XII. Extent of liability; right to abandon to insurer and recover as for total loss.

a. In general.

Assuming, or having determined, the existence of a liability on the part of the insurer for a loss arising out of a state of war, the further question arises whether the assured may convert the loss into a total one by an offer to abandon to the insurer. This brings in its train a number of subsidiary questions, such as the time within which the offer must be made; the effect of a restitution or recapture, or of a bidding in of the insured property at a sale under a decree of the admiralty court; and the construction of various stipulations of the policy relative to abandonment. These will now be considered.

In Lozano v. Janson (1859) 2 El. & El. 160, 28 L. J. Q. B. N. S. 337, 5 Jur. N. S. 1401, 7 Week. Rep. 654, it was said that it has often been held that if the ultimate consequence of a peril insured against is merely the loss of a voyage or a suspension or retardation of a mercantile adventure, although notice of abandonment has been justifiably given, a total loss cannot be claimed; but that the mere existence of the ship or goods insured after a total loss and abandonment, so that possession of them may possibly be resumed by the owner, will not reduce it to a partial loss.

In accordance with this principle, that the possibility of recovery of the property insured will not prevent a loss from a peril insured against from being a total one, it has frequently been held that capture is so far a total loss as to justify an abandonment. See Queen v. Union Ins. Co. (1808) 2 Wash. C. C. 331, Fed. Cas. No. 11,505; Duval v. Commercial Ins. Co. (1813) 10 Johns. 278; and cases cited throughout this section. Proof that the vessel was captured is sufficient evidence of a total loss, and it is not necessary to show condemnation (Ruan v. Gardner (1804) 1 Wash. C. C. 145, Fed. Cas. No. 12,100); or to make any claim or appeal before calling on the underwriters (Tyson v. Gurney (1789) 3 T. R. 477).

After capture and abandonment the master of the vessel and his agents are the agents of the underwriter, and not of the insured. Lovering v. Mercantile M. Ins. Co. (1832) 12 Pick. 348.

A "sue and labor" clause does not affect right to abandon on capture, and does not impose upon the insured the duty of making a claim or appealing from a decree of condemnation. By abandoning and calling on the insurers the insured yields up to them all his right, title, and interest in the subject insured, and it operates in judgment of law as a transfer of the property, and the captain from that time becomes the agent of the insurers. Gardere v. Columbia Ins. Co. (1811) 7 Johns. 514.

Where a cargo is captured and carried into a port from which it

may not be removed without security being given not to carry it to a port of the opposing belligerent, this is a complete destruction of the original voyage, giving the insured the right to abandon. Hurtin v. Phonix Ins. Co. (1806) 1 Wash. C. C. 400, Fed. Cas. No. 6,941.

But the owner of a vessel cannot abandon her to the insurer because the voyage has been broken up by a seizure of the cargo, the contract being for the ability of the ship to perform the voyage, and not that she shall perform it at all events. Alexander v. Baltimore Ins. Co. (1808) 4 Cranch, 370, 2 L. ed. 650.

In Polurrian S. S. Co. v. Young (1914) 109 L. T. N. S. 901, 30 Times L. R. 126, 12 Asp. Mar. L. Cas. 449, 19 Com. Cas. 143, where a vessel insured against capture and detention was stopped by the naval forces of a belligerent, her cargo of coal confiscated for the use of the belligerent fleet, and the vessel detained for six weeks, it was held that the circumstances did not warrant an abandonment to the insurer, there being neither an actual total loss of the vessel at the time of notice of abandonment, as the owners were not then "irretrievably deprived" of the ship within the meaning of § 57 (1) of the English marine insurance act 1906, nor a constructive total loss within the meaning of § 60 (2) of that act, it not being "unlikely that he can recover the ship." This conclusion was affirmed by the court of appeal in [1915] 1 K. B. 922, 84 L. J. K. B. N. S. 1026, 20 Com. Cas. 152, 111 L. T. N. S. 1053, [1915] W. N. 68, 31 Times L. R. 211, 59 Sol. Jo. 285, where, however, it was said that if the action had come to be decided before the Marine Insurance Act 1906 had come into force, the plaintiffs would have been held to have been entitled to recover upon the policy of insurance as for a constructive total loss. The court said: "According to the law as it stood before the passing of that act, the seizure or arrest or detention of a vessel for that which is either avowedly or obviously a temporary purpose, which will end within a period not, from the commercial standpoint, unreasonably long, as in the case cited by Arnould on Marine Insurance, 9th ed. vol. 11, § 1108, from Emerigon, gives no ground of abandonment. But if the taking of the vessel, lawful or unlawful, out of the possession of the owner was, at the date of the commencement of the owner's action to enforce his notice of abandonment, a taking which still continued in operation, and the owner's loss of the use and disposal of the ship, once total, was at that date one which might be permanent, and was, at any rate, of uncertain continuance, the owner who had duly given notice of abandonment was held by English law entitled to recover upon his insurance for a constructive total loss."

In British & Foreign Marine Ins. Co. v. Sanday (1916) 32 Times L. R. 266, where a cargo en route to Germany prior to the outbreak of war between England and Germany, insured, inter alia, against

restraints of all kings, princes, and people of what nation soever, was, in consequence of the breaking out of the war and the ensuing prohibition of trade with the enemy, diverted to British ports, it was held that there was a constructive total loss entitling the insured to abandon to the underwriters.

In Wilson Bros. B. & Co. v. Green (1915) 31 Times L. R. 605, it was held that under the Marine Insurance Act 1906, the owners of a cargo of timber insured against war risks (excluding all claims arising from delay) on a voyage from a Baltic to an English port, could not abandon and recover as for a constructive total loss, where at the date when the notice of abandonment was given the vessel was lying in a Danish port to which it had proceeded in consequence of having been stopped by a German torpedo boat and forbidden to pass the Sound in consequence of the contraband character of its cargo, but was given permission to go either into a Swedish or Danish port in the Baltic, it appearing that the master of the vessel, finding it dangerous in consequence of stormy weather to remain at his anchorage and seeing no German torpedo boat about, made for the Sound and finally proceeded to a Norwegian port where he discharged his cargo, and that the Norwegian government never placed any obstacle in the way of a reshipment of the cargo for England; the plaintiffs never having been deprived of the possession of the goods so as to bring the case within § 60, subs. 1, and the event showing that at the date of the abandonment it could not be said that the total loss of the venture was unavoidable so as to bring the case within subs. 2.

Where a vessel, with her freight and cargo, insured for a certain voyage, with liberty to proceed to another port should the port of destination be blockaded, is constrained by the blockading force to go to a port other than that designated in the instructions given to the captain, the insured may abandon cargo and freight and recover as for a total loss. Symonds v. Union Ins. Co. (1806) 4 Dall. 417, 1 L. ed. 890, Fed. Cas. No. 13,715.

The impossibility of prosecuting the voyage to the place of destination in consequence of a blockade having been declared, which arose during and in consequence of the prolonged detention of the ship and cargo in a British port, may be considered as a loss of the voyage warranting the assured in abandoning. Barker v. Blakes (1808) 9 East, 283.

If the port to which a vessel is destined be actually blockaded, the insured may abandon as for a total loss, and the acceptance of the goods at another port by the consignee, after the abandonment, under the circumstances of the case and from necessity, is an act done for the benefit of all concerned, and does not relieve the insurer. Schmidt v. United Ins. Co. (1806) 1 Johns. 249, 3 Am. Dec. 319. But where a policy permits a ship to proceed to a neighboring

port in case of being turned off on account of blockade, the owners cannot avail themselves of the policy in order to get their property into port, and having arrived there consider the voyage as broken up and throw the cargo on the underwriters. Ferguson v. Phanix Ins. Co. (1813) 5 Binn. 544.

Where underwriters have insured against capture and restraint of princes, and the captain, learning that if he enters the port of hist destination the vessel will be lost by confiscation, avoids that port, whereby the object of the voyage is defeated, such circumstances do not amount to a peril operating to the total destruction of the thing insured. Hadkinson v. Robinson (1803) 3 Bos. & P. 388, 7 Revised Rep. 786.

And where a vessel engaged in a filibustering expedition is chased away by government ships before she can land her cargo, and, subsequently returning, finds that the port has passed into the hands of the government, so that if she enters it her cargo will be subject to confiscation, and accordingly returns home, the insured cannot abandon the cargo to the underwriters and recover as for constructive total loss, the fear of confiscation, and not the restraint temporarily imposed by the presence of the governments ships, being the cause of the breaking up of the voyage. Smith v. Universal Ins. Co. (1821) 6 Wheat. 176, 5 L. ed. 235.

b. Time for abandonment.

In the case of loss occasioned by other perils, it is a general rule that the assured must offer to abandon within a reasonable time, and may not speculate upon his chances. This is in order that the insurer may not be prejudiced by the delay, and may take immediate steps for the preservation of such of the property insured as may remain in existence. The rule was at first held to apply in the case of loss by capture (see cases infra) ; but has since, in some jurisdictions at least, been relaxed so as to allow of an abandonment at any time while the loss continues total, the situation being different from that of a loss by sea perils.

As above stated, it has sometimes been held, on the one hand, that if in a reasonable time after notice of capture the insured fails to abandon, he loses the privilege of doing so, and cannot recover for a total loss on any abandonment for that cause subsequently made (Maryland Ins. Co. v. Bathurst [1833] 5 Gill & J. 159); on the other hand, that it is not necessary for the assured to elect whether to abandon or not upon receiving intelligence of the capture of his property, but that he may do so at any time while the loss continues total (Bohlen v. Delaware Ins. Co. [1812] 4 Binn. 430; Brown v. Phanix Ins. Co. [1812] 4 Binn. 445).

While the insured may abandon upon learning of capture, it does

not follow that he is bound in all cases to do so immediately after the capture, for it is to the advantage of trade that this right should remain and continue until all prospects of regaining or getting back the property are at an end: "Otherwise it would check and put a stop to all those laudable endeavors which honest and faithful men have been in the constant exercise of in all parts of the world where captures are made, in order to reclaim and obtain a restitution of ships and cargoes; and if the pursuit of those endeavors were to be the means of debarring men of their right of eventually abandoning the property to the insurers, very few, if any, would give themselves any trouble about it afterwards." Mey v. Tunno (1801) 2 Bay, 307.

A hostile detention is not determined by a delivery of the vessel on bail in the course of proceedings against her as prize, although the vessel is ultimately restored. Lovering v. Mercantile M. Ins. Co. (1832) 12 Pick. 348.

An abandonment is not made in due time where notice thereof is not given until more than five weeks after a blockade of the port of destination has been publicly notified, although it was not known to the agents of the assured that the vessel and cargo, which had been detained by the British, had been ordered restored. Barker v. Blakes (1808) 9 East, 283.

Although the right to abandon continues during detention, it must be seasonably exercised, and, if not so exercised, will be deemed to have been waived. Livermore v. Newburyport M. Ins. Co. (1804) 1 Mass. 264.

Where the insured received information on October 17th, of the capture by the English of his vessel while on a voyage to France, and on the 16th of November intelligence was received of a peace concluded between Great Britain and France, and the insured first offered to abandon on the 20th of November, the delay of the insured in point of time was unreasonable and a waiver of his right; and the change of circumstances intervening after his knowledge of the event which entitled him to abandon, and before his undertaking to exercise that right, gave the insurer a just right to reject the abandonment. Ibid.

A delay of nearly two and one-half months is held in Savage v. Pleasants (1813) 5 Binn. 403, 6 Am. Dec. 424, to be fatal to a right to abandon and recover as for a total loss in consequence of the breaking up of the voyage insured, where the goods covered by the policy remained safe.

But an abandonment by the insured six months after receiving information of the seizure and detention of his vessel for a cause which he knew did not exist has been held to have been made within a reasonable time, where, after learning of the condemnation of the