The sailing ship Blairmore was sitting in San Francisco Bay on 9 April 1896. A sudden squall hit. The ship went under the water. For that moment, to everyone watching, she was gone. The owners had time insurance for £15,000 running from 2 April to 3 June 1896. They quickly sent a notice of abandonment to the underwriters on 15 April 1896. That notice said, in simple terms, “We give up the ship as a constructive total loss; please pay.” The insurers did not accept the notice. Their policies also had a clear line saying that any act to save or protect the ship would not count as accepting abandonment. That line mattered later.
The owners did not file a lawsuit right away. While they waited, the insurers acted. They hired people, spent a lot of money—about £7,600 to £8,000 was said—and raised the Blairmore from the bottom. They brought her into San Francisco harbor. She was not ready for sea, but she was safe and could be repaired. The owners said that to raise and repair her would cost around £15,000, and even after all that work she would be worth only about £9,600. The insurers said, in effect, “We have put her in a place of safety before you sued us. We did so lawfully. That changes what you can claim.” On 1 December 1896, the owners finally started a court action in Scotland against one underwriter (who had taken £100 of the risk) as a test case for all.
The key legal question was very focused and easy to state. When do we decide whether a loss is “total” or only “partial”? Do we look at the date when the owners gave notice of abandonment (15 April 1896), when the ship was still at the bottom? Or do we look at the date when the lawsuit began (1 December 1896), after the insurers had raised the ship and brought her to safety? English marine insurance law had a settled rule: look to the state of things at the date of the action, not the date of abandonment. Scottish courts had once suggested otherwise in a very old case, but that older view was never confirmed by the House of Lords and had stood alone. In this case, the Scottish court chose to follow the English rule, so the timing point was settled against the owners.
There was also a practical point. Could insurers lawfully step in after a notice of abandonment, raise the ship at their own expense, and then say the loss is no longer total? The court said yes. The policy’s express clause meant that saving the ship did not equal accepting abandonment. The insurers did not have to argue with the owners about the cost of their salvage efforts, and they did not have to charge that cost as “salvage” against the hull in a way that would make the figures look worse for the owners. From a fairness view, the court explained that marine insurance—even with a “valued policy”—is still about indemnity. The owner should be put right for the loss actually suffered, not more. If by the time the case starts the ship can be repaired for less than her actual value when repaired, the loss is partial, not total. Calling it “total” when the ship is back and fixable would make the policy a bet, and the law does not allow that.
So what happened in the courtroom on 4 June 1897? The Inner House (Second Division) of the Court of Session agreed with the trial judge (Lord Kyllachy). Lords Trayner, Young, and Moncreiff all concurred. They held that under a valued time policy the court must decide “total or partial loss” by the facts as they stand at the date of the action, not the date of abandonment. They also confirmed that acts of saving the ship by the insurers—like raising a sunken vessel—do not count as accepting abandonment when the policy says so. Because the Blairmore had been raised and lay safely in harbor before the suit began, and because the owners did not state that repairs would cost more than the ship would actually be worth when repaired, a claim for a constructive total loss could not stand. The court dismissed the action for total loss and awarded expenses to the defender. The owners were not left empty-handed forever; the judges noted they could bring another action for a partial loss if needed. In short, the final result was clear: no total loss recovery on these facts, decision affirmed, and the English timing rule now governs in Scotland for this point.
