THE SINKING OF THE
R.M.S. LUSITANIA AND INSURANCE, Part I

Michael Sean Quinn, Ph.D.,
J.D., c.p.c.u. . . .

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

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May 7, 2015 will be the 100th birthday of the sinking of the
cruise liner The Lusitania.  It was one
hell of a big boat, and it was a good deal more elegant both on its inside and
outside than are the many storied cruise boats of our current age.

The ship was on a voyage from New York to Liverpool.  The ship sailed more or less directly NE; when
it got a little past Ireland, it was to turn left; get to the ocean near
Liverpool, and turn right.  The ship was
not zigging and not zagging.  The sinking
happened 12 or so miles off the southern, coast of Ireland, more or less.  There were a large number of fatal casualties,
of which 125+ were Americans. The ship sank approximately 300± feet of water,
where it has resided for the last century.  

It was torpedoed by a German U-Boat, as the result of a change in
German maritime war policy. The one torpedo coming from the U-Boat may have
triggered a second explosion, and especially as a result of that second
explosion, the ship sank very quickly—18± minutes or so. (The second explosion happened,
no doubt; the only question about it is what caused it.)

There is a substantial literature on the disaster—a few books, some
articles, many newspaper stories, and now bunches of stuff on the Internet. As
one might expect some of the literature is excellent; some is respectable; some
is ok; while some is shit, especially the ones deploying the rhetoric of
conspiracy theories and nothing or not much else. Like respectable evidence,
for example. (Here’s an example: Did Winston Churchill arrange the sinking of
the boat—him and his Mason and Jewish buddies?)
 Just as one would expect, the
literature is creeping up, now that the 100th birthday is
approaching. Erik Larson’s DEAD WAKE: THE LAST CROSSING OF THE LUSITANIA   (Crown Publishers, 2015) has been well
reviewed by both NYT, Book Review, Sunday March 8 and WSJ on the previous day. Ir has been a best-seller for several weeks, and had the #1 spot in Sunday NYTs at least twice. A second book was also published recently, though not with the same “buzz”; for example it was not reviewed in the Sunday NYT, and it has not been a best seller. Greg King and Penny Wilson, LUSITANIA; TRIUMPH, TRAGEDY AND THE END OF THE EDWARDIAN AGE (2015). Neither book has anything significant to say about insurance and the King-Wilson book says nothing at all on the subject

One of the most interesting speculations was that the ship was carrying
a good deal of ammunition for the British. That mystery was resolved some years
ago—it was carrying a lot of it–and I will tell a bit of that part of the
story later. A related speculation has been what did the Germans know about
this and when did they come to know it. Finally, there is the more legalistic
controversy about the international law of Germany’s justification for doing
what it did, given what the British were doing about Atlantic shipping. (That speculation
is purely abstract and hyper-academic, since Germany threw in—or what forced to
throw in–the towel on this matter by the Treaty of Versailles.

There has not been a good deal of discussion of insurance—indeed,
hardly any. For example, the ship itself, worth more than 10M, this entity, and I have not been able to locate its
war risk insurance policy (or policies) issued by the Liverpool and London War Risk Insurance Association. Not much is known now about what was known at  that time, nor have I found the actual policy covering
the Lusitania. Nor has much of anyone else;  in fact, one court observed that it was not
provided with a copy of the policy. (Or, maybe it would be better to say that
the court expressed surprise at not receiving it.)
I cannot even find “knock offs” of the policy on any of the many
historical antique auction houses findable on the Net. In contrast, there is at
least one good fragment of an insurance story to be found on the Internet, and
I will share it, as we go along.

I intend to tell the story in short little essays.  Given the character of the tale, I don’t
think there are many who would want it read it all at once. And I will be
telling a couple of stories related to insurance that are not really insurance
or not really an insurance matter closely related to this stunning beautiful
ship.

There is an amount of material available on amounts paid to survivors
and to the relatives of those killed that have inheritance rights.  There is also a good story—although the
evidence is thin—regarding some things one of the passengers had in his
possession that was most assuredly insured, but with respect to which there is
almost no available discussion.

This introductory blog, is now long enough, so I will not tell even one
of the insurance stories.  I will start
in  Part II. It’s a simple case in which
coverage is sought under a life insurance policy. It may say more about the
times than it does about the role of insurance in the “small picture” of the
disaster, and it certainly reveals something about the changing bases of legal
argument in American courts.

The contract of insurance in question was a life insurance  policy on Alfred G. Vanderbilt who was drowned
as a result of the sinking of the ship. I will discuss the case first, and then
say a couple of words about the insured.




Part II will concern the litigation regarding whether the ship owner or some of its employees were negligent and if so whether they caused the disaster. Part II concern an action in the Wreck Commission in Great Britain. Part III is an American version of some of the same issues. Both parts II and III are to be found both in the series of blogs Quinn’s Commentaries on Insurance Law and in the blog Quinn’s Commentaries on Lawyers and Lawyering. 


Part IV concerns two life insurance cases. One of them, Part IV.A, arose out of the Lusitania disaster. Part IV.B arose out of the Pearl Harbor attack. the cases are related.


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It might be worth mentioning in passing that Canard was no stranger when it came to litigation.  In 1909 the Municipal Court of the City of New York, Borough of Manhattan, First District, the court issued an opinion involving the Lusitania, vaguely. It seems that Cyrille Eggermont was booked as a passenger on the Lusitania. Cunard, however, lost his luggage, refused to let him board–(one wonders why)–but booked him on another line, and arrangement Cyrille accepted.  Cyrille sued Canard anyway, even though there was a $25.00 limit on lost bag damages. 


Cyrille lost, but not until after the court made a good deal of fun of his counsel, Cornelius O’Connor. Here is some of what it said: 


“The learned counsel for the plaintiff, in a brief which is verily a literary production, ingeniously, and yet by the invocation of what are undoubtedly elementary principles of law, argues that plaintiff is not bound by the contract of carriage by him entered into with the defendant, that the defendant may not urge the limited liability therein fixed, and the plaintiff is entitled to the full value of the lost trunk. He contends that, when when the defendant refused the plaintiff passage on the Lusitania, it committed a breach of contract, that the plaintiff then had a right to rescind the contract and hold the defendant as bailee, under the common law, for the full value of the trunk and its contents; and that the defendant may not urge the contract which is breached as establishing the limited liability.”


The trouble is, said the judge, that though the principles are unassailable, they do not fit the facts. If Cyrille was going to rescind the contract he had to actually do so.  He could not accept a voyage on a different ship, provided as the defendant’s expense, and then rescind.  


And the court continued: “In eloquent language counsel pictures the hardship which plaintiff, a man of small means, must suffer by limiting the recovery to $25. To this argument can be made only the now trite answer, that there was the contract of the parties, that it is the duty of courts to determine the rights of the parties under the contracts of the parties; that is the duty of the courts to determine the rights of the parties under the contracts which they make, not to make new contracts for them, and to declare the law as they fine it, not to change or strain the law to make it fit a particular hard case.”


Sound familiar? Certainly because of the case itself.  According to WestLawNext, no other case has ever cited it for anything.



Maybe but there is a piece of this case which is not so clear. Cyrille is awarded his $25.00, but from it is deducted $15.00, “the amount of the defendant’s counterclaim.” The counterclaim is $15.00 in costs recovered by Cunard against the plaintiff in a previous action. What’s going on there? Was there some secret reason why Cunard wouldn’t let him on the Lusitania? Hummm.


A post-script (May 11, 20200; I recently saw figures that many more gentlemen from third and second class class perished than did men in first class. 

                                                                             

Originally posted on 03/11/2015 @ 3:15 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

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