Columbus-America Disc. Grp. v. At. Mut. Ins. Co.

Brief Fact Summary.

The United States Court of Appeals for the Fourth District ruled that when a ship is damaged and lost at sea, and someone who does not own the property recovers the property, the law of salvages will apply unless it is clear that the property and the ship were abandoned. 

Synopsis of Rule of Law.

When a ship is damaged and lost at sea, and someone who does not own the property recovers the property, the law of salvages will apply unless it is clear that the property and the ship were abandoned. 

Facts.

The Central America a sea vessel sank in 1857. The ship was carrying a large sum of gold that totaled into the millions of dollars. All of the property including the gold on the ship was insured and the policyholders were reimbursed. The insurance underwriters became the owners of the gold lost at sea who never sought out the gold from the wreck. Shortly thereafter, Columbus-America Discovery Group (Defendant) after searching the ocean discovered the wreckage and recovered the gold. The Defendant is not in any way affiliated with the insurance company. The insurance underwriters sought a claim in the gold however a federal district court determined the gold was abandoned and imposes the law of finds. Defendants appeals. 

Issue.

When items are lost as a result of a shipwreck and a party is asserting a right of ownership to the property, should the court apply the law of finds?

Held.

No. The Court determined the law of salvages applies because there is no clear and convincing evidence to prove the property had been abandoned. However, the court did note that the finder will be given a reward for salvaging the property. The Court notes that the law of finds only applies when the property is abandoned which must be shown through clear and convincing evidence. 

Dissent.

Argues that the law of finds should be applied because of the sufficient evidence to prove abandonment. The minority looks at documentation in which the underwriters destroyed. The minority claims if an insurance company has an interest in property they would retain the documentation as supposed to destroying it. 

Discussion.

Abandonment according to the court in regards to a shipwreck may be inferred since a ship is lost and abandoned when it sinks to the bottom of the ocean however, when a person shows up to court he apparently has an interest.