Grummond v. The Burlington

SWAN, District Judge

(after stating the facts). The concession that the services render by libelant in this cause were meritorious, and resulted in the salvage of the property, is not necessary to the ascertainment of that fact. They have all the elements necessary to constitute a valid salvage claim, namely: (1) A marine peril to the property to be rescued; (2) voluntary service, not owed to the property as matter of duty; (3) success in saving the property, or some portion of it, from the impending peril. The Clarita and The Clara, 23 Wall. 16. The fund in. court arising from the sale of the wreck is the product of the libelant’s labor and energy and the expenditure oí his means. Upon the admitted facts of the case, it is clear that whatever value the property had when sold was given to it by Ms efforts. In the condition in which the wreck was left, although it was not physically all destroyed, it was as much a total loss as if the lire had wholly consumed it, as demonstrated by the cost of the work actually performed in raising and removing it to a place of safety. It is not contended that this work could be done for less than the amount fixed by the testimony of the libelant as its value, and no evidence was offered in contradiction of the libelant’s valuation, and we must assume its correctness. The undisputed evidence as to the condition of the steamer when the work was undertaken and prosecuted is strongly corroborative of the libelant’s estimate.

It is urged by the claimant that, as there was no formal abandonment of the Burlington to tlie insurers, the title of the property still remains in the claimant. It appears, however, that'the loss was paid in full by the insurers, and that, upon the trial of the suit brought by Jackson against thn underwriters, the plaintiff insisted that, because of the totality of the loss, no abandonment to the insurers was necessary to entitle him to recover. The court sustained that contention, and its judgment was affirmed by the supreme court, where the case was taken on writ of error. Jackson having received payment on the basis of a total loss, such payment operated to transfer to the insurers the salvage of the property injured, without the necessity of a formal abandonment in writing. “Abandonment is implied as accompanying every settlement of a claim for total loss. It is unnecessary to stipulate for it. It passes without a word spoken, for it is a necessary incident of every contract, not only of insurance, but of indemnity. This abandonment takes place at the time of the settlement of the claim; it need not take place before.” Lown. Ins. p. 152.

This doctrine is held by the supreme court of the United States in the ease of Phœnix Ins. Co. v. Erie & W. Transp. Co., 117 U. S. 320, 6 Sup. Ct. 750, 1176, where it is said:

“When goods insured are totally lost, actually or constructively, by perils insured against, the insurer, upon payment of the loss, doubtless becomes subrogated to all the assured’s rights of action against third persons who have caused or are responsible for the lose. No express stipulation in the policy of insurance or abandonment by the assured is necessary to perfect the title of the insurer. From the very nature of the contract of insurance as a contract of indemnity, the insurer, when he has paid to the assured the amount of the indemnity agreed oil between them, is entitled, by way of salvage, to the benefit of anything that may be received, either from remnants of the goods or other damages paid by third persons for the same loss.”

This doctrine is clearly applicable to claims in marine policies. The Manitoba, 30 Fed. 129. See, also, Wood, Ins. § 485; Rankin v. Potter, L. R. 6 H. L. 118; Kaltenbach v. Mackenzie, 3 C. P. Div. 471. Hall v. Railroad Co., 13 Wall. 367, is to the same effect, and holds that “there can be no abandonment where there has been total destruction. There is nothing upon which it can operate, and an insured party may recover for a total loss without it.”

It is 'laid down in Phillips on Insurance (section 1523) that “a mere payment of a loss, whether partial or total, gives the insurers an equitable title to what may be afterwards recovered from other parties on account of1 the loss”; and that “the effect of the payment of a loss is equivalent in this respect to that of abandonment.”

In Railway Co. v. Jurey, 111 U. S. 584, 594, 4 Sup. Ct. 566, it is said :

“The payment of a total loss hy the insurer works an equitable assignment to him of the property and all the remedies which the insured had against the carrier for the recovery of its value. It is immaterial whether the policy sued upon insured against fire or marine peril.”

The contract being one of indemnity, it is clear, under the authorities, that its utmost requirement is satisfied when the insurer is paid for a total loss; and it is but equitable that, having thus indemnified the assured, the insurer should be entitled to the remnants of the property saved, if any.

■ The stress of the defense is laid upon the proposition that the Burlington was not, when libelant performed the work, the proper subject of salvage service. It is clear, however, that under the doctrine stated in the case of The Clara, supra, the condition and location of the property, and the dangers to which it was exposed, brought it within those circumstances which justified the effort to rescue it. It had lain uncared for, for nearly nine months, in navigable waters, in .such proximity to the main channel, and so liable to be carried by ice into the pathway of vessels, that, under the authority conferred by the law of Canada for the removal of wrecks and obstructions in navigation, it was deemed important, in the interest of commerce, to remove it as an obstruction. It is not within the power of this court to review the action of the Canadian government or that of any of its departments upon matters within their jurisdiction. The Canadian statute, in effect, made the department of marine and fisheries a special tribunal to decide whether or not the wreck was an obstruction to navigation, and, if it should hold affirmatively on this point, to authorize its removal or destruction, in the interest of commerce. This determination must be held conclusive of the necessity of removing the property, and, upon elementary principles, would shield any persons authorized or employed by that department to perform the work. Many analogous grants of authority exist in our own legislation whereby special tribunals are created, whose determinations are not reviewable by the courts. The authority of such officials has been passed upon in numerous cases. Johnson v. Towsley, 13 Wall. 72; Steel v. Refining Co., 106 U. S. 451, 1 Sup. Ct. 3S9; Baldwin v. Stark, 107 U. S. 468, 2 Sup. Ct. 473. Other and later instances of the grant of like powers, and the finality of the judgments of officers acting under them, are found in laws of the United States, excluding undesirable immigrants, and prohibiting the entry of Chinese persons into this country and in legislation of the states for the protection of fisheries and other interests. Nishimura Ekin v. U. S., 142 U. S. 651, 12 Sup. Ct. 336; Lawton v. Steele, 152 U. S. 133, 14 Sup. Ct. 499.

By the law of Canada, the property in the soil adjacent to the shore is in the crown, subject to the public right of navigation, ba thing, and fishing. Attorney General v. Perry, 15 U. C. C. P. 329. An act of congress very similar in its provisions to the Canadian statutes in question is found in 1 Supp. Rev. St. pp. 296, 369. By section 4 of that act (of June 14, 1880, p. 296), it is made the duty of the secretary of war, whenever the navigation of navigable waters is obstructed or injiired by any sunken vessel or water craft, to notify persons interested therein, or in the cargo thereof, To remove the same; and, in case of their default, it is the secretary’s duty to cause the same to be removed. The provisions of this statute and the amendment of August 2, 1882 (page 369), give the secretary of war the discretion to sell and dispose of sunken vessels or property in navigable waters before or after the raising or removal thereof, and the acts make appropriations for the purpose of removing such obstructions. Section 8 of the act of congress approved September 19, 1890 (26 Stat. 454), also empowers the removal of wrecked vessels and other obstructions,in navigable waters after a specified time, and makes it the duty of the secretary of war to cause them to be removed or broken up “without any liability for damage to the owners of the same.” The effect of the action authorized by the Canadian department of marine and fisheries was to divest the former owner of the title to the wreck, and vest the same in the grantee of the crown. Story, Confl. Laws, § 390; Whart. Confl. Laws, §§ 297, 307, 308; The Trenton, 4 Fed. 657; Green v. Van Buskirk, 5 Wall. 307. But, even if this were not true, the determination that the situation of the wreck authorized its removal, and made it fairly subject to salvage service, demonstrates that 1 lie boat and her cargo had lain so long unclaimed and imcared for as to justify the belief, both of the officials and of the public, that the property was derelict. The facts of the case are much stronger in favor of libelant’s claim for salvage compensation than those which were the subject of decision in the case of Murphy v. Dunham, 38 Fed. 503, in which it was held that a vessel That had been sunk in Lake Michigan, and who.se location had remained for some time undiscovered, was the subject of salvage service, and that one who removed her cargo was entitled to reimbursement for his services and outlay in recovering it, although he had abandoned the vessel to the insurers, and was notified by their grantee that he had begun preparations for its recovery. Libelant’s conduct in the prosecution of this work was open, and tree from concealment, and the facts that the value of the property was but a fraction of the cost of its recovery, and that: libelant entered upon the undertaking under a. misconception of its difficulties, and in ignorance of the changes which the elements had wrought in the condition of the vessel, disprove any color of wrong motive in his prosecution of the work. The action of the department of marine and fisheries was an assurance to libelant of the lawfulness of his undertaking, and repels the contention that he was a wrongdoer in disregarding Jackson’s request to desist from further prosecution of the work, especially as this request was not made until after libelant had begun operations for the recovery of the boat and cargo.

There is no evidence that Jackson had or expressed any intention to recover the property. It is sufficient to establish its character as derelict that its long abandonment exposed it to further injury, and in all probability would cause it to become, from natural causes, a more serious obstruction to navigation, and a source of danger and injury to vessels navigating in that vicinity. It is well settled that a mere intention on the part of owners of a wrecked vessel to ultimately rescue her cannot prevent others from becoming salvors of the property, or take from it the character of derelict. The reports abound in instances of the application of this doctrine where, under circumstances much less suggestive of the intent of the owner to abandon the property, salvage has been awarded to those who have voluntarily recovered it. The Union Express, 1 Brown, Adm. 516, Fed. Cas. No. 14,363; The Senator, 1 Brown, Adm. 372, Fed. Cas. No. 12,664; The Silver Spray, 1 Brown, Adm. 349, Fed. Cas. No. 12,857; The Ann L. Lockwood, 37 Fed. 233; The Cairnsmore, 20 Fed. 519; The Island City, 1 Black, 128; The Laura, 14 Wall. 336; The Coromandel, 1 Swab. 208; The Hyderabad, 11 Fed. 749; The John Gilpin, Olc. 77, Fed. Cas. No. 7,345; Wyman v. Hurlburt, 12 Ohio, 81.

There is no fixed rule for the compensation of salvors. The amount of the reward depends upon the circumstances of each case. The difficulties which surrounded the undertaking, the value of the property rescued, the imminence of the peril which threatened it, the danger to life and property in effecting the rescue, the value of the property hazarded in the work by the salvors, and other circumstances, are all factors in fixing the amount of the reward. Where no claimant appears, and the property is of small value, it is not unusual to award all that is saved to the salvors. Llewellyn v. Two Anchors & Chains, 1 Ben. 80, Fed. Cas. No. 8,428; The Zealand, 1 Lowell, 1, Fed. Cas. No. 18,205. The amount awarded in such cases is not merely compensation pro opere et labore, but is proportioned to the merit of the service, having in mind all the elements and considerations which attend its rendition. It is the aim of the courts to stimulate, by liberal rewards, efforts to rescue property from maritime perils. While the mere fact that the undertalcing was beset with more difficulties than the salvors contemplated in entering upon it is not per se sufficient to entitle them to the whole of the property, yet where it clearly appears that the value of their work and expenditures largely exceeded that of the property recovered, and it is clear that it could not háve been rescued without the outlay of a' sum exceeding its value, it is only equitable that the entire proceeds of the property realized on a fair sale should be awarded to the salvors. As already remarked, the enterprise, labors, and expenditures of the libelant have given the property here in controversy all its value. Xo one else has hazarded anything in its rescue. The proof is uncontradicted that the libelant will not receive more than about one-fifth of the value of the work done and the expenses of its performance. To take from him any part of the proceeds of the property under such circumstances, and bestow it upon one whose title was divested by competent authority, because of his inaction, would be simply to increase libelant’s loss, and to revest the title of the property in one who has no legal or equitable ownership therein.

It was argued that, if the libelant should be held to be a salvor, the proceeds of the property could not be awarded to him solely, but a part should be decreed to the persons who obtained the services of the fireboat Detroiter, which checked the progress of the flames, and prevented a further loss by fire of the vessel and cargo. The facts do not warrant any allowance for the services of the fire-boat as against the claim of the libelant. Had the fund been sufficient to pay the libelant’s actual expenditures and the fair value of his work, and leave surplus for distribution, the Detroiter might be permitted to share in it, if not barred by her contract of service. But the steamer was not equipped to perform the services rendered hv libelant, and bring the vessel and cargo into port. All that she did was practically lost by the submergence of the vessel, and conferred no appreciable benefit upon the salvors. The proofs fail to show that any considerable portion of the cargo in the hold was benefited by the extinguishment of the fire on deck, while it is clear that the hull of the Burlington had been so injured before the arrival of the fireboat as to make it practically worthless above the water line.

A further and insuperable objection to any allowance out of the fund by way of salvage to the Detroiter is the fact that her work was done under a contract that her services were to be paid for at all events, whether successful or unsuccessful. The Camanche, 3 Wall. 448, 477; The Excelsior, 123 U. S. 40, 49, 8 Sup. Ct. 33.

The libelant was the last salvor, and is entitled to priority, under the circumstances of the case, over all others. His services, including his necessary disbursements, were fairly worth the sum of §5,000, and a decree will be entered in his favor for that sum, with costs. The fund in the registry of the court arising from the sale of the Burlington and cargo is awarded to the libelant.