Progresso Steamship Co. v. St. Paul Fire & Marine Insurance

SMITH, C.

This is an appeal from a judgment for the plaintiff and from an order denying defendant a new trial. The suit was brought on two policies of insurance issued by defendant to the agents of the Yukon Transportation and Commercial Company, and made payable to plaintiff at San Francisco, insuring, in the sum of twenty-five hundred dollars each, two river steamboats, known as the Staghound and the

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Gamecock, about to be towed from Portland, Oregon, to St. Michael, Alaska. The interest of plaintiff was that of mortgagee. Each policy besides the words of insurance contained the memorandum: “Warranted free from all average and salvage:” The two steamboats when out about thirty-six hours from Astoria met with such damage from the seas that the towing steamer was compelled to return with them in a badly damaged condition to Astoria. Shortly after their return the assured gave notice of abandonment to the defendant, which declined to accept it on the specific grounds that the damage was partial] and.that its insurance was “warranted free of all average,” and against “absolute total loss only.” Of the two steamers the Staghound was most injured. The subsequent history of the steamboats does not seem to be material to the case, but as some stress is laid upon it by the appellant it may be as well to state: That the two steamboats were libeled in the admiralty court for breach of contract of transportation and personal services and ultimately sold by the marshal with their equipments—the Gamecock for $5,596, and the Staghound for $4,497; that the Gamecock was made into a towboat at an expense of $4,000, and put to use as such on the river; and that the Staghound was broken up and her machinery removed into the hull of a new tugboat, and her hull converted into two barges.

One of the questions mainly discussed in the brief relates to the construction of the memorandum clause of the policy “warranted free from all average and salvage”; as to which it is claimed by the appellant that this limits the right of recovery to the case of “actual total loss” only, and excludes “the right to abandon” for “constructive total loss.” In discussing this question it is rightly assumed by the counsel that as the contract provides for performance in San Francisco, the California law must govern. This will be found in sections 2704 and 2717 of the Civil Code—the former defining “actual,” and the latter “'constructive,” total loss. But it seems- that on this question the court below accepted the theory of the appellant, and fopnd in effect that there was an actual total loss of the vessel as defined in subdivisions 3 and 4 of section 2704 of the Civil Code; and if this finding be supported by the evidence, tile question discussed becomes immaterial. The question, therefore, to be considered is as