such Contribution would diminish the savings of freight, thus reducing the amount to be credited against the insurance. The vessel having been stranded for the benefit of all the interests, and- having been entirely lost, all the interests sacrificed, including vessel, loss of freight, and damage to cargo, were to be contributed for by the saved interests, which were the cargo saved, and the net freight received, with a deduction, in fact, of one-third from the net freight. In general average, gross freight is contributed for, but only two-thirds of the freight saved contributes (2 Phill. on Ins. § 1367).
    IV. Thus far the argument has proceeded upon no-claim of an abandonment. The circumstances permitted an abandonment, and had there been an abandonment by the insured to the defendant of the freight, there would be no question of their right to the entire insurance; but the arrangement between the plaintiff Bergen and the defendant’s president, followed by the action of Mr. Hunt at Galveston, amounted to an acceptance, and that dispensed with the necessity of an abandonment.
    
      Clifford A. Hand, attorney, and of counsel for defendant, urged :—I.
    In such a case, of stranding in or near the port of destination, and loss of vessel before unlading, and large expenses incurred in taking cargo from the wreck and delivering it, the question of ■ law is, whether the freight must bear the expenses as freight, instead of the cargo saved bearing them as salvage, {a.) The expenses were all of the nature and character of salvage of cargo for which salvors would have a lien on cargo. It would be absurd to spend so much more than the freight, merely to save the freight. A salvage claim is not joint, but against each portion of property for its own part (See Strafford v. Jarvis, 8 Pet. 4). (b.) If the cargo saved from the wreck at an intermediate port or place had performed but a part of its voyage, and had been reshipped by other vessels, at ordinary rates, to be carried the residue of the voyage, the freight, on such reshi pnaent, would not be of a general average character, but a special charge against freight, and a particular average loss (Mumford v. Com. Ins. Co. 5 Johns. 262 ; Searle v. Scovell, 4 Johns. Ch. 218 ; 9 Johns. 29). This was not such a case (See Bradhurst v. Columbia Ins. Co., 9 Johns. 17; Scheffelin v. New York Ins. Co., Id. 21). (c.) But being an expense to save cargo, the cargo must bear the charge of its separation and safety from the wreck, and of its cartage (some three or four miles) from the wreck to the place of delivery, which, in this instance, was also its place of safety (Heyliger v. New York Firemen’s Ins. Co., 11 Johns. 85; Lewis v. Williams, 1 Hall, 430).
    II. So far as the cargo was responsible for expenses, either upon principles of salvage or general average— the freight being actually collected, and there being no' abandonment of freight—there can be no recovery. The freight was earned and paid. The plaintiffs had the cargo in possession, deliverable only on payment of freight, and average accustomed. They had the lien,, and they alone could collect general average charges paid by them. The underwriters on freight are not responsible for mercantile losses by credits or bad debts, or for failures to collect at the port of destination. They insure the earning of freight, not its collection. Strong v. New York Firemen’s Ins. Co., 11 
      Johns. 323; Depau v. Ocean Ins. Co., 5 Cow. 63; Ogden v. General Mutual Ins. Co., 2 Duer, 204; Fiedler v. New York Ins. Co., 6 Duer, 282). (a.) If a vessel be greatly damaged, though a part or the whole be reimbursable in general average, or a cargo be jettisoned and 'entitled-to be reimbursed in part, it is true the whole may, in some cases, be recoverable from an underwriter of such vessel or cargo, leaving the latter to collect of other interests. But this doctrine, resting, mainly upon the effect of an abandonment, has no application to a mere expenditure, the things insured not being lost or sacrificed (See 1 Caines, 215-16, citing Abb. on Shipp. 296; explained, 2 Arnould on Ins. 949, 950, 952; and explained in 7 Johns. 57, 412). (b.) And it has no reference to freight-money earned or paid. Freight may have to bear, in some cases, its own share of expenses, but the underwriter of freight (without abandonment), ready to pay his own share, can not be compelled to collect of others. The vessel-owner had it in his power, and as a duty, to exact from each interest saved its due proportion of the salvage or general average expenses. ■ He was not at liberty to inflict the whole upon one (and that the least) of these interests, (c.) The recommendation of a known person, to advise with, was unimportant. It was made in good faith, and, in fact, after the principal events had occurred, and did not purport to take away either power or responsibility from the ship-owner or agent; nor did he concede any such power or pursue the recommendation. The telegram to take “bond and at least fifty per cent, cash deposit,” could not be construed into an authority to deliver the cargo upon a bond taken by another person and with no cash deposit.
    III. The verdict directed by the court was quite as favorable to the plaintiffs as the proofs would justify, and, not being excepted to by the defendants, it should stand.
   By the Court.—Curtis, J.

The contract on the ■part of the underwriters, was that the ship should not he prevented by the perils of the sea from earning freight money for the owners. - The ship was hopelessly stranded three or four miles from the port of delivery, :a port then infected with yellow fever. The expense ■of delivering the portion of the cargo rescued amounted to more than the freight upon it. The master was lost at the time of the wreck. The owners, on receiving notice, applied to the insurers, and were told that on account of the yellow fever it would be impossible to get an agent to go down there, that they had better telegraph to Mr. Stackpole, the consignee of the cargo, to find out the condition of the vessel, and to advise with Mr. Hunt, the underwriters, or their agent at ■Galveston, and to take at least a fifty per cent, average bond. This was done, and Mr. Hunt directed the vessel to be turned over to him as the agent of the underwriters. The vessel was, as the witness Stack-pole testifies, abandoned to him as such agent, and it appears that all the subsequent steps in respect to saving cargo, and delivering and selling same, and collecting the freight upon the portions delivered, were ■performed by him, or by his direction, acting in such ■capacity.

It is claimed by the defendant, that what was thus said on the part of the defendant was unimportant, and did not purport to take away power or responsibility from the ship owner or agent, and that it was merely the recommendation of a known person to advise with. In passing upon this, the peculiar character of the emergency has to be considered. There was no master surviving whose duty it was to have acted for, and advised the parties interested. Ho agent could be sent there in consequence of the prevailing infection, and when the insurers, under such circumstances, referred the owners to their a;:erU to advise with, it can hardly be deemed that snch a recommendation is unimportant when acted upon as was done in this case, and resulting in the transfer of property and money to their agent, and for their benefit.

It is true, the recommendation does not, upon its face, purport to take away power or responsibility from the shipowners, but the construction of it is to be measured by the interpretation, the parties to the suit, the underwriters, and the owners put upon it, and how far they respectively acted upon it and were benefited by it, and to what extent it was adopted and ratified at the time and in the emergency, rather than by what technically was expressed by it.

The defendants, when applied to by the plaintiffs, could have remained silent, they were under no obligation to point out any course to be pursued, but when they chose to tell them to advise with their agent, it is reasonable to suppose that they intended that the plaintiffs should take his advice. When the plaintiffs, acting upon that advice turned over the whole case to the defendants’ agent, and the defendants thereupon, through their agent, accepted the cargo, and collected the proceeds of that sold, and received to their account the freight on that delivered, it would seem that unless there was some good reason to the contrary, that they should pay the plaintiffs the insurance.

The defendants urge that as to the freight that was. earned and paid, the contract of the insurers, that the-ship should not be prevented by the perils pf the sea, from earning freight money for the owners, has been performed. In the case of Scottish Marine Ins. Co. v. Turner (4 H. of L. Cas. 312, reported 20 L. & Eq. 24), the owners, after delivering from a damaged ship the cargo (timber) at the port of destination, and collecting, the freight, abandoned the vessel to the insurers, and paid to them the freight. On appeal, the judgment of the Scottish court of sessions was reversed, and it was held that the freight having been earned and received by the owners, the contract of the insurers on freight was performed. The ground upon which the appellate court places this decision is that, the voyage was performed, and the freight money insured actually earned and received by the owners, and that but for their act after such earning and receipt, they might have retained it for their owners, and that the loss of freight, if any, was occasioned by the act of the plaintiffs themselves.

It will be perceived that the present case differs from this, in the important features, that the voyage was never completed, and that the freight was never actually collected or received by the owners, but on the contrary, was collected and received by the insurers through their agent. If these facts had appeared in the case referred to, it would seem from the opinion of the chancellor (Lord Craneworth), and also that of Lord Truro, that they would have held the insurers liable.

I am led to the conclusion, that the perils of the sea insured against, prevented the vessel from earning freight for her owners, and that the receiving and taking possession of a part of the cargo and delivering it, and collecting the freight by the insurers through their agent, can in no way prejudice the right of the owners to recover for their' loss. The courts seek to apply the most liberal construction to contracts of marine insurance. All narrow technicalities are sought to be avoided as various nationalities and languages are frequently invoked in their construction, and it would ill accord with such a policy to hold that the uncontradicted statement on the part of the defendant to the plaintiffs, after the loss of the vessel, and their subsequent action through their agent, wás unimportant and irrelevant. It is difficult not to see, that it led to the transfer of property and moneys to their benefit, by the plaintiffs relying upon it. The plaintiffs having acted in good faith, should not be prejudiced by the steps they took in consequence of it.

There are no cases that fully sustain the ground taken by the defendants. The case cited of Ogden v. General Mutual Ins. Co. (2 Duer, 204), differs from this, because the vessel was not lost, and the freight was insured, with the provision that the company “ should not be liable for any partial loss whatever.’’

The evidence shows that there was a total loss of the freight, as far as the owners were concerned, and under the circumstances disclosed, there should have been a verdict directed for the plaintiff for the amount of the insurance, with interest, instead of for the lesser sum for which a verdict was directed.

The exception of the plaintiff to the direction of the verdict for this lesser sum by the court should be sustained, and the verdict set aside, and a new trial ordered, with costs to plaintiffs, to abide the event.

Spier, J., concurred.

Monell, Ch. J.

(concurring).—I concur in sustaining the exceptions in this case, as, under the facts, it was error to limit the recovery to the difference between the amount insured and the sum received for freight.

Immediately upon the happening of the disaster, the insurers were notified; and what took place on that occasion, and subsequently, amounted to an abandonment of the freight money to the underwriters, and was, therefore, a constructive total loss (2 Arnould, 1136, § 396).

The relation of agent for the defendant by Hunt, and, indeed, pro hac vice, by Stackpole & Co., was prima facie, sufficiently established by the evidence ; and assuming, therefore, as the court should have assumed, that all they did in respect to the ship- and cargo was done under the abandonment and for the benefit of the underwriters, the plaintiffs were entitled to recover as for a total loss.

It is a general rule, that if freight, though ulti mately earned after a valid notice of abandonment, is yet earned under such circumstances that it is of no benefit to the owner, because of the expense of earning it exceeding its loss, this will not divest his right to recover as for a total loss (2 Arnould, 1139 ; Benson v. Chapman, 6 Mann & Gr. 792; Willard v. Millers Manuf. Ins. Co. 24 Mo. 561).

That would be this case if the assured had actually received the subsequently-earned freight money; for it appears that the expense of rescuing the portion of the cargo which earned the freight was much greater than the freight received. And in that case, under the rule stated, the assured could recover as for a total loss.

But I think that if the proof of abandonment was sufficient—and it was, as I have said, prima facie— then whatever was done towards or in rescuing the cargo and earning the freight was for the benefit of the underwriters. For the effect, of abandonment is to transfer to the insurers the whole interest of the assured in the subject insured, In this case it transferred the freight money, and any amount that -was afterwards derived from that source was salvage to the underwriters.

As practically nothing was received—the whole amount having been absorbed by the expenses—no deduction, under either aspect, should have been allowed.  